Meeting date: Thursday, February 9, 2017
Meeting of the Parliament 09 February 2017
Agenda: General Question Time, First Minister’s Question Time, Barnardo’s Scotland Nurture Week, Scotland’s Social Enterprise Strategy 2016-26, Decision Time
- General Question Time
- First Minister’s Question Time
- Barnardo’s Scotland Nurture Week
- Scotland’s Social Enterprise Strategy 2016-26
- Decision Time
Scotland’s Social Enterprise Strategy 2016-26
Good afternoon. The next item of business is a debate on motion S5M-03898, in the name of Angela Constance, on “Scotland’s Social Enterprise Strategy 2016-26”.14:30
It gives me great pleasure to recognise in the chamber the importance of Scotland’s social enterprise sector. That dynamic movement for change makes a significant contribution to achieving our aims of inclusive growth and tackling inequalities and helps our communities to flourish in a Scotland that is fairer for everyone.
Social enterprises, to put it simply, trade for the common good. Their leaders constantly seek out ways to improve the world around them. Bill Drayton, an American social entrepreneur and founder of Ashoka, said:
“Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry.”
Closer to home, our social enterprise leaders subscribe to the same ethos. They strive to create good in all that they do, all the while delivering outstanding products and services. Whether it is the Shetland Soap Company or Ginerosity gin, the power of social enterprise is its ability to do business in a more inclusive way. The promise of social enterprise is to deliver a real paradigm shift in the way that our economy is structured.
Social enterprises are good for our communities of interest and place. They operate in urban and rural environments. Critically, they are good for our economy and contribute £1.68 billion gross value added annually. With 60 per cent of social enterprises being led by women, they are also beacons of fairer workplaces and ethical business practices.
I will reflect on the progress that the social enterprise sector has made, outline our ambitions for the next decade as set out in the co-produced “Scotland’s Social Enterprise Strategy 2016-26” and look ahead to the delivery of the first underpinning action plan in March.
Scotland has a long tradition of socially responsible business, from Robert Owen at New Lanark in the 19th century to the development of the co-operative and community business movement in the 1970s. Over the past decade, the Government has continued to champion social enterprise and build a world-leading ecosystem of support. From the publication of the “Enterprising Third Sector Action Plan 2008-2011” to the first ever social enterprise world forum in 2008 in Edinburgh, we are proud of all that has been achieved. Scotland has built a solid reputation as the best place in the world to be a social enterprise and has attracted incoming study visits from the Irish social enterprise task force, the Canadian federal Government and policy makers and social entrepreneurs from across Africa and Asia.
Whether small or large, expanding or collaborating, Scotland’s social enterprises make a huge contribution to a wide variety of important areas of social policy from the local, such as supporting community empowerment and the rural economy, to the national, such as helping our economy to be more innovative and inclusive and supporting social innovation in public service redesign and delivery.
Our social enterprises also have an increasingly global footprint, demonstrating that Scotland is a forward-thinking and open nation. Later this evening, I will have the pleasure of opening an exhibition organised by the International Network of Street Papers, one such international social enterprise, which is headquartered in Glasgow. I look forward to hearing more about the work that it does to support street papers, including The Big Issue, and tackle homelessness globally.
In November, I was humbled to present the social enterprise of the year award to Homes for Good—yet another social enterprise that is based in Glasgow—which is revolutionising the private rented sector.
Another award winner, Freedom Bakery, is now expanding its operations not only to train those in HM Prison Low Moss in artisan bakery, but also to give new opportunities to people with convictions—building their skills and breaking the cycle of offending.
Social enterprises flourish right across Scotland. James Dunbar of New Start Highland, twice winner of the Institute of Directors’ director of the year award, is tackling poverty, providing employment and contributing to the circular economy right across the Highlands. In Argyll and Bute, Kintyre Recycling supplies re-use services right across the Kintyre peninsula, with specific employment opportunities for people with learning disabilities. Those are just a few of the many examples across Scotland.
Although it is clear that there is much success to celebrate, we will not rest on our laurels because we see the potential for so much more. Scotland is a world leader in the holistic support that it provides to social enterprise. That is why, in 2016, we launched two ambitious social enterprise strategies to set the framework for further development over the next decade.
The strategies were fully co-produced with an engaged and vibrant social enterprise sector, and in partnership with our enterprise agencies. I want to personally thank the many people who contributed to the development of those important publications. “Internationalising Social Enterprise - A Strategy for Scotland” was launched in September, and in December we published “Scotland’s Social Enterprise Strategy 2016-2026”, which is Scotland’s first long-term framework for developing social enterprise.
The national strategy sets a clear vision for where we see social enterprise in Scotland in ten years’ time. We share the social enterprise movement’s vision of social enterprises becoming the norm and visible in all aspects of life. We see Scotland’s social enterprises becoming widely known for their high-quality and sustainable services, which reduce inequality, lift people out of poverty and encourage more empowered and resilient communities. We see the movement growing and influencing from the most deprived urban communities to the most remote rural areas.
We will continue to build on our world leading reputation and we will share our expertise, reinforcing our reputation as the go-to destination for learning about how to start, grow and support a social enterprise.
Scotland’s social enterprise strategy provides a framework for action around three key priorities: stimulating social enterprise, developing stronger organisations and realising market opportunity. Those priorities, which were endorsed by the Convention of Scottish Local Authorities, will be key to driving forward action both locally and nationally.
As the saying goes, you should begin as you mean to go on. Having evidenced the power of co-production in the formulation of the strategy, we are now working with the social enterprise sector and public sector partners on developing the first of three action plans for 2017 to 2020. Delivering over three-year periods leaves us room to be agile in our response, adapt to the changes that inevitably lie ahead and also builds in key points at which we can take stock and learn from what has been achieved so far.
In the first phase of action we will drive forward change, test ways to increase the profile of social enterprise and set the foundations for exploring new long-term approaches. We are already engaging on the contents of the first action plan with leaders from across the social enterprise sector. I welcome any contributions or input my parliamentary colleagues may have today, or in the weeks and months ahead.
I am very interested to hear about the three-year action plan. Can the cabinet secretary update members on when the action plan will be published?
Yes. The action plan is due to be published in the spring—March—and we are on course to meet that date.
In order to demonstrate the Scottish Government’s real and on-going commitment to the dynamic social enterprise movement, we are delivering some early actions in support of the strategy, in critical areas including business and procurement support, social finance and collaboration.
