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This week, more than 1,400 people travelling from 47 countries will attend the 2018 social enterprise world forum here in Edinburgh. Delegates will have the opportunity to hear from pioneering social entrepreneurs, take part in debates and benefit from master classes.
Many will know that the forum, now celebrating its 10th anniversary, is a product of Scotland. In 2008, with the support of the Scottish Government and its enterprise agencies, Community Enterprise in Scotland—a social enterprise in Glasgow—delivered the inaugural event in Edinburgh in 2008. For the subsequent 10 years, this Scottish export has toured the world, with cities competing for the opportunity to play host. In cities from Johannesburg to Hong Kong, more than 7,500 social entrepreneurs and supporters have attended to date, contributing knowledge and passion to this global movement, and since that first event back in 2008, Scotland has secured its reputation as a world-leading social enterprise nation.
This time last year, my predecessor Angela Constance travelled to New Zealand to participate in the formal handover ceremony confirming Edinburgh as 2018 host. By doing so, she confirmed Scotland as the only country to host the world forum twice. I sincerely pay tribute to Angela Constance for her dedication to the sector.
We should be very proud that our country has taken such a lead and is viewed as leading the global social enterprise movement. Although this week’s gathering is of countries that are separated by many miles, what unites them and each and every social enterprise is the determination to do good and put something back into communities and societies and the fact that they are motivated by a belief in the ability to transform positively.
The chance to celebrate the 10th anniversary of the social enterprise world forum provides us with an opportunity to reflect on the growth of social enterprise in Scotland over that decade. However, although we are contributing to the debate that recognises the forum’s 10th anniversary, Scotland’s association with socially responsible business is much older than that, going from New Lanark in the 19th century, in my constituency of Clydesdale, to the co-operative and community business movements of the 1970s and right up to the present day. Over the past decade, the Scottish Government and all parties in this Parliament have continued to champion social enterprise, working with the sector to put in place a comprehensive ecosystem of support. Incubators, accelerators, free business advice, 16 local social enterprise networks, leadership programmes and social investment are all on offer for aspiring social entrepreneurs, whether they are starting a cafe supporting refugees or a fitness gym providing mental health support.
The Scottish Government knows the power of using social enterprise as a tool to tackle inequality and promote inclusive economic growth. However, social enterprise does not only empower communities; it is also incredibly good for the economy. The sector contributes £2 million gross value added each year and employs around 80,000 people.
The inclusive economic growth that social enterprises demonstrate is why, in December 2016, we launched Scotland’s first ever dedicated social enterprise strategy. Fully co-produced with the sector and set over 10 years, it sets out three strategic priorities: stimulating more social entrepreneurship, developing stronger organisations and realising market opportunities. Since the launch of the strategy in December 2016 and its accompanying action plan in April 2017, we have invested more than £7 million to realise those ambitions. That has included more than £2 million for the social entrepreneurs fund, which provides advice and seed capital to more than 160 start-ups; £660,000 for the Social Enterprise Academy to get social enterprise learning into every primary and secondary school in Scotland, reaching more than 300 schools to date; £2 million for free business support through Just Enterprise, with more than 1,800 social enterprise leaders benefiting; £270,000 for the community shares Scotland service, providing an innovative way for communities to raise the funding that they need and supporting projects such as Govanhill baths and the Rockfield centre; £200,000 for Big Issue Invest to deliver its “Power up Scotland” programme, providing corporate mentoring and investment to 13 social enterprises over the next two years; more than £100,000 for the Council of Ethnic Minority Voluntary Sector Organisations, which will support more social enterprises such as Radiant and Brighter, an employability social enterprise supporting migrant communities in Glasgow that I visited last month; and more than £400,000 for the partnership for procurement programme, which provides technical support to people who are interested in forming consortia to bid for large contracts.
The sector continues to grow. The Scottish Government is committed to conducting a census of social enterprise in Scotland every two years. In September last year, the results of the second census were announced. There are now more than 5,000 social enterprises in Scotland, which represents a growth of almost 10 per cent since 2015. Women lead 64 per cent of them, including Hey Girls, which was recently chosen to deliver the Scottish Government’s initiative to provide free sanitary products to school pupils and students. Some 79 per cent sell directly to the public. Brewgooder is an example of one of those. It produces a social enterprise craft beer with profits going to tackle water poverty in Malawi. Rural Scotland now accounts for 37 per cent of Scotland’s social enterprises, despite being home to only 18 per cent of the nation’s population, with the highest densities of social enterprise being found in the Highlands and Islands. Further, 70 per cent of our social enterprises are led by, and are accountable to, people in particular communities, such as the Mull and Iona Community Trust, which was set up by residents with a focus on sustainable development and which recently celebrated its 20th year.
The sector is growing its reach internationally, too. Some 7 per cent of our social enterprises trade internationally, such as the Social Enterprise Academy, which now operates in 12 countries.
Scotland has a great deal to celebrate, especially now that local authorities are developing their own strategic approaches. Only last night, Glasgow City Council launched its local social enterprise strategy, developed in partnership with Glasgow’s social enterprise network.
With so much happening across Scotland, and given the vibrancy of the sector, it is vital that this story is properly captured, understood and shared for the benefit of all. That is why I am delighted to announce that the Scottish Government will provide £90,000 to the Yunus centre for social business and health at Glasgow Caledonian University—named in honour of Nobel peace prize laureate Muhammad Yunus—to help to establish Scotland’s social enterprise collection. That work will build on existing materials held by the university in honour of John Pearce, an influential figure in Scotland’s community enterprise movement.
I want to follow up on the point about the role of local authorities in promoting social enterprise. The Economy, Jobs and Fair Work Committee recently heard from key stakeholders that the Scottish Government and local authorities could use procurement policy to award more public sector contracts to social enterprises in their areas. Would you care to give us your views on that concern?
I am well aware of the member’s particular interest in social enterprise and I read with interest the committee’s recommendations. If we can put more effort into ensuring that social enterprise can benefit from procurement, we must seek to do so. I will continue to engage with the member and the committee on that issue.
The funding to the Yunus centre will not only establish the world’s first dedicated archive for social enterprise but generate new digital resources and a travelling exhibition to reach out across Scotland. It is imperative that more communities find out about, and are supported to use, social enterprise as a tool for transformational change. It is also important, given Scotland’s historical association with socially responsible business, that we can tell that story and preserve it for the future. I look to ensure that we can seek out future opportunities as well.
This week’s forum not only brings a huge opportunity for Scotland’s social enterprises to raise their profile, but is a chance to access supply chains. I am delighted that at least 60 per cent of spend relating to the world forum will go to other social enterprise and third sector suppliers, from catering to translation. The organisers believe that it will be the highest ever spend on social enterprises at any major event in the world.
However, the spotlight on social enterprise will not end with the closing ceremony of the forum. In November, the winners of the social enterprise awards Scotland will be announced. This year, there are seven categories, including the coveted social enterprise of the year award, which was secured last year by the Grassmarket Community Project. Chris Martin, managing director of Callander youth hostel and winner of the social enterprise champion award in 2017, has continued to advocate on behalf of the sector. As a result of his efforts, I am delighted to confirm that, this evening, Callander will be announced as Scotland’s first social enterprise town, as part of the social enterprise places programme delivered by Social Enterprise UK.
Scotland is viewed around the world as a leader in social enterprise. We have strong historical roots to build on, combined with a rich, varied and diverse social enterprise sector that is contributing significantly to the socioeconomic wellbeing of our country. Nevertheless, we know that there continue to be challenges and areas where we can continue to improve, which is why it is right that we continue to support the sector and make improvements through our 10-year strategic plan. Further, we must not be complacent and, if we want to continue to lead the world in how we nurture our social enterprises, we must be agile and open to new ideas and opportunities. That underlines Dean Lockhart’s point.
I am delighted to have social enterprise in my new portfolio, because social enterprises capture the essence of all that is good in our country and our communities. Social enterprises believe in our communities, and they recognise their resilience and reflect their assets and strength. I sincerely look forward to engaging with members on that issue, through this debate and through the new cross-party group, which I think will have Tom Arthur MSP as its convener.
That the Parliament joins Scotland’s social enterprise community to welcome the Social Enterprise World Forum 2018 taking place on 12 to 14 September 2018 at the Edinburgh International Conference Centre; congratulates the event’s organiser, CEIS, and all those involved in planning, delivering and supporting this three-day event, which will attract more than 1,400 delegates from across the world; recognises that this successful international event has its roots in Scotland with the inaugural event taking place in Edinburgh in 2008 with support from the Scottish Government and its enterprise agencies; notes the excellent partnership working across the public and third sectors over the last 10 years, which has established Scotland’s world-leading reputation for social enterprise; continues to support the ambitions of the Scottish Government and the social enterprise community as set out in
Scotland’s Social Enterprise Strategy 2016-26 and accompanying action plan,
Building A Sustainable Social Enterprise Sector In Scotland 2017-20
, and looks forward to 2019, when the Scottish Government will again work collaboratively with the sector to conduct the third national census of social enterprise in Scotland to ensure that it continues to understand how social enterprise is growing, where further support is needed, and what evidence there is to demonstrate the impact of social enterprise on reducing inequality in Scotland.
The Scottish Conservatives welcome this debate on social enterprise and the well-deserved recognition of the social enterprise world forum that is taking place around Scotland this week. I congratulate Community Enterprise in Scotland and everyone else who is involved in supporting the event, which will attract more than 1,400 people from around the world, as the cabinet secretary said.
