8 aspects of good practice in support for WISEs

European Social Fund1

    Eight aspects of good practice in

support for WISEs Lessons from EQUAL

Toby Johnson, AEIDL/DIESIS, Brussels

toby.johnson@poptel.org

European Social Fund2

Outline

1. What are WISEs?

2. EQUAL and WISEs

3.Eight aspects of good practice

4. Recommendations

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1. What are WISEs?

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WorkIntegrationSocialEnterprises

= ‘social firms’

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Terminology

Social economy

WISEs

Social enterprises

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Social economy

economic activity for a social goal 4 families:

co-operatives mutuals associations foundations

11 million jobs in EU-25 8% of jobs

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Social economy employment

CountryCo-ops’000s

Mutuals‘000

Associa-tions‘000

Total FTE‘000

% FTE

AT 52 7 174 234 8.1%

BE 33 11 162 206 7.1%

DK 78 - 211 289 13.8%

FI 76 - 63 139 8.2%

FR 294 91 830 1,215 6.8%

DE 448 131 1,282 1 861 6.5%

EL 12 1 56 69 3.5%

IR 32 1 119 152 15.9%

IT 480 - 667 1,147 8.2%

LU 2 - 5 7 4.6%

NL 109 - 660 769 16.6%

PT 49 1 61 111 3.5%

ES 403 1 474 878 10.0%

SE 91 7 83 181 5.8%

UK 128 22 1,473 1,623 8.4%

TOTAL 2,286 274 6,319 8,880 7.9%

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Concepts of social enterpriseOECD, 1999

different legal forms in different countriesentrepreneurial spiritboth social and economic goals, e.g.:

training & integration of disadvantaged people revitalisation of deprived areas provision of new products & services innovative solutions to unemployment & exclusion

UK – Social Enterprise Unit, 2002 competitive business primary social objective [but only 1 CIC refused!] surpluses principally reinvested in business or community no criteria of ownership or participation

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Concepts of social enterpriseFrance – AVISE, 2004

social values & objectives, as regards: employees (work integration) users/clients (disadvantaged, poor ...) products & services (fair trade) legal status (co-op, association, social co-op)

Finland – Ministry of Labour, 2004on official register>30% employees disabled / unemployed no non-profit criterion no criteria of ownership or participation

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Concepts of social enterpriseItaly – 2005

non-profit

private organisation

mainly perform a stable economic activity in prodiction, exchange of goods or social benefit services

aimed at solving issues of general interest

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Social enterprise characteristics

hybrid of co-operative/mutual and voluntary/associative sectors multi-stakeholder: users, workers, volunteers, community, funders… resource mix: earned, grant, donations, voluntary time social capital: trust & co-operation strong user linkages worker involvement

www.emes.net

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Social enterprise ideal type4 economic criteria

continuous trading activity autonomy economic risk paid workers

5 social criteria explicit aim of community benefit citizen initiative decision making not on basis of capital participation - user involvement limited profit distribution

www.emes.net

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Types of WISE

ELEXIES study (EMES 2003, 12 MSs)

44 types

in 4 groups: permanent wage support

self-supporting / tapering wage support

(re)socialisation through work

transitional wage support

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4 groups of WISEs (EMES)

EIf

AIf

ETTIf

GEIQf

EFTb

LVdk

BWg

KBg

BLUIg

VOfin

ONCEs

EIs

CEEs

STOfin

ILMOuk

VOukCOSOi

RQf

CBuk

WCOuk

SBGg

EIp

EIb

IBb

EINf

sw

SFuk

Ruk

ETAb

BWb

SWb

SHsw

EPp

SEirl

SKsw

AZCb

CAVAf

COs

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Social objectives

3 broad fields:

inclusion through work

service provision: social,

environmental, cultural...

value-based activity, esp. fair trade

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Social enterprises in the UK

55,000 enterprises, €40 bn turnover, ½ m jobs

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Social firms in the UK

10m people in UK have a disability!

5 150 in 10 years – growth 10% p.a.

half >25% severely disadvantaged

1,700 fte jobs (52% for disadvantaged)

catering 52%, recycling, horticulture

largest = Pluss: 470 jobs, t/o €30m p.a.

funding largely by social services

trade directory: www.trade.socialfirms.co.uk

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Social Firms UK

Strategic partnership with Office of Third Sector

5-year MoU stipulates:represent views & experience of sector

raise awareness of social enterprise

spread good practice (Star scheme, visits)

influence government policy

remove barriers to growth

reach out to BAME

separate financial agreements

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Star social firms standard (1)

Enterprise + Employment + Empowerment

Enterprise:non-profit / co-op

trading structure

employment objectives

half income from market

independence (desirable)

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Star social firms standard (2)Employment:

25% of workers severely disadvantaged

parity of treatment between all workers

contract of employment

market or minimum wage

staff development

legal compliance (EO, H&S etc.)