Today, I am delighted to announce a new package of early interventions, worth more than £900,000 this financial year. That builds on the recent expansion by £140,000 of the social entrepreneurs fund, which I announced at the launch of the strategy in December. That means that more than £1 million is already being invested to lay the groundwork for the implementation of the first action plan.
The interventions include: starting up Scotland’s first social impact hubs—one rural and one urban—which are a recognised international model for facilitating collaboration; strengthening business and leadership support for our community enterprises and development trusts; investing in Scotland’s only accelerator programme for early-stage social enterprises, which is a proven pipeline for cutting-edge organisations such as Breadshare and Homes for Good, in partnership with the Big Lottery Fund; delivering the second social enterprise census as part of our on-going commitment to understand the scale, reach and contribution of the sector across Scotland; setting up a partnership and procurement hub to improve the sector’s ability to collaborate and tender for contracts; investing in work to build on the success of the Asda social enterprise supplier development academy and give social enterprises more opportunities to reach new marketplaces; and scaling up the social enterprise in education programme, which provides social enterprise learning across a range of schools in the Highlands and Islands and southern Scotland.
I am delighted that, once again, the eyes of the world will be on Scotland, as we have the opportunity to showcase our vibrant social enterprise sector to the rest of the world when the social enterprise world forum returns to Edinburgh in 2018, 10 years after the first ever world forum was held here.
I firmly believe that social enterprise holds incredible power and provides a vehicle to address many of the tough issues that we face, and I hope that colleagues share that belief and my enthusiasm. I believe that there is strong cross-party support for social enterprise in the Parliament. I am sure that members can—as I can—think of social enterprises that carry out excellent work in their constituencies and regions. In my constituency, I can think of many such organisations, including the Almond Valley Heritage Trust and the Kirknewton Community Development Trust.
As we debate the motion, I ask all members to reflect on the social enterprises in their communities and to highlight their unique contributions. I invite members to unite to support local social enterprises by raising awareness of the strategy and its forthcoming action plans. I believe that, together, we can help each social enterprise in Scotland to reach its potential and make its own vital contribution to our country and our communities.
That the Parliament values the work of Scotland’s social enterprises to reduce disadvantage and inequality through their work with communities and individuals; acknowledges the excellent partnership-working of organisations across the public and third sectors to deliver Scotland’s world-leading support for the social enterprise sector; recognises the work of the many committed individuals who embrace this more inclusive way of doing business and who work together to find new avenues towards social improvement; notes the ambitions of the Scottish Government and social enterprise sector over the next 10 years, as set out in Scotland’s Social Enterprise Strategy 2016-26, which focuses on the three priorities of stimulating the sector, developing stronger organisations and realising market opportunities; supports the Scottish Government’s commitment to the internationalisation of the social enterprise sector, and looks forward to 2018, when Edinburgh will again host the international Social Enterprise World Forum, marking 10 years since the inaugural event in Scotland.14:42
We welcome this debate on social enterprise and the Scottish Government’s social enterprise strategy. I begin by recognising the great historical contributions that social entrepreneurs have made to Scotland across many centuries, which the cabinet secretary highlighted. From Robert Owen in the 1800s to the co-operative movement and the housing associations and credit unions of the 1900s, up to the present day, when Social Bite attracts global attention, Scotland has been at the forefront of social enterprise. It is therefore fitting, as the cabinet secretary said, that we will again host the international social enterprise world forum next year.
Social enterprises are becoming increasingly important in Scotland’s changing economy, because they play a unique role in economic, social and community development. At the same time as enabling individuals and communities to work towards regenerating their neighbourhoods or providing a much-needed local service, social enterprises help to drive up employment rates and productivity levels, as well as contributing to exports.
According to the social enterprise census, there are more than 5,000 social enterprises in Scotland, which employ more than 110,000 people. The sector is female led—more than 60 per cent of social enterprises are led by a woman. The census provides an encouraging picture of the current status of social enterprise, and I congratulate everyone who is involved in social enterprise on making it such a success. The debate is about how we can build on that success.
In taking forward policy, we should keep in mind some overriding considerations. First, a social enterprise, just like any other business, exists to make profits. Without making profits, social enterprises cannot meet their social and environmental objectives. Although there is debate about the exact definition of social enterprise, the description that Social Enterprise Scotland uses encapsulates its essence. It has said:
“Social enterprise is a dynamic, ethical and more sustainable way of doing business. Social enterprises are innovative, independent businesses. They exist to deliver a specific social and/or environmental mission.”
I think that everyone would acknowledge that that reflects the true meaning of social enterprise.
We need to recognise that social enterprises respond to changing social trends as well as new trends in business and technology. Those changing dynamics should be reflected in policy making. We welcome the Government’s social enterprise policy paper, which focuses on three priorities: stimulating the social enterprise sector, developing stronger organisations and realising market opportunities. We also welcome the fact that the approach is long term. The strategy is for 10 years and will be accompanied by a series of three-year action plans that will set out evolving commitments and initiatives.
Even though the paper is 52 pages long, it does not really have much in the way of specific policies or measures. In the spirit of co-operation, I will suggest some policies and measures for the cabinet secretary to add to the three-year action plans, which we would very much welcome being involved in.
We need to simplify the system of financial and business support for the development of social enterprise. Currently, there is a cluttered landscape. Grants, project funding and other finance are available from a long list of agencies, with different objectives and outcomes attached to the funding streams. That is to some extent hindering the sector’s development.
We also need to address grant dependency. Evidence that was given to the Economy, Energy and Tourism Committee last year highlighted the problem of social enterprises sometimes relying on a continuous stream of grant funding. We need to promote more sustainable forms of finance for the sector.
Does the member agree that the co-operative model is not grant reliant and is very good at ensuring that there is both a social element and a strong practical focus on delivery?
I agree. I think that Johann Lamont was at the Economy, Energy and Tourism Committee meeting in which grant dependency was discussed and that she made that very good point in that session. However, grant dependency is an issue in some areas of the sector.
In addition to financial assistance, social enterprise needs business support. It is often difficult for emerging social enterprises to get help with business planning, setting up an office or hiring staff, but those issues often make the difference between success and failure.
To address those issues, the action plans for social enterprise that the cabinet secretary referred to should be co-ordinated with phase 2 of the enterprise and skills review that the Cabinet Secretary for Economy, Jobs and Fair Work is undertaking. That will ensure that future policies for small and medium-sized enterprise development across the private and social enterprise sectors are aligned and that business support is better co-ordinated across agencies.