Since the first social enterprise world forum in 2008, social enterprises around the world have transformed lives, revitalised communities and helped to tackle major economic issues. Scotland has been at the forefront of those developments.
As we have heard, there are more than 5,000 social enterprises in Scotland today, playing an increasingly important role in our changing economy and contributing in ways that commercial enterprises do not. They play a unique role in economic, social and community development and they often save money for the public purse—for example, by helping to reduce reoffending rates through employing individuals who are sometimes passed over by the commercial sector. The sector is female-led; more than 60 per cent of social enterprises are led by women.
Social enterprises also reach all parts of Scotland—cities, towns and villages. I add my congratulations to those of the cabinet secretary to the town of Callander, which is in my region, on being named Scotland’s first social enterprise place in recognition of its being a hotspot of social enterprise activity. Organisations such as Callander Youth Project Trust and Callander Community Hydro Ltd are great examples of the impact that can be made in communities.
The latest social enterprise census provides an encouraging picture, with more than 110,000 people being employed by social enterprises in Scotland. The debate gives us the opportunity to look at how we can build on that success. The Scottish Conservatives’ amendment to the Government motion for debate refers to recent evidence that was given to the then Economy, Jobs and Fair Work Committee by leading stakeholders from the sector. The evidence highlighted some of the key opportunities and challenges that the sector faces, which we need to address in order to ensure that Scotland continues to have a leadership role to play in the future.
I will mention three issues that were highlighted in committee by stakeholders. First, there is the issue of the financial and business support that is available to the sector. In evidence, Nora Senior, chair of the Scottish Government’s enterprise and skills strategic board, said:
“Social enterprises are currently on the cusp; they do not fall under a single criterion for investment, and some of them really struggle to get the investment that they need in order to grow. It would be helpful if there was a mechanism to address that.”—[
Official Report, Economy, Jobs and Fair Work Committee
, 27 February 2018; c 6.]
The committee heard further evidence that there is a “cluttered landscape” of financial and business support for development of social enterprises. Grants, project funding and other forms of financial support are available from a long list of agencies, with different objectives and outcomes attached to the funding streams. That is hindering the sector’s development.
However, it is not just a question of financial support: social enterprises need business support, too, and it is often difficult for new social enterprises to get help with business planning, setting up an office or hiring staff. I encourage the cabinet secretary to take forward work in that area.
We need to ensure that Government policies for enterprise development in commercial and social enterprises are better aligned, and that support is better co-ordinated across Government agencies. The Scottish Government’s “Enterprise and Skills Review: Report on Phase 2” that was published in June 2017 was a missed opportunity to do that, so I would welcome the cabinet secretary’s thoughts on how those issues can be addressed in the future.
The role of public procurement contracts is another important issue that was raised by a number of stakeholders in committee. We heard that public procurement policy should be used more effectively to promote social enterprises in local authority areas. The public sector in Scotland spends around £11 billion a year on public procurement of goods and services, but figures that were published last week show that the number of Scottish businesses that are winning work from their local authority has halved over the past decade, from more than 50,000 local suppliers being successful in local tenders in 2008 to just under 30,000 last year. That is a concern, because it means that we are missing the potential to support local businesses—including social enterprises—and communities.
Recent changes to European Union procurement law means that the Scottish Government and local authorities have the legal framework to make a difference in that area and to promote further the level of public procurement from social enterprises, especially those that are supported business, and get them involved in public sector contracts. Again, I look forward to the cabinet secretary addressing that issue in her closing remarks.
Another important concern that was raised with the committee was the lack of clarity about Government policy on social enterprises and in how Government agencies define whether an organisation is a social enterprise. That fundamental concern was raised by a number of witnesses. One told the committee:
“there is a concern ... about uncertainty around the definition of ‘social enterprise’ ... given the possibility of commercial organisations suggesting that they are social enterprises when they are not.”—[
Official Report, Economy, Jobs and Fair Work Committee
, 6 February 2018; c 49.]
In Scotland, there is no legal definition of a social enterprise. “The Social Enterprise Code” is a helpful guide to best practice, but it is not definitive. As a result, a number of people are confused as to how they should arrange their business affairs—how they should incorporate their company or business—in order to qualify as a social enterprise.
Another witness told the committee:
“I could not understand how to make the business model work”.—[
Official Report, Economy, Jobs and Fair Work Committee,
6 February 2018; c 32.]
That is another area that the cabinet secretary should take forward so that there is more clarity on what constitutes a social enterprise.
I conclude by repeating our strong support for the social enterprise sector and wishing the social enterprise world forum every success.
I have outlined some constructive challenges that I believe need to be addressed—they were raised by key stakeholders from the sector—so that the social enterprise sector in Scotland has strong foundations for on-going success.
I move amendment S5M-13813.1, to insert at end:
“; acknowledges the recommendations of the Economy, Jobs and Fair Work committee in its report,
Scotland’s Economic Performance
(SP Paper 359), in relation to the need to promote a better understanding of social enterprise in Scotland, and recognises the need to ensure that social enterprises are better able to access financial and other support from government agencies.”
I, too, welcome the Cabinet Secretary for Communities and Local Government to her new post, and I thank Angela Constance for her previous service in the area. I also thank the cabinet secretary for lodging her important motion. We are all delighted that the social enterprise world forum is taking place in Edinburgh and that we are hosting delegates from around the world. I hope that the visitors to our capital city have a wonderful experience this week.
We all agree that Scotland is lucky to be home to a host of dynamic and important social enterprises that play roles in all our communities, and often do life-changing work. I look forward to hearing about more positive examples throughout the debate.
For our part, the Labour Party has a proud history of being a champion of social enterprise. It was a Scottish Labour Government that, 17 years ago, created Social Investment Scotland. It was designed to be a vehicle for improved financial access for the social enterprise sector and it is still going strong today, making loans to the sector to enable it to grow. Since its inception in 2001, Social Investment Scotland has invested more than £56 million in 270 organisations across Scotland. That has undoubtedly been positive for the sector, but we believe that more must now be done to improve the availability and sustainability of financing.
The Labour Party also has strong links with the co-operative movement, which is another positive model for an inclusive economy. Scottish Labour aims to double the size of the co-operative sector in the United Kingdom, and in our industrial strategy we talk about placing Co-operative Development Scotland on a statutory footing.
As we have already heard, there is certainly economic return on investment. There are 5,600 social enterprises in Scotland and they employ 80,000 people. The census that the cabinet secretary mentioned showed that the net worth of our social enterprises is an incredible £5 billion, and they represent £2 billion of gross value added. Some 72 per cent of employees in the sector are paid the real living wage and 64 per cent of social enterprises are led by women. It is good to note that.
Positive social impact is, of course, the other crucial return on investment. Social enterprises demonstrate a hugely valuable and ethical way of working and show what can be achieved by setting up an organisation that is motivated by a social or environmental mission rather than by profit. Such organisations can make a huge difference to people’s lives, particularly the lives of vulnerable people, and they are increasingly depended upon as austerity strips back our public services.
On housing, for example, when I had a catch-up with Shelter Scotland last week, I heard that someone becomes homeless every 18 minutes in Scotland. It is invaluable that social enterprises such as The Big Issue exist to help people to get back on their feet: 92,000 people have worked as vendors since its creation back in 1991.
Social enterprises can also play a role in regenerating our high streets. Swaddle, in my area in Hamilton, is a social enterprise that was set up by local mums for local mums. It has a vibrant shop and a range of events take place there, from storytelling and singalong sessions to mum-led support groups. It is a great place in which to buy baby clothing, books and other such nice things.
The sector has a strong history of coming up with creative solutions to social challenges. With my proposed member’s bill to end period poverty, I have seen at first hand social enterprises responding creatively to that issue in the UK and beyond. For example, I met Bharat Singh Chaturvedi from Sanitree, which is a social enterprise that was founded in Edinburgh to promote sustainable and stigma-free access to period products for women and girls in the Bhind district of India. I was pleased that the cabinet secretary mentioned in her opening remarks the East Lothian based Hey Girls social enterprise, as its “buy one, give one” model really helps girls from low-income households throughout the UK. It is good to hear that it will be involved in the Scottish Government’s free period products scheme. I hope that universal access to period products will follow soon, with my proposed member’s bill to end period poverty.
In conclusion, I pay tribute to social enterprises in Scotland for their contribution to the Scottish economy and for the role that they play in all our local communities in Scotland and beyond. It is clear to us that there is an opportunity for well-resourced local authorities and social enterprises to work together to advance their common purpose of making Scotland a better place in which to live.
For all those reasons, we will support the Scottish Government’s motion and Dean Lockhart’s amendment because we, too, welcome the recommendations in the Economy, Jobs and Fair Work Committee’s report and agree that there is a
“need to ensure that social enterprises are better able to access financial and other support from government agencies.”
However, it is because of the increased pressure on their services in this age of continued austerity that Scottish Labour seeks to add to the motion.
For that reason, I move amendment S5M-13813.2, to insert at end:
“, and notes that, in the current climate of austerity, social enterprises have taken on an even more significant role, by filling gaps left by cuts to the welfare system and pressure on public services.”
Like other members, I welcome Aileen Campbell to her new role in the Government and congratulate her on her appointment.
The Greens will—like all the other parties, I hope—vote for the motion and the amendments at decision time.