“acknowledged as good employer”

disadvantaged at all levels (desirable)

IIP accreditation (desirable)

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Star social firms standard (3)Empowerment:

adjust to employees’ needs

volunteer agreements

stress management procedures

staff development a priority

participation in decision-making

confidentiality

disability, equality & awareness training

training for disadvantaged staff

social accounting (desirable)

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2. EQUAL & WISEs

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EQUAL – scale & scope

R&D dep’t of the European Social Fund Community Initiative – experiments to make mainstream more effective Budget: €3 billion / 6 years 3 ‘actions’ Development partnerships:

Round 1 (2002): 1,399 Round 2 (2005): 2,081 Total: 3,480

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Social economy in EQUAL

3rd most popular of 9 themes9% of EQUAL budget424 development partnerships7 partners on average 3,000 organisations involvedaverage DP budget €1.3m (UK ave €2.2m ... SK ave €0.2m)

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159 265 social economy DPsCountry Round 1 Round 2

Italy 71 111Poland - 25Slovakia - 24France 28 24Finland 6 13Greece 5 10UK (GB) 8 10Czech Republic 2 9Germany 8 9Netherlands 6 9Austria 16 8Portugal 6 7Flanders 3 4Wallonia - 2

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Main themes of EQUAL 2 DPs

All DPs - Main theme (N=265)

158

59

35

13

0

20

40

60

80

100

120

140

160

180

Businessdevelopment

(60%)

Individualdevelopment

(22%)

Institutionalframew ork (13%)

Territorialdevelopment (5%)

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Main clusters in EQUAL 2

0

10

20

30

40

50

60

70

80

Institutionalframeworkconditions

Business start-up &incubation

Sector & clusterdevelopment

Work integration

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Activity chain – round 1

workshops, Brussels, October 2003 Strengthening the Social Economy, Antwerp, May 2004 workshops, Brussels, June 2004 European social economy conference, Kraków, October 2004

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Activity chain – round 2 Building the case for, and the

capacity of, the social economy: Showcase, Warsaw, 10-12 May 06

Local development, Rome, 4-5 Dec 06

Social enterprise, Helsinki, 5-6 Feb 07

Policy forum, Hannover, 5-6 Jun 07

Procurement, Antwerp, 10-11 Apr 08

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3. Eight aspects ofgood practice in support for WISEs

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8 aspects of support to WISEs

1. government strategy

2. legal & financial framework

3. local partnerships

4. business support

5. sectoral development strategies

6. access to larger markets

7. impact measurement

8. community of practice

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1. UK social enterprise strategy

ambitious: aimed to achieve a step change

proactive: defined the concept

comprehensive & integrated

participative

capacity-building (SEC)

accountable

partner-oriented (EQUAL)

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UK social enterprise strategyCreate an enabling environment

Government role: interdepartmental, enabling, direct support e.g. Social Enterprise CoalitionLegal and regulatory, e.g. Community Interest CompanyPublic procurement

Make social enterprises better businessesBusiness support and trainingFinance and funding

Establish the value of social enterpriseEstablish knowledge base (research)Recognise achievement and spread the wordCreate trust: social audit and quality

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Scaling New Heights (2006)Aims:

engendering cultural change

improving the supply of advice and finance

improving relations with the public sector

Activities:fostering a culture of social enterprise

ensuring the right information and advice are available

enabling social enterprises to access appropriate finance

enabling social enterprises to work with government

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2. Legal frameworks

Germany – Integrationsfirma

Italy – type B social co-operative

Austria – Beschäftigungsbetrieb

Greece – KoiSPE

UK – social firm

France – SCIC

Finland – social enterprise

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Community Interest Company (UK)

permissive, flexible, popular (1,650)

light regulation

any type of company

no tax relief

community interest test

reasonable investor return

dividend cap & asset lock

possible access to public contracts

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Social firms for the mentally ill Synergia, Greece

KoiSPE dual status: business + mental health unit

membership by MH professionals

investment shares

in-kind support

local development impact

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3. Local co-planning

Agenzia de Cittadinanza, Milan

broad partnership (91 partners)

build SE capacity – bilancio sociale

defragment social service delivery

4 local piani di zona

local tavoli changed the balance of power

procurement via negotiated procedure

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Neighbourhood services Werk.Waardig, Kortrijk

jobs, services, quality of lifebase on needsanalysismultiple activities,multiple financing= ‘cloverleaf model’service voucherspublic recognition ofnew needs, e.g.flexible childcare

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19 new sources of jobs

Everyday services

Home help, childcare, ICTs, young people in difficulty

Improving the quality of life

Housing, security, transport, public spaces, local shops

Culture & leisure

Tourism, audiovisual, heritage, local culture, sport

Environment Waste, water, protect natural areas, pollution, energy

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The cloverleaf model

EmploymentE.g. wage subsidy for hiring risk groups such as LTU, compensation for lower productivity and/or extra guidance