We agree that social enterprise needs to be promoted at different stages of the education journey, including in schools. Promoting social enterprise in schools can encourage school leavers to consider establishing their own business. I know that many schools run social enterprise projects to encourage schoolchildren to get involved in such activity.
“Scotland's Social Enterprise Strategy 2016-26” does not recognise that many social enterprises have been established on the basis of the vocational skills of their founders, such as builders, tradesmen and women with vocational skills. The reduction of 152,000 in college places will make it difficult to replicate some of those social enterprises in the future. It might also negatively impact on the number of women who have the relevant vocational skills. We encourage the Government to consider reintroducing some of those important college places.
Another priority is to increase the presence of social enterprises on our high streets to make them more visible. The various city region deals provide an ideal opportunity to incorporate social enterprise into the expansion of city, town and rural developments. We encourage the Government to make that approach part of the action plans.
The Government’s strategy paper highlights the need to develop stronger networks and organisations. It is interesting that the census highlighted that 20 per cent of social enterprises are based in the Highlands and Islands. That is no coincidence, given the social development remit of Highlands and Islands Enterprise. To reflect that success, we again call on the Government to keep the board of HIE independent. Likewise, on the proposal to introduce a south of Scotland enterprise body with a social enterprise remit that is similar to that of HIE, we call for the creation of a specific and independent board for that body with local expertise.
As our amendment highlights, public procurement policy could be used more effectively to promote social enterprise. For many small and medium-sized businesses, the key to a breakthrough is often to get the first project on the board. The public sector in Scotland spends about £11 billion a year buying goods, services and works, so it can help and do more with social enterprise. As a result of recent changes to European Union procurement laws, we now have the legal framework to fundamentally change the way in which the public sector engages with social enterprise. We look forward to hearing more about that in the action plan.
The Scottish Government’s paper commits to a more flexible model of impact measurement, which we agree with. We look forward to seeing proposals on that because, in the past, it has not always been possible to measure success or to know what success might look like. We encourage the Government to introduce a transparent measurement framework that is cost-effective, accessible and independently verifiable and which is linked to an agreed social impact measurement. After all, the activity is not just about the financial impact but about the social impact.
I welcome the strategy paper as the first step in realising the full potential of social enterprise. However, as we have indicated, the Government’s strategy must be more specific and, if the potential is to be fully realised, policy will need to be co-ordinated across departments. We look forward to working with the Government to realise the full potential of the social enterprise sector.
I move amendment S5M-03898.2, to insert after “social improvement”:
“; acknowledges that the Scottish public sector now has the legal framework and, if it chooses to do so, can revolutionise the way it contracts goods and services from social enterprises; looks forward to the development of a robust, cost-effective, accessible and independently verifiable social impact measurement tool; recognises the preventative spend impact of social enterprises and notes that more work must be done to fully understand this in relation to the innovation of public sector services”.14:52
I am delighted to open the debate for the Labour Party and to move the amendment in my name. Many of us in the labour movement have a special affinity for social enterprise in general and the co-operative movement in particular. The Co-operative Party, of which I am a member, is an important and distinctive part of the labour movement, and this year it celebrates the centenary of its founding.
In the past, I have referred to social enterprise as a practical example of socialism at work, and that is what I want it to be. We should build our economy from the root up on the basis of production according to social need, not private profit, and of reinvesting surpluses instead of making dividend payments to absentee shareholders. That is about empowering local communities by holding resources and assets under local and, ideally, democratic control, with leadership by women as well as men and with a social, ethical and environmental purpose, to create socially useful work in place of desperate unemployment.
For us in the Labour Party, this is about building a moral economy that is underpinned by the principles of Robert Owen, who I note the cabinet secretary mentions in her foreword to the Government’s strategy document. She will know that Robert Owen wrote:
“There is but one mode by which man”—
“can possess in perpetuity all the happiness which his”—
“nature is capable of enjoying—that is by the union and co-operation of all for the benefit of each.”
I hope that the cabinet secretary will apply that political principle across her political considerations.
Talking about Robert Owen reminds me of the section in the strategy document that is headed “A Source of National Pride”, where we are told:
“social enterprise will come to be seen as central to the Scottish way of doing business—a natural extension of Scotland’s strong, fair and inclusive national identity.”
I gently remind the Scottish National Party that at the very time when Robert Owen—a Welshman whose early working life was in England—was establishing New Lanark as the new society, Scottish-run and Scottish-owned businesses were still operating Jamaican sugar plantations with slave labour from Africa. Let us have a bit less chauvinism and a bit more humility, and let us think big, not small and parochial, in the debate.
We will support the cabinet secretary and work with her Government in its quest to bring the strategy to fruition and stimulate the social enterprise sector in Scotland to develop stronger social economy organisations—and, where possible, to internationalise them, because fair trade should not be limited to what we import; it should be a goal of public policy in what we export, too.
However, when the Government says that it wants social enterprises to realise “market opportunities”, we cannot give it our unconditional support. If there is a market opportunity in which we find a mutual, social, co-operative or municipal solution that rescues Airdrie Savings Bank from threatened closure, we will welcome it. We would like the Scottish Government to search tirelessly for a solution that will rescue the country’s last remaining social enterprise savings bank, instead of throwing in the towel and sending in the partnership action for continuing employment team.
If and when there are market opportunities under the Community Empowerment (Scotland) Act 2015 for community and social ownership of assets, we will support such approaches. When there are opportunities under the land reform acts to transfer the ownership of estates from the aristocracy to the people, we will of course support that, too. If there are opportunities under forthcoming legislation to promote community ownership, including municipal and democratic ownership of renewable energy, the SNP will have our support on that, too.
Let me float another idea. We have land reform acts, with statutory rights that are underpinned by funding; the Parliament needs to consider whether we also need an industrial reform act—an extended Marcora law, which would bestow on workers and local communities, with Scottish Government financial support, a statutory right to bid for an industrial enterprise when it is put up for sale or faces takeover, closure or asset stripping. That way lies a route to mainstreaming community and employee ownership of the Scottish economy.
There is something else that we would like the Government to consider. There is a lot of talk about public sector markets and, in a continuing climate of financial austerity, we are concerned that some people see social enterprise taking the place of public enterprise. Social enterprises should not be used to undercut the terms and conditions of today’s local government workers. They should not be used to support the outsourcing of public services or to provide public service jobs on the cheap.