In debating social enterprise, I will first indulge myself with a little bit of nostalgia. I was 10 years old or thereabouts in my first role in the social enterprise sector. My mum and some pals decided that they were not willing to wait around for the Government to finally get around to doing something about recycling and that they were going to set up their own project. Waste management, recycling and zero-waste approaches are one area in which social enterprise and community activism organised through social enterprises really have led the way. Before Government at any level was really doing anything about the issue, communities took the initiative themselves with a borrowed van, sometimes roping in their kids, as I was roped in, to hurl bundles of newspapers around on a Saturday morning; it felt like a lot of fun at the time.
That whole process led to the development of a significant sector that developed innovative approaches to resource use and zero-waste policies. Eventually, local and national Government recognised that they had a responsibility, too, and they stepped up to it because of the community leadership that had happened.
After university, I slightly fell on hard times and had to go back and live with my mum and dad. My mother said, “Yes, of course you can come back and live here—there’ll always be a place for you. And you can go out to work on my new furniture recycling project.” That initiative and community drive were still there.
A theme that ran through both those projects was the need to place real value not just on the physical resources that could be diverted from landfill, but on the human resources—the value of the human beings whose effort, creativity and talent were not being used by the private sector. Many people are far from the labour market, but social enterprise is fantastically creative at finding ways of bringing them back, not only to productive work, but to relationships with one another and the community around them. I see from the world forum’s programme that that attitude to resource management and to zero-waste approaches remains a fundamental part of the social enterprise movement.
Intervention from Government is still required. We have recently heard bad news about Greenlight Recycling in Dumbarton. I am not sure whether this is an interest that I should declare formally, but my mother has been a director of that recycling project since its inception. It is sad to see the project failing. The project encountered the problem of the decline in demand for and therefore the price of the recyclates, but that is not the only problem, although it set the fundamental context. Government intervention is necessary if we are to make sure that such social enterprises have the economic context in which they can work effectively and deliver their services sustainably. It is clear that a free-market approach fails to achieve the social and environmental return from such projects; it also fails to achieve that highly inclusive and diverse approach to employment that social enterprises so often achieve.
It has been said, quite correctly, that social enterprise means different things to different people—it is an umbrella or catch-all term. For some, it is a nice-to-have optional extra in the economy—something that is akin to philanthropy. For others, it is a revenue-generating source that pays for charitable work. I think, and Greens believe strongly, that along with co-operatives, mutuals and community ownership, social enterprise in its broadest sense should be seen as a better, fundamentally superior basis for our whole economy.
Let us look at the characteristics of social enterprises, which members across the chamber will recognise in organisations in their own communities. We see organisations that recognise diversity in their employment practices and among the diverse needs of the service users with whom they engage. We see organisations that have a higher-than-average commitment to paying the living wage and to having low wage differentials—organisations that do not have extreme high pay for managers and which recognise their responsibility to create a more equal economy. We see organisations that respect the responsibility that they have for the whole impact of their economic activity. Essentially, such an economy is one that is driven by values rather than by a desire to extract ever more private profit.
We should be aiming for a social economy, because the alternative is to continue to tolerate the antisocial economy that we have today. I hope that the Scottish Government will commit to ensuring that its resources and all forms of business support services for the private sector are not only open to social enterprise, but positively incentivise businesses to adopt social enterprise models.
I, too, welcome the cabinet secretary to her new position; I also welcome her contribution this afternoon.
I welcome the delegates who are attending the forum this week. The very fact that the forum exists and that people from across the globe are trying to enhance the social enterprise network is heartening. Furthermore, the fact that the forum is being held here shows that it is important to this country. I hope that the delegates have a fruitful week.
The sector is growing—it is up by 10 per cent. There are some organisations in the sector in my constituency. Castle Enterprise Scotland—a furniture project—was established in 1993. The secret to its success is that it provides local employment and training opportunities and household goods for people from disadvantaged families, which is a great combination.
Dunshalt Community Shop is probably the newest social enterprise on the scene. The project got £100,000 from the Scottish land fund and the community managed to raise £30,000 locally—from 200 local people—in its endeavour to reopen the village shop. Dunshalt is a tiny village just outside Auchtermuchty, whose shop closed last year. The community has engaged in a big battle to try to reopen the shop, and I wish it all success in doing so.
At the other end of the scale, in Tayport, in north-east Fife, right up by Dundee, people have raised a whopping £2.8 million to develop a sports, arts and craft business as well as an employment and training facility. The community will try to take advantage of its proximity to the V&A, which will open later this week, by providing a camper van and camping site—the closest site to the museum. When the site opens, I encourage people to spend a weekend there and take advantage of the opportunity to see the sea eagles that are often spotted off Tentsmuir Point, just round the corner.
I have given members a flavour of the wide spectrum of social enterprise and of how the sector is buoyant and growing, but we should not pretend that it is all easy. The social enterprise census gave us some stark numbers. Some 40 per cent of social enterprises are housing associations, which are good institutions but are perhaps not what one first thinks of in the context of social enterprise, so the situation does not reflect the wide diversity that we would like in the sector. Some 57 per cent of social enterprises are small, 34 per cent have been going for 10 years or less, and 41 per cent made a loss in the past year, which should be cause for great concern.
There is quite a turnover in the sector. Some social enterprises find it difficult to make the finances work. Given that part of the approach is to try to make them financially independent, that should be a cause for concern. That is why I was pleased that the cabinet secretary confirmed that the £2 million for Just Enterprise and the growth, start-up and recovery support mechanisms will continue and that the position will be reviewed within the next year. That will be welcome, because the area requires support.
My wife previously worked for a couple of social enterprises, both of which subsequently closed down. One was a book recycling project in Cowdenbeath, and the other was a paint recycling project in Glenrothes. Neither managed to continue; they struggled to make the finances and the financial model work.
Those examples, just from Fife, show that although some social enterprises grow and achieve great success, others do not do so, even when the model that was initially established was sound. We should therefore not get too carried away in thinking that the sector is vibrant and is constantly growing. Although there are more social enterprises, many find it very difficult to make ends meet. We should be working constantly to find and put in place the financial support and mechanisms that can make social enterprises financially independent. It is right that we create social capital and boost the environment, but it is also about financial independence and a new model of business, which should not require Government constantly to step in to support it and enable it to succeed.
At the other end of the scale, what some of the big social enterprises have managed to achieve is quite astonishing. I mention just two. Cafédirect is an innovative scheme that ploughs 50 per cent of its profits back into the coffee-growing communities from which it buys its products. Indeed, the communities own 50 per cent of the company’s shares. It is an international social enterprise that provides a good, Fairtrade, environmentally sustainable product for customers here—a great example of a thriving social enterprise.
The Big Issue, which has been mentioned, was established in 1991. Since then, 92,000 vendors have benefited, to the tune of £115 million. That is a hugely successful social enterprise. I hope that the social enterprises in Dunshalt, Cupar and Tayport one day achieve the dizzy heights of Cafédirect and The Big Issue.
I am delighted to participate in this afternoon’s very important debate. It is true to say that, like others, my constituency has so many fantastic social enterprises that it would be an impossible job to name all those with which I have had an association and have come to admire. Therefore, I hope that those who do not get a name check today will understand why I have decided to tell the story of just one very special small town in my constituency, which is Callander.
As the cabinet secretary outlined in her opening remarks, Callander has just won the fantastic national accolade of becoming Scotland’s first social enterprise town. This accreditation recognises—as Dean Lockhart rightly said—what an incredible hotspot for social enterprise activity the town has become since I was first elected to the Scottish Parliament in 1999. Callander, on the edge of the Highlands, is the largest settlement in the Loch Lomond and the Trossachs national park and is a predominantly tourism town. Its resilient community has, for more than 20 years, used social enterprise to tackle local issues.
Presiding Officer, let me take you on a whistle-stop tour of Callander, to tell the story of why it has received this well-deserved recognition. Let me start at Callander community hydro scheme, which was built by Callander Community Development Trust through its subsidiary Callander Community Hydro Ltd. Commissioned in October 2014 and now generating to the national grid, it is Scotland’s first community-owned hydro renewable project. It was the first to be built on ground that is owned by the Forestry Commission. The scheme donates its profits to the trust, which has funded more than 40 local projects since March 2016. A substantial income—up to £2.85 million over the next 20 years, I understand—is expected to be generated from its activities.
The next stop on our tour is the remarkable SS Sir Walter Scott, which is the oldest surviving screw-driven steamship in regular passenger service in the UK. Whoever thought that they would find that out this afternoon? It has been operating on Loch Katrine for more than 100 years, and is now owned and run by a charitable trust as part of a wider visitor attraction that last year won the award for best visitor attraction in Forth valley.
Coming back down the road into Callander itself, we stop off at McLaren community leisure centre, which is a community-led organisation that operates extensive sports and leisure facilities. The pupils of McLaren high school, which is next door, make significant use of the centre through a dual-use model.
Not far down the road, we come to Bridgend, and the remarkable Callander Youth Project Trust. The trust runs the five-star Callander hostel, which opened in 2014 and has since welcomed more than 20,000 overnight guests, trained more than 18 young people in hospitality and created 40 jobs in the local area. It also runs a cafe and events package and has recently branched out into wedding packages. The trust also uses the hostel as a base for a wide range of other youth activities. As Chris Martin from the trust said recently,
“Callander Hostel is a prime example of how a business can be set up in such a way as to generate income but also to make a significant social impact in our community. Over the years Callander Youth Project Trust has made a huge difference to the life chances of young people in the area ... to develop local talent and encourage entrepreneurship.”