ClientUser charges (plus sometimes consumer subsidy through service vouchers)

Other policiesE.g. childcare, homecare, tourism, mobility, culture

Local authoritye.g. social tender for community added value, cohesion, community development, poverty

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4. Dedicated business supportCoompanion (FKU), Sweden

25 local agencies total income €6.7m baseline state funding – stability local matching funding – rootedness & partnership loose federal structure community of practice – 85 workers political voice

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Mainstream business supportQUASAR,Italy

social enterprises are a market! national partnership between co-op consortia & chambers of commerce 8 local observatories 7 working groups enterprise check-ups training for advisers

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Co-operative incubatorsBusiness & employment co-operatives,

France

A 3-phase career: supported entrepreneur salaried entrepreneur member entrepreneur

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5. A successful sectoral strategy Electronic waste (WEEE)

seize new opportunity(EU regulation)

stress social added value

multiple benefits for multiple stakeholders

multiple finance sources for multiple activities

public and private partners

European network (RREUSE)

EEIG (SerraNet)

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RecyclingÖkoservice, Graz

value driven: waste / jobs / locality 3-way partnership complementary activities entrepreneurial corporate status wage subsidy network of contacts in local authorities national + European networks + EEIG

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6. Social franchising

open source vs. patentedmobilise idle localresourceslocal capacity building

Le Mat (IT – hotels) CAP Märkte (DE – supermarkets) CASA (UK – home care) Vägen Ut! (SE – halfway houses)

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Home careSunderland Home Care Associates

185 employees

employee ownership – annual share bonus

low staff turnover higher quality care

franchisor CASA – reciprocalshareholding withfranchisees

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Social franchising methods

return to innovation

patent or open source

licensing / social franchising

conditions: (socially) profitable business idea

support from franchisor

professional enough team

enough money to invest

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Self-help sectoral development

marketing / branding / internet

joint purchasing

specialisation

development fund

supply chain integration

transnational trading

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Public procurementBEST Procurement, East Midlands,UK

act on both supply & demand

build capacity through training & consortia

build technical skills of procurement professionals

make ‘business case’ for achieving best value

leadership from EU & MS governments

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Public procurement (2)

get in early

use negotiated procedure more?

target development work on identified market opportunities

division of benefits joint commissioning outcome-focused procurement

interdepartmental learning platfroms

ministers take initiatives to get synergies

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7. Quality & impact measurement

shared values quality indicators (qualitative + quantitative) branding, visibility simplicity don’t make it a burden

www.proveandimprove.org

New Economics Foundation,UK

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Impact measurement

Socio-economic reporting (Sweden)

Nilsson & Wadeskog studied 2 social co-ops for ex-addicts in Göteborg in 2005: Basta (65 mainly men) & Vägen Ut! (19 mainly women)mapped 130 factors in 5 clusters: income, treatment, crime, housing and children – each addict in effect employs 2½ peopleif someone stays 3 years, the municipality pays out €31,500 but society saves €595,000 – a return of 1,890%.social profit of €110,000 per employee per year

www.seeab.se

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Social firms for ex-addictsEgenmakt för

Framtiden,Sweden

Basta, Basta Väst ...competitive enterprisepeer supportempowerment – colleagues not clientssocial return – reduced cost of crimepractical basis for qualifications

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Impact measurement

Socio-economic reporting (Finland)A workplace has 33 disabled employees, of whom 24 paid a wage, 6 pension + wage and 3 wage + wage subsidy.It receives a subsidy of €297,000, but pays €391,000 in tax and national insurance, resulting in a net benefit to society of €95,000.Deduct: costs that would have been incurred if the workplace had not existed. (It is estimated that 20 of the employees would be on unemployment benefit, 4 working on the open market and 3 working but receiving a wage subsidy.) = €121,000 in expenditure, of which €75,600 flows back to the state, leaving a net cost of €45,400.Adding these two together, the workplace generates a social benefit of €140,000, equivalent to €4,300 per disabled employee per year.

European Social Fund

8. Community of practice

COPIE = Community of Practice on Inclusive Entrepreneurship

“A group of people who share a concern, a set of problems, or a passion about a topic, and who deepen their knowledge and expertise by interacting on an ongoing basis”

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COPIE online tools

COPIE = Community of Practice on Inclusive Entrepreneurship

wiki: www.wikipreneurship.eu

best practice database: www.copie.esflive.eu

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4. Recommendations

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Conclusions & issues

level playing field

compensate WISEs for lower productivity: “3 Cs”: compensation, capital, consultancy

encourage entrepreneurial behaviour

be permissive not restrictive

definition of disadvantage

percentage of disadvantaged people

issue over labour law and minimum wage60

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Government recognition

measure socialadded value

compensate for costs of integration

more rational public procurement

braided support system