I have a final point to make to the cabinet secretary. A third of all social enterprises in Scotland are located in rural Scotland. In the Highlands and Islands, HIE has a close working relationship with 150 social enterprises. The social dimension and the social development remit of HIE and the Highlands and Islands Development Board before it have been critical to that growth. Some 22 per cent of Scotland’s social enterprises are in the fragile economies of the Highlands and Islands.
Perhaps, then, when the cabinet secretary sums up the debate, she will explain to the Parliament how centralising the board, budgets, decision making and leadership of HIE in Edinburgh and Glasgow will help rather than hinder the delivery of the social enterprise strategy. While she is at it, perhaps she will explain to the Parliament how cutting HIE’s operational budget by 22 per cent in real terms over the past five years and cutting it again in real terms in the next financial year will help rather than hinder the delivery of the social enterprise strategy. Finally, will she explain how cutting Scottish Enterprise’s operating budget by a third in the next financial year will extend the reach of Co-operative Development Scotland, which is part of Scottish Enterprise?
We call on the Parliament to support our amendment. Let us set clear targets and strict timetables, and let us get a plan together that is about rebuilding the mainstream economy, not plastering over the cracks left by austerity, and which is based on converting private rather than municipal enterprises into social enterprises. Let us use the legislative framework on land reform, energy ownership reform, meaningful community empowerment and industrial ownership reform to bring about transformative economic change that brings democracy to the economy.
I move amendment S5M-03898.1, to insert after “market opportunities”:
“; welcomes the role that social enterprise can play in rebuilding the economy and creating new forms of local ownership in energy, land and the mainstream economy; is concerned that cuts to local government and enterprise agency budgets may lead to pressure to reduce the level of support for social enterprise; believes that, in order to develop, effectively deliver and monitor the new social enterprise strategy, the Scottish Government should set clear targets, timescales, actions and resources for all aspects of the strategy and report regularly to the Parliament on how these are being met”.14:59
I welcome the debate on “Scotland’s Social Enterprise Strategy 2016-26”. I am enjoying it and I hope that the rest of the debate is as stimulating as the speeches that we have heard so far.
The strategy is a useful publication, which sets a clear path for social enterprises over the next decade. As the cabinet secretary acknowledged, such enterprises are of growing importance in contributing to Scotland’s economy. They are also part of a wider social economy, which, as the European Commission defines it, exists to make profits for people other than investors or owners.
The social economy includes co-operatives, mutual societies, non-profit associations, foundations and social enterprises. The social economy is a core part of Green politics and it is why our amendment reflects a broader analysis of the role that social enterprises can play in the economy.
Across the EU, there are 2 million social economy enterprises, representing 10 per cent of all businesses in the EU. More than 11 million people—about 6 per cent of employees in the EU—work for social economy enterprises; in addition, up to 160 million people across Europe are members of social economy enterprises, mostly in banking, retail and agricultural co-operatives.
In Germany, for example, it would be utterly unremarkable for me to bank with co-operative banks such as Volksbanken or Sparkassen owned by my local municipality. I might live in a local co-operative-owned house and work for a social enterprise providing transport or retail services. Indeed, German co-operative banks are an important part of the German economy, being significant lenders to the Mittelstand of small and medium-sized enterprises.
Greens see the social economy as a whole as vitally important in building a sustainable, prosperous and more equal society. As the social enterprise strategy highlights, social entrepreneurs are driving innovation and identifying business opportunities, particularly in areas where the public and the private sectors are not able to do so.
For example, in my own region of Lothian, 967 social enterprises work daily in communities. They include East Lothian Roots and Fruits, which works to tackle rising inequalities by delivering low-cost fresh fruit and vegetables and tinned foods to about 300 customers across 19 towns and villages. The enterprise, which celebrated its 20th anniversary this year, also operates as a health promotion project by encouraging people to get involved in local food co-ops and to take part in practical cookery and gardening workshops. In Midlothian, the furniture recycling project provides vital employment and volunteering opportunities while reducing landfill waste by recycling furniture and white goods to homes in the local community.
I am proud to represent a region that has the largest municipal bus company in the United Kingdom. Run under the auspices of Transport for Edinburgh, Lothian Buses and Trams is publicly owned by the City of Edinburgh Council, which has 91 per cent of shares in the business. The remaining 9 per cent of shares are held by the East Lothian, West Lothian and Midlothian local authorities.
The continued success of Lothian Buses is undoubtedly based on a simple premise that whatever profits are made are directly reinvested in the company. Last year, for example, that brought about an investment in 32 new environmentally friendly buses, which will reduce the company’s carbon footprint and improve air quality in Edinburgh.
Those are just two examples of social enterprises and one example of a municipal enterprise that are contributing to the social economy across Lothian. As previous speakers have noted, more than 200 years ago, Robert Owen—who is frequently cited as the father of social enterprise or of the co-operative movement—revolutionised workers’ rights from a small community that was centred around the New Lanark mill. As Richard Leonard observed, Owen was born in Newtown in Wales and today, Robert Owen Community Banking, in the county town of Powys, provides a community development finance institution that provides loans for social enterprises, energy efficiency and community energy schemes.
Here in Scotland, we have a long way to go to harness the full benefits of the social economy. Many of Scotland’s resources—its land, forests, energy and food—are owned and controlled by a very small number of private interests, and the scope to grow social enterprises and renewable energy in transport, forestry, tourism and agriculture is immense.
Across all areas of public policy, we Greens believe that the social economy should come first. We fully support the social enterprise strategy’s ambitions to nurture social enterprises to be
“at the forefront of a new wave of ethical and socially responsible business in Scotland.”
The vision that is set out in the strategy should create business models that challenge the status quo, promote equality and deliver more for Scotland; we support those intentions.
Recent figures suggest that more than 30 per cent of households—748,000 households—throughout Scotland are living in fuel poverty. That is a national disgrace, and it is why Greens advocate the introduction at a national level of a social enterprise that will directly address the needs of those who are living in fuel poverty in their own homes. We propose a not-for-profit energy and care-and-repair scheme that echoes the Scottish rural fuel poverty task force’s recommendation on delivering holistic support and affordable warmth improvements for cold, vulnerable and fuel-poor households. There is undoubtedly a need for such a service, especially in rural communities, and the social enterprise business model fits that approach perfectly.
However, we must not stop there. Given the growing number of people who are engaged in precarious work, on zero-hours or short-term contracts or in vulnerable self-employment, there is a growing need to strengthen legal, political and economic support for social enterprise and the wider social economy. We should be bold, encouraging all entrepreneurs to look beyond traditional business models and harnessing their talents for social enterprises. I and my colleagues call for the strategy to go further and to place people before profit, so that we have confidence in its ability to address our collective long-term ambitions for the social economy.