Next on the tour, we arrive at the beautiful Bracklinn falls. When a storm washed away the bridge at the popular falls, Callander Community Development Trust set about raising funds and setting up a partnership to replace it, and the new bridge has developed into a unique go-to destination for visitors. Rightly disturbed by the rising number of empty shops in the town, the same trust brought together a group of artists and crafters in a co-operative that is now the independent company Creative in Callander, which is run by volunteers, has been central to the regeneration of an empty shop on the main street and offers local artists the chance to display and sell their art.
Of course, for any town to be successful, it needs to have the right homes for people to live in and, through the work of Rural Stirling Housing Association, the offer in Callander is about to be expanded significantly through the development of new homes.
I have mentioned just a few of the huge number of community groups and social enterprises that have responded to the social and economic challenges of living in Callander by using the social enterprise model. Those groups range from the community newspaper the
Ben Ledi View
, which I am sure that the Presiding Officer has read, to the community cinema that was established by the Callander Film Society.
Callander is a beautiful little town with beautiful big ideas. It has shown us what is possible when a community comes together to take on local issues and make change happen, and it is an exemplar for other communities. I know that Scotland is bristling with brilliant social enterprises, so it is an outstanding achievement for this fantastic small town to have been named the country’s first social enterprise place. I heartily congratulate everyone involved on their dedication and commitment to Callander, and I look forward to welcoming Aileen Campbell, in her new role, there this evening, when we will celebrate that remarkable accolade.
As a Lothian MSP, it gives me great pleasure to welcome the social enterprise world forum to Edinburgh again. A multitude of participants, including social enterprise leaders, policy makers, commercial partners and young people, are expected to make the trip to our country, which is seen by many of them as a world leader in this field.
We should be proud of what we have achieved in Scotland, but as the Government’s social enterprise strategy recognises, there is still much more that we can do if social enterprise is to fully become part of mainstream society and business.
I will begin by highlighting an example that shows the immense value that social enterprise already holds in our society. The Economy, Jobs and Fair Work Committee recently completed a report on Scotland’s economic performance, which my colleague Dean Lockhart touched on. During one evidence session, Jonny Kinross, chief executive of the Grassmarket Community Project here in Edinburgh, with which I am familiar, talked about individuals who are “not wanted” by the commercial or even the public sector. Of the people the project has helped, he said:
“you will never get a more loyal member of staff or anyone who is more grateful for a job. I have had people sitting in my office telling me that they would do anything for the Grassmarket. It is a hugely privileged position to have someone in your office saying that about you. That is because, in their view, you have literally saved them—you saved their life.”—[
Economy, Jobs and Fair Work Committee
, 6 February 2018; c 34.]
Those emotive words give us insight into how entrepreneurship can deliver improved social outcomes.
During my time as an MSP, I have seen at first hand that social enterprise comes in all shapes and sizes. Tiphereth Camphill community, which is based in Edinburgh Pentlands in my region, offers residential care and a variety of day services to people with learning disabilities and autism. Tiphereth’s social enterprise projects, which include making and delivering compost and firewood, give people with additional support needs a route into employment. For Tiphereth’s customers, the product has that added value that is about more than just price, quality or availability.
The social enterprise strategy notes the greater appetite that the Scottish public now have for such social products, and it goes on to hint at a social certification scheme to increase awareness, which was developed further in last year’s action plan. Given that that very initiative was called for in evidence to our committee earlier this year, I would be grateful if the cabinet secretary could provide us with an update on progress.
Other social enterprises help people in different ways, often stepping in because everyone else has left. The motto of Castle Community Bank is
“Banking, but with a community spirit.”
Indeed, as the major banks seem to be taking flight from the high street, credit unions and community banks are stepping in to see whether they can provide a viable alternative. Castle Community Bank has been looking at the possibility of doing that in parts of Edinburgh, including Juniper Green and Leith, and its willingness to step in in that way has been a comfort to those who have felt abandoned.
Those are just a few examples of the social and community benefits that can be delivered through such entrepreneurship.
As we celebrate those successes, we should recognise that there is still a lot more that can be done by social enterprises themselves, their commercial partners and—this is important—by Government. In the economy committee we heard evidence about a frustration with Government tendering processes and the need to recognise social value.
Social enterprises have spoken about competing with traditional commercial businesses that perhaps do not place as much emphasis on social benefit as social enterprises do, and they feel that that is forgotten in the procurement process. If social enterprises are to survive and compete, there must be a way for them to not only showcase the value that they bring but be able to do so easily. After all, many social enterprises are small, with 43 per cent of them generating an income of less than £50,000. Therefore, a flexible and holistic Scottish model of impact measurement would be welcome.
As we celebrate what is going on in Scotland, we should help social enterprises that want to expand further afield to do so. There is an interest elsewhere for us to go further, given our international reputation. As the Government strategy recognises, social enterprises should be able to access high-quality export advice. I wonder whether the cabinet secretary will tell us about that and whether last week’s announcement of an export partnership drive with the Confederation of British Industry will include room for successful Scottish social enterprises to work within the scheme to help similar entrepreneurs to export.
Let me conclude by thanking those who work in our social enterprise sector and wishing them well for the week ahead.
Many members have highlighted the benefits of social enterprises and given practical examples in their constituencies. Some have also talked about the statistics that back up the benefits of social enterprises: there are 5,600 social enterprises in Scotland, they employ more than 80,000 people and they generate £5 billion to the Scottish economy.
All those things are important, but I very much agree with the points that Patrick Harvie made about social enterprises taking a different, more ethical approach. There is not the same focus on the profit or loss on the balance sheet, and there tends to be a more collective approach between the people who run and use the social enterprises, which leads to more ethical trading and better working conditions. That was demonstrated by Monica Lennon, who quoted the fact that 72 per cent of social enterprises pay the living wage and that 64 per cent are led by women. Clearly, social enterprises are trailblazers in areas of the Scottish economy in which we want there to be best practice.
Social enterprises play an important role in taking on many of the challenges throughout Scotland’s communities. We have a growing elderly population. It is good that people are able to live longer, but challenges come with that. Some older people have issues with loneliness, particularly if their partner passes away. If those elderly people are able to participate in a social enterprise, or if a social enterprise is able to interact with them through providing a service, that can be very important.
Social exclusion remains a challenge in communities in which there is a lot of deprivation and people are not included in traditional employment opportunities. Social enterprises are better at reaching out to ensure that people get chances. It is fair to say that there has been more pressure on public service budgets in recent years, which has led to cuts and left a shortfall and gaps that social enterprises have been good at filling.
The Glasgow region that I represent has many good examples of social enterprises. Patrick Harvie has a members’ business debate on the issue tomorrow. In Rutherglen, the local charity Healthy n Happy has a couple of social enterprise initiatives. CamGlen bike town is great at promoting participation in cycling, which is really important. We had a good members’ business debate last week on the European championships, in which members spoke about the importance of building on the event’s legacy. Organisations such as CamGlen bike town provide support by encouraging people to cycle, promoting greater infrastructure for cycling and helping people with bike repair and maintenance. Healthy n Happy also has the Number 18 social enterprise in a former church in Rutherglen. Many groups in the area use it as a community facility, including CamGlen radio, which I was honoured to visit last Friday.
More use should be made of co-operatives, about which I declare an interest as a member of the Co-operative Party. I convene the cross-party group in the Scottish Parliament on co-operatives, which recently discussed housing co-ops. Monica Lennon spoke about some of the challenges around housing, and West Whitlawburn Housing Co-operative in my area has been a shining example of how to address some of those challenges. However, no housing co-ops have been established in Scotland for 15 years. We are missing a trick in housing and more generally by not promoting co-ops enough, and I would like to see the Scottish Government make co-operatives and Co-operative Development Scotland central to its economic and social strategy.
I agree with other members in their support for social enterprises and I emphasise that we need to bring co-ops more into the Government’s economic strategy. I will be interested to hear the cabinet secretary’s views on that issue in her summing up.
I think that I last spoke in a debate here on social enterprise in February 2017. Since then, we would all agree that the sector has developed, although some of the issues and challenges—including raising public understanding of social enterprises—probably continue.
I understand that there is no legal definition of a social enterprise, but there is a pretty clear voluntary code with criteria, values and behaviour. The key criteria are that a social enterprise must sell goods or services, profits must not be distributed and enterprises should be managed in an accountable and transparent way.
If we leave aside housing associations, which I see as a distinct sector, as Willie Rennie has suggested, one of the largest social enterprises in Scotland is the Wise Group, which many members will have heard of and which is based in the east end of Glasgow in my constituency. It is involved in a range of areas that include community justice, by helping people who are coming out of prison; getting into work, by supporting people who are looking for employment; and energy advice and support. Its 2017 accounts show that its turnover was £13.7 million and the average number of employees was 236.
Although many social enterprises are quite small and local, which is a good thing, we can see that it is also possible to have large and national social enterprises, and that makes me think that there is potential to have more of them on a larger scale. For example, the Wise Group also operates beyond Scotland, in the north-east of England.