Greens recognise the contribution that all parties have made to the debate and we will support all the amendments and the motion this evening.
I move amendment S5M-03898.3, to insert after “Parliament”:
“believes that social enterprises, cooperatives and employee-owned businesses should be at the heart of the economy, challenging the status quo of current business models that do not put people before profit; agrees that government support for businesses must be conditional on the delivery of social and environmental goods such as the living wage, environmental responsibility, the recognition of trade unions and equal pay;”.
We move to the open debate. I have some time in hand, so I can give members extra time for interventions if they require it. Speeches should be up to six minutes long.15:06
It is quite inspiring to look at the scale of the social enterprise presence in Scotland and the rate at which the sector is expanding. If any justification for holding this debate were required, it would be found in the fact that more than 5,000 social enterprises are already operational in Scotland, with the sector contributing £1.68 million annually to our economy and supporting in excess of 112,000 jobs. There are 200 start-ups each year, so it really is a growth area. More than that, however, it is an ethical and inclusive growth area in which, for example, women are far better represented at the top than is the case in other sectors.
As the cabinet secretary put it in the final sentence of her foreword to the strategy report,
“I ... look forward to the full realisation of this dynamic, responsive, movement for change.”
There is no doubt that the 10-year strategy that has been laid out, supplemented by three-year action plans, has the potential to help to deliver that realisation.
One third of social enterprises are located in rural areas. My rural constituency of Angus South is home to a thriving employee-controlled social enterprise that delivers support services to 600 people across the whole county of Angus—in towns, villages, small settlements and the remoter areas. It is a pretty good example of what can be achieved using the social enterprise model.
Care About Angus was launched in November 2015 on the back of the local council pulling out of delivering home-help services. It began with 28 staff who were drawn from the ranks of council employees who had taken redundancy packages; it now has 60 employees. It started out with 210 clients, and it now has almost triple that number. The services that it provides go beyond basic home help and include volunteer driving, befriending, cooking and shopping. It is a growing success story, but it was not without its initial challenges. Despite the national policy support for social enterprises, it proved to be difficult for Care About Angus to secure significant funding for start-up expenditure, even though the service was filling a gap that had been created by the local authority’s withdrawal of provision that was running at a loss of £120,000 a year but meeting a clear need.
Of course, not all social enterprises survive, even when they are underwritten. Arbroath, in my constituency, and a vulnerable group of young people are only too painfully aware of that. Arbroath High Street was home to Darling’s coffee shop—an award-winning venture run by the charity Enable Scotland, which employed and trained youngsters with learning difficulties. It was much cherished by those who worked there and their families and, indeed, by the many customers that it attracted.
However, unrelated financial challenges led to Enable withdrawing from social enterprise and, despite the considerable efforts that were made to secure a future for Darling’s and the possibility of national funding to meet the enhanced staff supervision costs that the model incurred, the cafe sadly closed its doors early last year.
Thankfully, that failure does not reflect a trend. Locally in Angus, a number of exciting social enterprises are springing up, and we are seeing groups that are heading towards establishing themselves as social enterprises. Not least among the latter is the Kirriemuir Regeneration Group, which has its roots in the events of April 2015, when the town was confronted by the news that the council-owned camera obscura would be shutting its doors.
Six townsfolk came together and, within two months, the facility had reopened. In its first year of operation, it attracted approaching three times the number of visitors that it had in the preceding 12 months when operated by the National Trust for Scotland. The Kirriemuir Regeneration Group has also taken on the running of the nearby public toilets, has reopened the local pub in Northmuir, has helped to improve the Kirrie Den park and has taken on running other public toilets in the town centre. On top of that, the group’s members help to deliver the highly successful Bonfest. Once wages are paid to four staff, profits are given to community groups. The group is aiming to become a full social enterprise in due course.
Statistics show that one in four social enterprises is focused on a single community. I am impressed by the efforts in the village of Inverkeilor to open a community-run shop selling essential groceries and promoting local crafts and produce for locals, passing trade and visitors alike. Those behind the proposal have engaged proactively with those who run an already established community shop in Kirkmichael in Ayrshire in order to pick their brains, as it were. In that regard, I cannot help but think that the effectiveness and impact of the strategy that we are debating here would be enhanced by delivering low-level mentoring of some kind. There is lots of high-level stuff in the strategy document but, beneath that, it strikes me that having someone who has been over the course and is just a phone call away to advise about dos and don’ts could be of real practical benefit, especially to new, small-scale social enterprises. I wonder whether the basic census information that was gathered in 2015 might provide a basis for that.
Of course, as well as providing help and advice, exciting new, innovative social enterprises need financial pump-priming. It will not surprise members to learn that I have one of those organisations, too, in the Angus South area. Community First, which seeks to empower individuals, groups and organisations by supporting them to develop skills and knowledge, is rapidly finding its feet. Primarily, it seeks to improve employability skills, digital inclusion and social funds for innovation and regeneration. It has already been working unpaid in the areas of criminal justice and the elderly and is about to begin engagement work with Angus Carers. Its ethos is: see a need, meet that need. One could just as easily apply that ethos to Care about Angus or the Kirriemuir Regeneration Group.
As an MSP, I welcome that approach and the successes that it produces. In our work as members of the Scottish Parliament, we encounter plenty of intransigence and the “Sorry, it’s always been done this way,” no-can-do attitude. It is so refreshing to engage with social enterprises such as those that I have described, with their can do, will do approach. I welcome the efforts of Scotland’s social enterprises and the Government’s strategy to help the movement to maximise its potential.15:12
I welcome this debate on social enterprise in Scotland. I am delighted to take part in the debate and acknowledge the work that aspires to blend together social and economic goals in pursuit of a fairer, more equal society. It is great that 60 per cent of the chief executive officers and senior employees of social enterprises are female.
We are all familiar with the fantastic work of The Big Issue and the homeless world cup in driving ambition, reducing disadvantage and inequality, and giving opportunities to those who otherwise might have struggled to find them. Of course, social enterprises do not sit in isolation on a national scale or, indeed, a global scale but work well at a local level. It starts with an idea, a niche and a hive of community activity. Those ideas are grown in some of the most fragile local communities in rural locations, where communities are driven to look after each other and the environment in which they live.