Ownership has been mentioned already, and there are clearly a variety of ownership models for organisations. Such ownership models are inextricably linked to the purpose of the organisation. Sometimes we on the Economy, Energy and Fair Work Committee and in Parliament as a whole focus mainly on what a business produces. Is it building nuclear submarines? Is it involved in renewables? Is it in the tourism or hospitality sectors? Perhaps we do not concentrate so much on the ownership model and, related to the ownership model, the organisation’s motives and purpose. Ownership tends to drive an organisation’s purpose and, in most cases, a private or listed company will aim first and foremost at maximising profit. They might well have other aims, such as being good suppliers, customers or employers, but if the profit goes entirely to one owner or a group of owners, or to a wider range of institutional shareholders, that is bound to affect the way in which the organisation behaves.
However, there are other ownership models that the public and we in Parliament pay less attention to. Employee ownership is one, and the co-operative model is another, as Mr Kelly said. A social enterprise is not a specific model of ownership but, as with a charity, any profits are reinvested and not distributed. That means that the organisation will not want to run at a loss but the incentive to make profits at all costs is reduced. Motivation is also important for an organisation. I think that it was Brian Souter who said that, in relation to the bus sector, it was difficult to get a public service ethos into a private bus company. Ownership is therefore important and it affects how an organisation is seen by those inside and outside of that organisation. The fact that an organisation is not run purely for profit changes the perception of staff, customers and the wider public.
“Scotland’s Social Enterprise Strategy 2016-26” makes for interesting reading two years after its publication. On pages 11 and 12, the document talks about future influences and trends; some of those were and are opportunities and challenges and I will focus on a few of them. Under the “Political” and “Enabling Legislation” headings are opportunities in early learning and childcare. That sector is developing and has many opportunities. However, there might still be uncertainty about how much will be public sector provision, how much will be private sector, and how much might fall under social enterprise. Under “Future Public Services” there is the suggestion of more preventative services; that might have moved more slowly and the jury is still out on where we are going on that, because we have to disinvest in reactive services to invest more in preventative services. Perhaps the social enterprise sector has not therefore been able to develop as much in that area as was hoped.
The strategy also mentions “Demographic Change”. We have an ageing and changing population, and there are opportunities, but in an area such as a council area with a larger population, there are challenges in providing guaranteed care services, such as those that my mother receives in South Lanarkshire. We can see why local authorities might be more inclined to use their larger in-house provision rather than trying to deal with a number of smaller social enterprises. Those are the kind of challenges that we need to face.
“Ethical Consumption” is also mentioned. There is definitely an opportunity there. However, it is harder for people who are on a limited income, and who are virtually forced to buy the cheapest produce because it is all that they can afford, to look at some of the issues around ethical consumption.
Under “A Rebalanced Economy”, the strategy says:
“The continuing, long-term priority of achieving a more balanced economy is driving a broader and more diverse business base. This implies a growing need to foster social entrepreneurship, increase the rate of social enterprise formation, and encourage more diverse forms of business ownership.”
Are we making progress on that? I am not sure that we are. I totally agree that we need a more balanced economy and a broader, more diverse, business base but I confess that in practice, when I meet someone for a coffee in Glasgow, it is very easy to go to Caffè Nero or Costa rather than making the effort to go somewhere that is run by a social enterprise.
We have some distance to go on a number of those points and we need to keep under review what else we can do in Parliament and on committees such as the Economy, Energy and Fair Work Committee to support and encourage social enterprise. I have a feeling that I am running out of time—
I will mention just one other thing—the Glasgow Social Enterprise Network, which was established in 2017 and is now incorporated as a company limited by guarantee. I believe that it is leading the way specifically on social enterprise in the Glasgow third sector interface.
The network talks about some of the things that it has been doing, such as facilitating space for members, a platform to form partnerships and other great things.
I very much welcome the forum coming to Edinburgh and I wish it well. I am sure that it will be considering some of these issues in the coming days.
I join other members in welcoming the Social Enterprise World Forum, which is back in Edinburgh after ten years.
This week’s forum will be a truly collaborative event, with a range of sponsors from the world of business and enterprise as well as local organisations such as the University of Edinburgh. It is also positive to see the support from the partner organisations—the British Council, Community Enterprise in Scotland, the Scottish Government and Social Enterprise UK.
It has undoubtedly been a successful decade for social enterprise in Scotland. As MSPs, we have seen many become established in our communities over those years—no doubt across every region represented here in this Parliament. Some Scottish social enterprises, such as Social Bite, have gained an international reputation and more are looking towards exporting beyond our borders.
Social enterprises have a significant role to play in our economy as well as working towards socially conscious ends and responsible business practices. In many cases, people can see the direct benefits that accrue from well-run social enterprises reinvesting profits from their services back into communities and projects.
We have also heard about the opportunities presented in building productivity, skills development and, of course, employment. I am pleased to be able to look at so many social enterprises in my area and see the possibilities that they have created in relation to employment in particular and, as Dean Lockhart and Monica Lennon both said, many are led by women—rather more than in the case of conventional businesses. Others have provided fantastic new opportunities to people with disabilities.
My region, the Highlands and Islands, accounts for an enormous proportion of Scotland’s social enterprise landscape. As we know, the Highlands and Islands Enterprise area accounts for just 9 per cent of Scotland’s population but contains within it some 22 per cent of Scotland’s social enterprises.
These organisations have thrived in rural communities, but especially in those that are remote. Again, the social enterprise census illustrates this well, showing that 34 per cent of Scotland’s social enterprises are found in rural areas. In my region, this trend is quite evident. In many cases, social enterprises are created by necessity. Sometimes, it is in response to a service provided by a local business being lost; sometimes, it is about providing services that are taken for granted in the central belt; on other occasions, it is a response to a public service being withdrawn, with local people coming together to take over the reins.
In many cases, though, social enterprises find a gap in the marketplace and offer something new. COPE in Shetland has for some years built up an excellent social enterprise for local people, while also providing employment and skills development for people with learning difficulties or autism spectrum disorders. It is an organisation that has shown significant growth.
I hope that this will strike a chord with the minister, as her colleague Jamie Hepburn recently visited COPE. I do not believe I am overemphasising his comments when I say that he was clearly impressed by what he saw in Shetland.
In addition, other social enterprises in my region act to preserve local heritage and boost their local area by providing visitor attractions. In 2004, when I was a young candidate just starting out in this politics game, I visited Knockando Woolmill in Moray which, at the time, was an entry in the BBC's “Restoration” series.
The place is steeped in over 200 years of history, but it was in a poor state of repair and was struggling to survive. However, it reopened in 2014 and now Knockando has a history and a future, which was saved by those who worked hard and who recognise the importance of our rural past.
Other social enterprises have grown to become indispensable parts of their communities through promoting mental health, tackling addiction and giving ex-offenders a second chance. Last summer, I visited Orkney Blide Trust and learned about its fantastic work to support people by providing opportunities in its catering and gardening social enterprises. As a member of the Economy, Jobs and Fair Work Committee, I had the opportunity to explore some of the work of social enterprises during the committee’s recent inquiry into Scotland’s economic performance, which others have mentioned.
To get a better grasp of the status of social enterprises in Scotland, we need better information. The social enterprise census is a starting point, but much of the information about the performance of social enterprises is impossible to find. In many cases, the issues that surround social enterprises overlap with those for other small businesses. Many who might consider establishing a social enterprise feel that they do not have the skills and knowledge to do so. My party has tried to address that by outlining the need for the promotion of social enterprises and businesses generally within education, to inspire a new generation of entrepreneurs. We also know well the challenges that small businesses can face in accessing public sector procurement, which has been mentioned. We could look at the many successes where small businesses are supported in accessing public procurement, nationally and locally.
At its core, diversity in our economy is undoubtedly positive. Social enterprises in particular can adapt to local change. They can reflect local circumstances and priorities by being grounded in particular communities. They can even bring communities together, as local people become involved and their organisations become more visible. Many have led on ethical and environmentally sensitive business models.
It is positive that Scotland is a significant destination of interest for social enterprise and is bringing so many people from around the globe to engage in this year’s world forum. Even a quick glance at the programme shows that it is a truly international event, with plenty of opportunity for people to share experiences, network and discuss the next steps for their enterprises. I wish them every success for the week ahead.
It is a genuine pleasure to speak in the debate. I welcome Aileen Campbell to her new position and congratulate her on her appointment. I also pay tribute to Angela Constance for her work in her previous position. She has been a fantastic champion for equalities issues and I am sure that she will continue to be so on the back benches.
One of the great joys of debating social enterprises is that it is an opportunity to hear about the various social enterprises across Scotland. This debate is celebrating social enterprises from across the entire globe. It is a real honour for Scotland, and a well-earned one, that the world forum is coming home after 10 years. The statistics show that there will be 1,400 delegates from across the world, which is testament to the size and scale and the energy and dynamism of the global social enterprise movement.
Before I talk about that, I want to bring things a bit closer to home—to my constituency of Renfrewshire South, to be specific—and touch on a few of the fantastic social enterprises that operate there, as they give a fantastic example of the transformative impact that social enterprises can have in their communities. Take the Neilston Development Trust, which was established seven years ago, originally as a project to take ownership of a former bank, and which is now a thriving community cafe, where I am pleased to host my surgeries. Based in the cafe is also the Neilston & Uplawmoor First Responders, which is a group that I have spoken about previously in the Parliament. That is an excellent example of partnership working between social enterprises and other groups.