East Lothian is a hotbed of good entrepreneurial bodies. There are 80 social enterprises operating in the county, and they generate £1.5 million in income and employ 230 people. Those businesses provide a strong community-based foundation that has potential for further growth. However, as my colleague Dean Lockhart mentioned, it is important, too, that people with ideas are not held back by red tape. I was chatting recently with one of those particularly creative people from East Lothian, who told me that their application had been fraught with difficulty. In fact, their application took three years of lengthy discussion, during which time they were faced with many barriers to setting up. In the end, the private landlord involved gave up on waiting for the project to come to fruition and it fell by the wayside. The entrepreneurs had no option but to get a bank loan and run it privately.
As Graeme Dey said, one third of all social enterprises are located in rural areas. The Ridge, which is based in Stenton, near Dunbar, is a Scottish Qualifications Authority-accredited centre; it is also a skills-based academy for Jobcentre Plus as well as an employability fund provider for Skills Development Scotland. It is accredited to provide rural skills through Lantra, and food hygiene training. In fact, it offers training in horticulture, hospitality, catering, fashion, social care and customer service with the aim of developing the skills and employability of marginalised and vulnerable local people. The Ridge provides support and nurtures talent while encouraging public and private organisations to contract locally.
Some 45 per cent of social enterprises operate with a stated objective of creating employment opportunities. I genuinely hope that the Scottish Government’s strategy will target local schools, colleges and universities and increase employment opportunities to help to reach its goal of developing our young workforce and reducing youth unemployment by 40 per cent by 2020.
A social enterprise is often established to meet a local need. In East Lothian, as in many other regions, skills gaps exist, and it is therefore encouraging that workforce development has been recognised as a priority. My hope is that, as in my example of the Ridge, social enterprise businesses will work hand in hand with Skills Development Scotland to nurture the young workforce and help young people who are ready to enter their chosen profession and, in turn, make a contribution to their communities. When people work alongside education providers and engage from pre-school right through the educational journey to promote social enterprise activity, innovative ideas are cultivated and individuals are encouraged to give something back to their communities.
I look forward to hearing more about the action that the Scottish Government will take to revolutionise the way it contracts goods and services from social enterprises, now it has the legal framework. It has the tools to meet its target and, of course, we all wish it luck in that endeavour.
I highlighted the enthusiasm of social enterprise in East Lothian, but the fact that its strong performance is replicated throughout Scotland means that Scottish social enterprises have a net worth of £3.86 billion and employ over 100,000 people.
There is much to be positive about in discussing Scotland’s social enterprise strategy. Overall, it seeks to build on the success of the past 10 years, which saw 42 per cent of all social enterprises formed, and it also aims to improve Scotland’s international reputation. That will be fantastic for Scottish tourism and encourage visitors to our shores. Some 250 social enterprises are recognised as supporting tourism and heritage.
I am encouraged to see a strategy that will benefit Scotland in more ways than one. I have seen at first hand the positive work that is done in East Lothian and across Scotland and I am happy to see a strategy that seeks to incorporate a focus on education and workforce development to meet the needs of respective communities.
I look forward to learning how the Scottish Government will capitalise on the new legal framework to further its already stated aim. Most important, the Scottish Government should ease the process to achieve success. The success of the Scottish economy will be largely due to a blend of innovation in the public, private and social enterprise sectors. If all three work together, we can boost Scotland’s economy, promote equality and feel good at the same time.15:18
The cabinet secretary’s foreword to “Scotland’s Social Enterprise Strategy 2016-26” reminds us of Scotland’s pioneering beginnings in the area. As others have done, she mentions Robert Owen, the mill owner and social reformer of New Lanark in the 19th century. However, she could have started much earlier than that. In 1761, in Fenwick, just north of Kilmarnock, the Fenwick weavers established what we believe to be the first recorded co-operative or social enterprise in the world. Its first rule, that they
“shall be honest and faithful to one another and to our employers ... and exact neither higher nor lower prices than are accustomed in the Towns and parishes of the neighbourhood”
espouses for me the same commitment that we find in the new strategy in 2017, that all social enterprises should
“use assets and surpluses for the public good and to operate in the wider interests of society.”
What a lovely contrast between our pioneering past and our present.
We commemorated the 250th anniversary of that event with a celebration in Fenwick in 2011. Our whole community owes a great debt of gratitude to my constituent the late John Smith, without whom the history of Fenwick, the weavers and the significance of the co-operative movement would have remained largely unknown to the local and wider contemporary Scottish public.
I would like to think that those humble beginnings helped Scotland to establish itself as a recognised world leader in social enterprises. The world forum was conceived and launched here in 2008 and it has grown considerably since then. It meets all over the world and is coming back to Scotland next year. As several colleagues have mentioned, social enterprises are now a significant part of our economy. We have about 5,000 in Scotland, and they employ more than 100,000 people and contribute nearly £2 billion to the economy. The start-up count every year is healthy and I hope that the strategic plan will provide the focus and become a template for further growth.
The strategy has been developed with the sector and has three key priorities: to help stimulate the social enterprise sector, to help organisations to develop and to help organisations to realise the market opportunities that exist for them.
Helping to stimulate the sector is the starting point, and I hope that working with local organisations to promote and encourage entrepreneurship and innovation will be a catalyst that allows more people to see the possibilities and think about starting social enterprises. I am pleased to see that social enterprises feature in our enterprising schools programme, and I make a plea that we include co-operatives in the language that we use and in our exemplification. Over several years, a message that has come from our cross-party group has been that there is a lack of knowledge and promotion of the co-operative business model in education. Too often, people—young people in particular—think only about starting new businesses, because that is all they that they are familiar with. I am hopeful we can begin to address that and show that social enterprises and co-operatives are models that are worth embracing from the outset.
If organisations are to develop, they need financial resource, knowledge and the ability to meet and network with others to help them to grow their potential. There can surely be nothing worse than feeling isolated with an idea, not knowing who to turn to for help and advice and not being able to have conversations with like-minded people. The strategy aims to provide that kind of support at the vital early stages of inception.
Additional workstreams will be added to help our social enterprises to find the new markets that are vital if they are to grow at all. They will need to try to find new business within the public sector, tap directly into the consumer market and, not least, find routes into the wider business market. Encouraging all sectors to consider doing business with social enterprises will provide a huge boost to them and will certainly help them to be more confident about long-term sustainability.
Of course, none of that comes without challenges, especially for sections of the social enterprise network that have been around for some time. There are issues relating to management and organisation and the need to be flexible enough to adapt to new circumstances and opportunities. Wages are an issue for some in the sector, but there is already good evidence—from Social Enterprise UK—telling us that social enterprises are leading the way on pay. Social Enterprise UK found that 74 per cent of social enterprises in the United Kingdom that responded to its online survey a year ago pay their employees the living wage, compared with just over 50 per cent of small businesses. That must be a welcome and positive sign for the future, even if there is still a challenge for some to embrace.
We have come a long way since those humble beginnings in Fenwick in 1761, and little did the weavers and their apprentices realise that they would still be the subject of much discussion in 2017. I would like to think that their founding principles are as relevant today as they were then. Their ideals have been enshrined in our modern strategy for social enterprises in Scotland. I am delighted to have been able to speak in the debate and I commend the Scottish Government’s motion to the chamber.15:24
I declare an interest as a Co-operative Party-supported MSP. It is a privilege to be part of the debate. As has already been said, the Co-operative Party celebrates 100 years of existence this year, and there are plans to set up and establish a co-operative in order to celebrate the story, song and music of the co-operative movement. I hope that people will participate in that interesting work.
I was at the event in Fenwick to celebrate the anniversary to which Willie Coffey referred, and it was wonderful. One of the interesting little undercurrents of our co-operative movement—which is of course desperate to co-operate—is the degree of competition in wanting to establish which was the first co-operative: the Rochdale pioneers, Fenwick or indeed New Lanark. It is a joyous history for us all in considering the development of the co-operative movement.
I welcome the comments that have been made about the importance of Robert Owen. I would be interested to hear about any ideas or plans by the Scottish Government to celebrate his work and the proud history of many other co-operators in our communities.
This is an opportunity to recognise the richness and diversity of the social economy sector. It has been a long-time part of Scottish life, whether in our island communities or in our cities. From the establishment of the Parliament, it has been a thread or a discourse that has run through our work, and it is on that basis that I recognise and welcome the strategy document.
Of course we recognise the “social” in “social enterprise”. It speaks to the very best in our communities, and it gives us some optimism that it is possible to create ethical work that treats people in the workforce with respect and addresses need.
I emphasise the critical role of the sector in the economy. It is not simply the fuzzy, feel-good, soft end of political discourse; social enterprise should be at the centre of our economic strategy and it should be central to an approach that can deliver a strong economy and shared prosperity.
In that regard, I commend the work of the Co-operative Party, which has been developing ideas around an economy in our interests. It has something important to say at a time when people feel that the economy has not worked in their interests, and that decisions made by others have been visited on those with no control over them.
It is important to recognise that there are not just wee co-operatives. There is a rich landscape of co-operatives, from very small ones to ones in the retail sector in our communities, whether they are part of the Co-operative Group, Scotmid, John Lewis or whatever. They can be of very different scales, but they have a shared view that they must say something relevant in our communities. I note the Co-operative Group’s work on loneliness, drawing on the experience of its customers and saying that something should be done.
We should recognise that co-operatives are not solely for when the market fails. Too often, we look to the co-operative option when a company is on the point of going bust. It should be a serious option, credibly considered and resourced throughout our economic strategy. I take this opportunity to highlight the centrality of co-operative models in delivering a fairer, more sustainable economy.
Co-operation is a radical and effective approach. It is indeed rooted in our history, but it is as relevant to the modern world as it ever was. Co-operation is an international movement, and we should draw on creative ideas from across the world where they are developed. It is also locally delivered. It does not limit its ambitions, but the test of its effectiveness is not what it claims but what it practically delivers. The joy of co-operation is that it tests its own success by what difference it makes. Critically, it is a model that is underpinned by democratic accountability.
I seek a refreshed commitment from the Scottish Government to co-operative models. The Government says the right things, but we want to hear more about what it is going to do in practical terms.
In the past I have asked how co-operative land ownership would be promoted, and I would be keen to know that an answer to that question is being developed. How exactly will the Scottish Government develop legislation and plans to open up co-operative opportunities in early learning, childcare, health and social care, land ownership, broadband and transport? How can co-operatives be used to promote ethical consumption, which is an aim that is identified in the paper? What work is going into ensuring that, where education addresses entrepreneurship and innovation—Willie Coffey referred to this—co-operative models are taught, too? There is some evidence that young people who never see themselves running a business will be drawn into a social enterprise if it is involved in their communities, and it might be a first step for them in taking on a broader opportunity.
How will the Scottish Government address the barrier that public procurement rules place in the way of social procurement, whether that involves fair trade, blacklisting or, arguably, the development of housing co-ops?
I want to make two important points in conclusion. First, there was something absent from the cabinet secretary’s introductory speech: the role of Co-operative Development Scotland. I am proud of its establishment and its recognised purpose in being an advocate for co-operation within economic thinking in Scotland and of the active role that it plays in supporting the co-operative option. However, I am greatly concerned that its visibility is less than it was and that the level of resources that are available to it to enable it to do its job might be reducing. It is time for a review of its role to ensure that its role is strengthened. I know that people in the organisation are doing good work, but the agency needs to be one that is seen as being central to the Scottish Government’s thinking.
I also hope that the Scottish Government considers having a minister for co-operation who could play a role across Government. Although the Cabinet Secretary for Communities, Social Security and Equalities is here, there is also a direct role for the Cabinet Secretary for Economy, Jobs and Fair Work and the Cabinet Secretary for Finance and the Constitution, and I want to know that that work is being joined up. I hope that the cabinet secretary will meet me and my fellow Co-operative Party MSPs to discuss the role of Co-operative Development Scotland.
Secondly, we know that land reform has transformed local communities, moving land in some cases from benign neglect to a position in which active work can be done on creating economic activity and rebuilding fragile communities. It is no surprise that co-operatives have been at the centre of that work. Equally, it is no surprise that credit unions and co-operatives are at the centre of some of our most impoverished urban communities, too. However, in the context of that evidence of the flourishing of co-operatives in our rural communities, it is simply incomprehensible that, rather than strengthening the creative work of Highlands and Islands Enterprise and seeking to replicate it, the Scottish Government now seeks to take over control of the work that it does and, I would argue, weaken the drive that has sustained and saved our communities over time and created economic opportunity. The social economy tells us that locally delivered action that is undertaken in a way that understands local challenges creates economic and social opportunities—the economic side is as important as the social side.