Also present in the Bank Cafe is a cycle repair initiative, which plays an invaluable role in promoting active travel in Neilston and the wider East Renfrewshire area. I have had the privilege of meeting some of the individuals who work there. Last year, I met an individual who had recently started a training programme and who was aiming for a City & Guilds qualification. He came from a difficult background—he had been in and out of the criminal justice system and had to an extent lost hope—but the opportunity to gain a set of skills, to work and to learn about cycle maintenance was absolutely transformative for him. It gave him a real sense of pride and ambition and, rather than think about the past and what might have been, he was talking about the future. That is just one small example of the incredible impact that social enterprises can have, not just on communities but on the individuals who work for those enterprises.
I cannot talk about Neilston Development Trust without mentioning the windfall that it received—and I use that term advisedly—from the sale of its stake in the Neilston wind farm, which generated £2 million for the trust. It now has a substantial sum of money at its disposal, and I have been pleased to have conversations with Neilston Development Trust, which I know will be looking to use that windfall to maximise opportunities for other groups, and indeed individuals, within Neilston and the wider area.
I also want to touch on Local Energy Action Plan, which is based in Lochwinnoch and also operates in Bridge of Weir, in my colleague Derek Mackay’s constituency. It does a range of excellent work promoting energy and environmental efficiencies. For example, it has a car club, it provides advice and support, and it is involved in food sustainability. I look forward to working with that organisation as we move into the winter months, to provide information and support to my constituents, to ensure that they can stay warm this winter, but in a way that does not break the piggy-bank.
I want to mention Active Communities, which is originally a Paisley-based organisation—I know that my colleague George Adam will speak later, so I am sure that we will hear plenty about Paisley-based organisations—but Active Communities also operates in Johnstone. I will highlight a project that it is involved in, which is to take over the former Johnstone police station. It has recently been awarded £10,000 from the Renfrewshire Council community empowerment fund, and I pay tribute to my SNP colleague Councillor Iain Nicolson, the leader of Renfrewshire Council, and to the administration for the energy and drive that they have shown in engaging with social enterprises and community groups across Renfrewshire and in my Renfrewshire South constituency.
Active Communities started 15 years ago as a jogging and walking group. It has now expanded into a range of other areas, with more than 700 people participating every single week, and the projects envisaged for what I hope will be the successful acquisition of the former Johnstone police station are really impressive. Those include setting up a men’s shed and providing a permanent base for Kairos, a new and inclusive women’s initiative that Active Communities is pioneering. Kairos is led and developed by local women, and provides drop-in sessions and personal development courses.
Before I conclude, I would like to pick up on a few remarks that were made by other members and in the Opposition amendments. Monica Lennon’s amendment, which referred to filling the gaps, made an important point. There is a gap to be filled as a consequence of austerity. Given the nature of the debate, I do not want to engage in political point scoring, but we face challenges that simply cannot be met by the state or by local government in these times, and social enterprises pay an invaluable role. Along with many other people in society, such as unpaid carers, they really are the unsung heroes, and many services simply could not be delivered without their effort and energy.
Patrick Harvie is not in the chamber at the moment, but I want to mention a point that he made, speaking to social enterprises as a model for the wider economy. He spoke of an economy driven by values, and that reflects something that Duncan Thorp from Social Enterprise Scotland stated in a recent blog. The fact that we struggle to define social enterprises has been a theme of this debate, but Duncan Thorp said:
“Ultimately it’s about building a new kind of economy, where everyone is included and where everyone can prosper ... We want to drive forward wealth creation, ethical business practices and fairer workplaces.”
At times, we debate wealth creation, fair work or ethical business practices as existing in silos and being independent and separate from each other, but in social enterprises we see them all working together and we see the benefit that they bring. Social enterprises will continue to deliver for our local communities and to provide a model for the kind of economy that we aspire to be in future.
I conclude by wishing all the delegates to the forum the very best for a successful week.
I begin by drawing members’ attention to my entry in the register of members’ interests. I am a company director of a business with retail interests in Edinburgh. That is why I am also very pleased to speak in the debate. In some ways, I want to follow on from the remarks that Tom Arthur has just made, because this is an opportunity to reflect not only on social enterprises themselves but on the changing face of business, and on the real role that social enterprise has played in that changing world.
I am an unapologetic child of the 1980s. When someone says “business” to me, even as someone who has worked in business, I cannot help but think of images of the film “Wall Street”—Gordon Gekko, red braces and business that is driven by asset stripping and profiteering from the job losses of downtrodden workers.
Indeed, there is much in business that is unpalatable, but I think that the situation has changed, and markedly so, in recent years. When I think about my working life—I started work just before the beginning of the millennium—I can see that we are no longer in a situation in which business sees social responsibility as something that it has to do and which is to be tucked away at the end of annual reports. Today, when I go to meetings of the Confederation of British Industry and other business organisations, I see that they recognise that diversity and social responsibility are core to what they do, and that their businesses are better because of that. It is not a coincidence that, over that period of time, we have begun to see social enterprises playing a hugely important role.
Some members have this afternoon discussed the need for a definition of social enterprise. It is difficult to give a definition of what a social enterprise is, because they are very diverse. However, at their core are three critical elements. The first is that they are unashamedly commercial—they seek to run a business and develop a profit. However, critically, that profit is reinvested along the lines of their wider social aims and core purposes. In that regard, I take issue slightly with what John Mason said: profit itself is not the problem; the issue is what that profit is used for. That is true not only for social enterprise but for wider private business as well, because good business reinvests its profit in its productive capacity and in its workers. That is critically important. That is the example that social enterprises can provide.
That is also why I am proud to be speaking in the debate from the Labour benches, because I think that there is a Labour case for business. We have a strong record in terms of creating social investment in Scotland, as my colleague Monica Lennon pointed out.
I believe fundamentally that, at its best, business creates opportunity. It creates work and jobs—jobs that are not merely about earning a wage but which empower the individual. Businesses that do that do so by supporting and including their workers. The change that we see in modern business is that businesses now recognise not only that that is a good thing to do for wider reasons, but that it makes their businesses more productive. As we move towards a knowledge economy, that becomes critically important. The only way in which a business can be a productive one in the knowledge economy is if it includes and empowers its workers and reinvests. The old model of asset-stripping, profiteering businesses that try to extract profit for private good is simply bust and belongs to the past. Gordon Gekko may not be gone, but we are in a period of change.
The one question that I would pose is whether we are right to treat social enterprise as such a different category of business. I think that what is of critical importance is that, as the Government looks at its policy of supporting social enterprise, it does so in an integrated way across its enterprise policy. I very much support the comments to that end that other members have made.
It would be entirely remiss of me to make this speech without mentioning social enterprises in my constituency. I would like to disagree with everyone who has so far spoken in the debate and say that it is Edinburgh Southern that is the true home of social enterprise in Scotland. I can give two examples of why. First, there is Dig In Bruntsfield in my constituency, which is a fantastic example of the community coming together in the face of the loss of a local independent business to create a community greengrocer. More than 200 people came together to form it at its first meeting, with 300 people now owning shares. It has been in existence for the past four years, and very successfully so.
Secondly, I highlight the work of the Bike Station. Before I do so, as an aside I note that the bicycle seems to be a fundamental part of an awful lot of social enterprises in Scotland, and a common thread between them. I do not know why that is; it might be something to examine. The Bike Station grew from an informal bike swap in Sciennes primary school in my constituency, recycling bikes and teaching bicycle maintenance. Its most recent balance-bike project has delivered more than 100 bikes to nurseries across Lothian, thereby ensuring that young children learn early habits that are vital in terms of their health and fitness.
What those social enterprises have in common is the fact that they invest back into their wider aims in a way that is conscious of the wider benefits for the wider community. As I said earlier, that point is vital in relation to social enterprises.
While it is hugely important that the world forum is happening in Edinburgh—it is of huge benefit when Scotland hosts discussions, whether they are about social enterprise or other initiatives—we must look to the future of social enterprise and ensure that it is not just a sticking plaster for other services in our community, as is referred to in the Labour amendment. It should also be properly supported in the broader context of our enterprise strategy, as is set out in the Tory amendment. I will support both amendments this evening.
This is a perfect opportunity to celebrate the progress that we have made in the past 10 years, and to acknowledge all that Scotland is doing to promote social enterprise—not just at home but globally. It is also an opportunity for me to draw attention to the excellent work that is going on in my constituency and the wider Renfrewshire community. I say “wider Renfrewshire community”, but I really just mean Paisley.
It is phenomenal that Scotland is recognised as a world leader in the facilitation and promotion of social enterprise, but it is important to look past that global praise and to examine the great work going on in all of our constituencies. Last week, during the programme for government debate, I stressed that dignity and respect, and the drive to put people first, are at the heart of everything that the Government is doing. We should draw attention to and support our local social enterprises, which can make a real difference and effect positive change in our communities.
Unlike traditional businesses, which focus on making profits for shareholders, the social enterprise model uses business practices to achieve socially positive goals. That could be anything from delivering youth activities to running a community hall. I have seen the success of that first hand in my constituency and know that, for many people, the benefits can be life changing. In Paisley alone, the social enterprise model benefits thousands in the community.
There are plenty of excellent organisations that I could name as testament to Scotland’s success as a social enterprise advocate, so I wondered which I would mention first. While listening to John Mason, I remembered that I could start with one that I am involved with, which is the St Mirren Independent Supporters Association—a not-for-profit community trust, of which I am convener. The trust now owns 28 per cent of the stock of St Mirren Football Club. Working with Gordon Scott, our target is to have a majority share of the club in eight years.
An important debate in our community, and in our national sport in general, is about who ends up owning football clubs, at the end of the day. We were a not-for-profit trust negotiating with an organisation that was full of business people who thought purely on a business basis. That was difficult for us to overcome. Now, luckily, 1,300 St Mirren supporters and Paisley buddies put in between £12 and £25 a month and have all bought into that long-term goal.
In football, managers may come and go—they have been coming and going at St Mirren park quite a lot recently—and star players may shine brightly for a while, but it is the fans and the community at a club that will always be with the team. In the same way that there is no right or wrong way to ensure fan ownership of Scotland’s football teams, there is no right or wrong way for a social enterprise to go forward, as long as it sticks by its ideals and what it wants to achieve. It is an idea—and an ideal—whose time has come.
Another example from my constituency is the massive cathedral-like Thomas Coats memorial Baptist church, which was built by the Coatses, who were a cotton-baron family. The church is now closed because churchgoers could no longer sustain a building of that size. A trust is being set up, of which I have said I will be a member, in order to secure a sustainable future for the building. That is how social enterprises make a difference in our communities.
The Star Project in Paisley is an award-winning organisation that has been delivering sustainable and positive social outcomes since opening its doors in 1999. It employs a person-centred approach to deliver group and individual support plans, and it works constantly with local and national strategies to build safer, more connected and more resilient families and communities. I visited the Star Project last year, spoke to constituents and saw for myself what the programme does and what it means to people. Organisations such as it go a long way towards tackling inequalities by helping people with everything from battling loneliness to applying for benefits. Above all, the Star Project equips people with the connections and confidence to thrive, which in turn encourages growth throughout the community.
With that in mind, it is clear that social enterprises can directly help to address the underlying causes of poverty and inequality in our communities, and ensure that everyone can live in a fairer, healthier and happier country in which all people are valued and able to achieve their potential.
Forty-five per cent of social enterprises have stated that one of their main objectives is to create employment opportunities by helping to unlock the full potential of people who are furthest from the labour market. Social enterprises not only connect people with their communities but help to harness productive capacity and, therefore, to strengthen long-term economic performance.
Another excellent example of a social enterprise in my constituency is the Loud ‘n’ Proud organisation, which is run by Tommy McGrory. Loud ‘n’ Proud has been reigniting Paisley’s passion for music for more than 10 years and, during that time, it has helped countless students to access and achieve success in the music industry, while making a huge contribution to the regeneration of Paisley as a whole. Its main goal is to educate, train and prepare students for a career in either music or music technology and, at the same time, to give others the ability simply to play and enjoy music.
It has been proved time and again how successful music is at connecting people from the far corners of our communities but, too often, young people face barriers and roadblocks to their dreams and aspirations. Loud ‘n’ Proud has been knocking down those barriers since it began, and the results have been tenfold. Although enjoyment is at the heart of what Loud ‘n’ Proud does, Tommy McGrory focuses equally on the knowledge and self-discipline that he can pass on to his young students and which are needed for excellence in the music business. Timekeeping, preparation, relying on others, being relied on and working as a team are all valuable skills in that industry.
Social enterprise is the way forward. We must do all that we can to remain at the forefront of global development in that area and to remain committed to funding and supporting local organisations. They can really change people’s lives, and reshape and regenerate whole communities in the process.
Like other members, I welcome this debate and I welcome the forum delegates to Edinburgh.
As we have heard, social enterprise is good for the Scottish economy. It makes a £2 billion contribution to it, which we should welcome and appreciate, yet social enterprises often have their roots in small projects. Forty-three per cent of social enterprises have an income of less than £50,000, the sector employs 40,000 full-time equivalent staff across the whole country and, as we have heard, 61 per cent of social enterprises are run by women, which is a far higher percentage than in any other sector.
As we heard from previous speakers, as well as the fact that a high proportion of social enterprises are run by women, many of them try to engage with those who are seeking to get back into employment and are struggling to do that, including older people, disabled people and people from ethnic minorities and other categories in our society. We should welcome and encourage that. There is a challenge in doing it. Over the past couple of hours, we have heard heart-warming stories about good social enterprises in different communities and how they have been successful, attracted employment and gone from strength to strength.
Being the final speaker in the open debate, may I be Mr Pessimistic? The one social enterprise that I was involved in—through a charity that I used to be involved in—went belly up after six months. The reason was not that it did not have a good model or good leadership—obviously, because I was part of it. The problem was that there was a tension between attracting into employment people who are difficult to place and, at the same time, making enough money to keep the social enterprise going.
Willie Rennie made the helpful observation that there are lots of social enterprises that are actually or nearly running at a loss. There is a challenge for those who seek to set up social enterprises. We want to encourage into the workplace people who have not had that opportunity through the public or private sectors, but how do we get those people into employment and give them training while, at the same time, having a model that will work and be sustainable?
We have heard today about many social enterprises that have had success. I hope that, this week in Edinburgh, we will hear of good practice and schemes that have worked, so that people can learn from that, see where the mistakes have been made and then move on from them.
As has been mentioned, there is a role for the Governments both here in Scotland and at Westminster and for our local authorities. I am delighted that we have the city region deal for Edinburgh and the south-east of Scotland, which is going to bring millions of pounds into the economy. We are going to see innovation hubs start in some of our universities and we are going to see the arts in Edinburgh benefit because of local and national Government coming together.
However, there needs to be a role for social enterprise in all of that. We need to make sure that we do not leave behind the more difficult communities in Lothian, the Borders and Fife. I think that social enterprise can be used, with Government and local authority targeted funding, to help those who are struggling to get into employment—particularly those with disabilities—and give them experience so that they can learn from it.
This has been a helpful debate and an encouraging one, but there are lessons to learn and challenges ahead. I, too, wish well all those who are meeting in the capital this week. I hope that the lessons that they learn will be fed down to all organisations across Scotland.
I am pleased that all members who spoke in the debate are present for the closing speeches, apart from those who requested and have been granted leave not to be in the chamber. That is a big plus for today. It has made my day.
We move on to the closing speeches, and I call Alex Rowley to close for Labour. You have six minutes, Mr Rowley.
I am pleased to close for Labour. I, too, extend a welcome to the Social Enterprise World Forum as it comes to Scotland this year. I also wish the cabinet secretary the very best in her new role.
As James Kelly said, Scotland is an excellent choice to host the gathering, as we have an array of world-class social enterprises operating throughout the country, including in my home area of Fife. Fife Social Enterprise Network was the first local social enterprise network to start up. The first meeting took place in 2004 at Furniture Plus in Dysart, and the network continues to hold regular meetings. More than 160 social enterprises are in operation across Fife and they have a total income in excess of £26 million. In Clackmannanshire and Stirling and across Mid Scotland and Fife, social enterprises play an important role in our daily life. Willie Rennie and Bruce Crawford highlighted some of them.
As the motion notes and the cabinet secretary said, the inaugural social enterprise world forum event took place in Edinburgh 10 years ago, so it is only fitting that the 10th anniversary of the event, which brings together delegates from all over the world, returns it to Scotland.
Social Enterprise Scotland stated:
“The purpose of the World Forum is for social enterprise leaders, practitioners and supporters from all over the world to come together to share knowledge, build networks and discuss practical ways to build a more sustainable economy.”
The event comes at a time when more people are realising that the current way in which our economy and society work is not fair and is not set up to deliver in the interests of the many. Therefore, we should certainly welcome and celebrate the gathering and encourage more such gatherings, especially given that social enterprises play such a vital role in our communities and significantly contribute to our economy as a whole.
I want to add to what Monica Lennon said and focus on the social good of many local social enterprises that work at the community level to provide many high-quality social services, from care for the elderly and transport to supporting people into employment. They are often the last line of defence against deep-rooted poverty and deprivation, which exist in far too many communities across Scotland. In focusing on that area of work, I have to say that many organisations have felt the impact of failed austerity and cuts to public services, and there has been a missed opportunity to grow the sector. John Mason touched on that.
Community planning partnerships were meant to work in such a way that they brought together all the key players and focused all the resources on achieving the outcomes that the partnerships set. Much more needs to be done to ensure that social enterprises are able to be effective and reach into communities, so that the strategic policy objectives of Government are achieved.
On top of their economic and social importance, many social enterprises are leading the way in creating progressive, fair and equal workplaces of the kind that we need to see more of in Scotland. Patrick Harvie highlighted that. Seventy per cent of Scotland’s social enterprises are led by and accountable to people in their local communities, 64 per cent are led by women, and 72 per cent pay all employees the real living wage. They also have a smaller wage gap between the highest and the lowest paid in their organisations. Many of our large organisations in the private and public sectors could learn from that.
At times, it can be difficult to define what a social enterprise is, but, at its core, it is a more ethical, dynamic and independent way to do business. As Daniel Johnson pointed out, a social enterprise is a business with social objectives whose surpluses are reinvested for those purposes either in the business or in the community, rather than one that is driven to maximise returns for shareholders or owners. A number of members have highlighted that such organisations have an important role to play, especially in the current climate of ideologically driven austerity. It is fortunate that there are organisations out there that are trying their best to mitigate some of the worst effects of the rise in austerity that we have seen over the past few years.
Dean Lockhart talked about the need for more investment, but that contradicts his and the Scottish Tories’ support for austerity. The Tory party’s zealous austerity agenda, which continues to chip away at our public services and their ability to invest in areas such as social enterprise, needs a rethink.
Tom Arthur said that he did not want to make this about politics. However, when we are debating the importance of social enterprise, it is crucial to highlight the negative impact of failed Tory austerity, as we will not create a better society while promoting inequality through austerity and we will not grow a dynamic, community-led social enterprise approach against a backdrop of deep cuts.
All members have recognised the massive potential of growing the social enterprise sector of our economy. We need to follow that up with resources and investment, and that means an end to austerity and recognition of the need for investment in growth right across Scotland.
I join my colleagues from across the chamber in welcoming the Social Enterprise World Forum back to Scotland, and congratulate all those involved in organising and delivering the event.
As we have heard, the forum enables social enterprises from across the world to share wisdom, build networks and explore how to create a more sustainable future. There is no doubt that the opportunity to share stories of success and failure can be one of the most important things in progressing a business. Discussing the challenges that it has faced, and the support and the skills that might have moved it forward, or did move it forward, are essential for its learning.
Today’s debate has given us the opportunity to share our own stories of the fantastic social enterprises around Scotland, from Bruce Crawford’s detailed description of Callander, which is Scotland’s first social enterprise town, to Gordon Lindhurst’s quoting of Jonny Kinross from the Grassmarket Community Project.
I had the privilege of working with Jonny 10 years ago when I was involved in setting up and running a social enterprise and a charity. I know that his commitment to social enterprise is second to none. Therefore, his words about the impact that social enterprises have not only on the community to which they deliver but on the people who work for them sit comfortably with me. He is absolutely right. It is incredibly meaningful to people when they can get involved.
As Monica Lennon highlighted, social enterprise came about as a recognition that there were organisations that used the power of business to bring about social and environmental change. She also highlighted how social enterprises have a strong history of responding to social challenges. That is exactly what they have been doing.
Over the past 20 or 30 years, we have recognised the massive growth of organisations that identify as social enterprises. I very much welcomed hearing from the cabinet secretary about the support that the Scottish Government currently gives and intends to give to social enterprise. The debate is not just about whether we need them—and I am sad about the move to politicise the debate. It is also about whether we want them and, if we want them, how we want to organise and control them, whether they need to be regulated and how much support they need. We have seen in their operation the potential to create an increased sense of community belonging, as well as the provision of better access to services for those who are often marginalised in their community.
John Mason spoke very eloquently about the different models of organisations that have been and are around. Whether they are co-ops, social enterprises or extremely well-run businesses, they all play their part in supporting community benefit. He talked about the challenge of creating a better community and the need to upstream money for preventative work, which is very difficult to do. Social enterprises offer us a real opportunity to facilitate that move, which the Scottish Government originally spoke about 10 years ago—I know that, because I gave evidence to it on the topic—and which most of us across the chamber want to see. If we can upstream the funding and the operations that come with a mixed economy, that would be something that all parties could celebrate.
Social enterprises are a vital part of democracy, and Governments around the globe are coming to recognise their value. It is good to see Scotland at the forefront of their development. I think that we can, as the cabinet secretary said, be rightly pleased that we have a leading place in the development of social enterprises. However, they are businesses and they require the skills and the approaches that will ensure their sustainability. If we do not recognise that, we will get increased failure, with people coming in thinking that it is an easy way to operate and earn a living. It is not; it is hard. I know, because I have done it and I am still doing it.
As Willie Rennie identified, 41 per cent of social enterprises returned a loss in the past year. If sustainability is our watchword, that should raise alarm bells.
Quite a lot of members talked about the definition of “social enterprise”. That is important, but I agree with Daniel Johnson and other members who said that we should be careful in defining what a social enterprise is, because good businesses contribute to our social welfare and we do not want to constrain entrepreneurs and opportunity by creating too strict a process in that regard.
Having said that, I think that we need be able to identify social enterprises well enough to be able to ensure that they are sustainable, as a number of members said. Gordon Lindhurst talked about the need for a flexible and holistic Scottish model of impact measurement. We absolutely should think about that, because such a model would help us to understand what is happening, so that we can direct our support appropriately and ensure that enterprises are sustainable.
Each and every one of us can make a contribution. I echo Dean Lockhart, who said that the Scottish Government must take seriously its role to provide a clear and structured framework for social enterprise, to give more certainty to the sector. Social enterprises need business support, and we must get that to them.
I know that the Presiding Officer is going to ask me to close, so I will quickly mention a couple of enterprises in my area, with which I was very impressed when I visited them. You Can Cook in Peeblesshire has established an official partnership with the University of Edinburgh business school to promote an eat-healthy, live-healthy lifestyle and to promote social enterprise to students and graduates, with the aim of inspiring more students to get involved with social enterprise projects. That is the kind of thing that we need to look for.
As Jamie Halcro Johnston said, in many cases local people are able to see the benefits of well-run social enterprises quickly, as they are reinvested back into community projects.
I thank everyone who is involved in the forum.
We will support the Government motion, but I am sad to say that we will not support Labour’s amendment, because Labour has politicised the language. Social enterprise is not a political issue; it is a community-benefit issue, in which we are all involved.
It has been a pleasure to take part in today’s debate and to hear members describe with pride the social enterprises in their constituencies and regions. Their stories have given a flavour of the variety and scale of the work that is going on in villages, towns and cities the length and breadth of Scotland. I look forward to going to Callander this evening with Bruce Crawford.
Common to all the stories that we have heard is that Scotland’s social entrepreneurs are driven by a passion to improve the communities in which they live. What is also strong is the—largely—united front of the Scottish Parliament today, as all parties have come together to celebrate the achievements of Scotland’s social enterprises and the global lead that Scotland is taking.
That positivity is important, as Scotland welcomes the world to the social enterprise world forum. Global representatives of the Social Enterprise Academy are here in the chamber today, and I understand that pupils from Broughton high school visited Parliament today. It is important that our visitors hear that it is not just this Government that endeavours to support social enterprises. There is a collective endeavour that is not owned by one political party. There is a united Scottish approach that is not complacent and which seeks to grow and to transform the approach that other businesses take, as, I think, Daniel Johnson said.
Members made constructive, insightful and considered speeches, in which they sought not just to congratulate Scotland on what we have achieved but to think about what is next for Scotland and social enterprise. What more can we do, as a society, to rebalance our economy and create the fairness and inclusive growth that we all want? Therefore, although we are in agreement on the issue, the debate has not been without challenge.
It is difficult to single out a particular speech. I valued the words of Patrick Harvie, who took a nostalgic tour of his life growing up with a mother who was very active. I can certainly relate to that. He mentioned Greenlight Recycling; the partnership action for continuing employment team is working there to provide help and support, and can provide more information.
For me, Patrick Harvie summed up social enterprise when he described its valuable resource as being the creativity and talents of people, who are part of an economy that is driven by values. That approach and emphasis were underlined and reiterated by Tom Arthur, James Kelly and Monica Lennon. They show a potentially superior basis for an economy that is motivated by ethical practice and localism.
Given what our communities stand to gain by looking at inclusive economic growth through the prism of social enterprise, it is absolutely right that members ask the Government what more we can do, so I will respond to some of the issues that have been raised. Dean Lockhart mentioned the need to declutter the landscape. We are developing a map of the social enterprise ecosystem in order that we can simplify that landscape. The new south of Scotland enterprise agency is also looking to Highlands and Islands Enterprise as a model approach to supporting social enterprise. There is a knowledge and exchange programme between Scottish Enterprise and Just Enterprise, which is relevant to issues that were raised by other members who contributed to the debate.
Dean Lockhart and Gordon Lindhurst mentioned public procurement issues. We are funding partnership for procurement to provide free tender-writing support and to encourage that work to ensure that more people can access such opportunities. We can furnish those members with more information on that.
Patrick Harvie and Willie Rennie also spoke about the challenge that many social enterprises face in trying to make ends meet. That point was also made by Jeremy Balfour, to whom I say that he was not being pessimistic; it is an absolutely legitimate point to have made. Just Enterprise gives free advice and has a business recovery service. We stress that any social enterprise that is feeling the pinch should contact it as early as possible. We are always looking to see whether such schemes can be improved and what other support might be offered.
James Kelly and Monica Lennon mentioned co-operatives. The Scottish Government funds Co-operative Development Scotland to promote such models, and I absolutely agree that they should be viewed as part of a wider movement in our attempt to rebalance the economy. When I was growing up, my dad was part of East of Scotland Farmers Ltd, which was a co-operative, so I know how important it is for that part of the world, in Strathmore.
Finally, several members mentioned the matter of a definition. Again, I point to the voluntary code of practice for social enterprises in Scotland as being the benchmark criteria and values for any social enterprise that is establishing itself here.
I want to conclude by bringing together the reasons for our valuing our social enterprises. Alex Rowley rightly spoke passionately about the need to create a fairer economy that benefits us all, inclusively. That is about empowering our communities and recognising that when we allow them the chance to take charge and to reimagine what life could be like, special things happen. Social enterprises probably have a reach that the Scottish Government, local government and our health services just do not have. They are nimble and agile, and they respond to community need, which we need to acknowledge. Alex Rowley was right to bring community planning partnerships into the debate, because we need much greater recognition of what social enterprises can do at that level.
I want to underline that the reason why we are gathered here today is to welcome the world forum: we sincerely want to welcome the world to Scotland. On behalf of us all, I say that we should ensure that the next 10 years of social enterprise development here are equally exciting and help more community organisations across the country to develop the work that they want to do in response to community need, and in the challenges that they face. Together, all our social enterprises bring variety and diversity to our communities. We can all work to support them in creating the fairer and more equal society that we all seek.