Co-ops tell us that democratic accountability matters and that the search for uniformity in this sector is a block to that creativity. I urge the Scottish Government to ensure that the enterprise review goes where the social enterprise strategy leads it. The Government should seek not to centralise or pursue uniformity but to liberate the talents and abilities in our communities, using not one economic model but an approach that supports a diversity of models. I do not think that it is too late for the Scottish Government to step back from the decisions that it has already taken in relation to enterprise agencies and, instead, review all of the enterprise agencies in order to enable the enterprise strategy to be informed by and strengthened by the social enterprise strategy rather than being in contradiction to it.
I welcome the fact that this debate is taking place. I look forward to meeting the minister, particularly with regard to Co-operative Development Scotland, and I celebrate, along with others across the chamber, the important work that is done by social enterprise and through the co-operative model every day in our communities.
As I said earlier, we have a bit of time in hand. I call Willie Rennie.15:33
That was a dangerous thing to say, Presiding Officer; I can talk forever, believe me.
Liberals are strong supporters of co-operatives and employee ownership, and are foursquare behind social enterprises. Ethical, environmentally conscious, community focused, often community owned and socially conscious—those are the characteristics that we often think of when considering social enterprises. However, the fact that a business makes a profit does not mean that it should be excused from behaving in a manner that we associate with social enterprises. All businesses should be ethical, environmentally conscious, community minded and socially conscious—those qualities should not be the exclusive preserve of social enterprises. Making a profit is, in itself, not necessarily bad. That was the drive of the liberal social reformers such as Robert Owen, who believed that caring for his workers was as good for his business as it was for the workers, and that it provided a good-quality service and good-quality goods to the people who wanted them.
I share the admiration that members around the chamber have shown for the social enterprise sector, which has been close to my heart for some time. I recall two social enterprises in my part of the world: the Castle Enterprise Scotland furniture project, in Cupar, which had an offshoot that recycled paint, and a book recycling project in Cowdenbeath that was run by the Shaw Trust. The book recycling project, which trained a lot of people from disadvantaged backgrounds, saved books from going to landfill and sold books to people who needed them. The Castle Enterprise paint recycling project took old paint and reused it, selling it on and saving it from going to landfill while also training people. Both of those projects had an environmental angle and a training aspect, and they sold goods that people wanted. They were close to my heart because my wife worked for both of them, but they have now closed down—not because of their connection with my wife, I should add. They were great projects, but that is part of the nature of the social enterprise sector. We need to work to bring stability and long-term viability to the sector.
We will support the motion, as its aspirations are laudable. However, much of the detail that will determine the success of the Scottish Government’s 10-year national enterprise strategy has yet to be revealed. The first in a series of action plans spanning the decade, apparently, will be published at some point this year, and I look forward to seeing how the Scottish Government’s actions match up to the rhetoric in the strategy. The strategy is a fine, glossy document, but the Government’s actions need to match up to that glossiness, because the debate would benefit from some transparency.
The 2015 social enterprise census represented a useful starting point, but there are still too many gaps in our knowledge. Where are the statistics on the success rate of social enterprises compared with other businesses? That touches on the viability point that I just made. I know how hard social enterprises need to work to stay afloat, but they can depend on a range of income streams from trading to grants and legacies. Some might say that that is part of the territory for such enterprises, which operate in parts of the economy where companies are apprehensive about getting involved and where profit margins are low but risks high. Indeed, the census noted that 39 per cent of typical social enterprises returned a deficit. Where, too, is the data confirming that Scotland’s social enterprises are on a par with world leaders in terms of their success, as the strategy asserts on two occasions? How many social enterprises are working around the clock to fill gaps in the system—areas that the public sector has overlooked or retreated from?
I recall visiting another social enterprise in my part of the world. Urban Therapy, which is based in Lochgelly, provides counselling for people who are suffering from mental ill health. The service that it provides is in such demand that people were travelling from as far afield as Glasgow. Glasgow to Fife is not a short distance, but people were travelling that far to get that kind of help. With one in four people in Scotland experiencing a mental health issue in their lifetime, it is little surprise that people are prepared to go that far to get the service, but it is a symptom of years of underfunding of mental health services.
If we are being asked to endorse a blueprint for social enterprise for the next decade, we need to be clear about where we are currently. That type of information would help to assure the Parliament that we are on the right track. Indeed, the strategy acknowledges that more information is necessary. It would, therefore, be helpful if the cabinet secretary, in her closing speech, were to set out what additional figures and key performance indicators members can expect to draw on in the future.
I was particularly drawn to the 2015 social enterprise census data on the Highlands and Islands, which highlighted the fact that 22 per cent of all social enterprises are located in that region—more than double what its population share might merit. The census rightly proclaims that to be “impressive” and specifically praises the foundations that Highlands and Islands Enterprise established through a pioneering new approach to community economic self-help that quickly became integral. Page 17 recalls that the factors that allow social enterprise to flourish in rural Scotland
“were recognised as long as 50 years ago in the Highlands and Islands, where the regional economic development agency ... was given a remit for community, as well as economic development, and where substantial support has been provided to social enterprises over many years.”
What was praised repeatedly in the 2015 census does not even merit a mention in the 2016 strategy. Indeed, the strategy entirely omits Highlands and Islands Enterprise’s contribution.
I want to take a moment to remind members about the region’s contribution. Highlands and Islands Enterprise regularly reports back to this Parliament. There are well over 1,000 such businesses in the region, accounting for almost 7,500 thousand jobs. Social enterprises’ activity contributes £130 million to gross value added to the region’s economy. HIE continues to offer wide support, from social entrepreneurs to social enterprises in schools. It has sought to attract young people to the region by providing them with placements with social businesses, providing dozens of opportunities through the ScotGrad programme.
Among HIE’s four priorities is to support social enterprise and to shape and to realise businesses’ growth aspirations. It is a unique remit, and recognising the social and community dimensions to economic development has proven its worth. Why undermine five decades of social and economic development in the region? Why are ministers so determined on the centralisation of HIE?
Will the member take an intervention?
I am about to conclude.
There is simply no basis for such a move. The Parliament has sent clear instructions to the Government and, frankly, it is deplorable that SNP ministers have not responded properly to that vote.15:41
I am grateful to be called to speak in this debate, which highlights the important role of Scotland’s social enterprises as well as our commitment to their further development here at home and across the world. Encouraging inclusive economic growth and tackling inequalities are inextricable from this SNP Government’s ambitions, and social enterprises are at the heart of both.
There are many types of social enterprise, but what unites them all is a core commitment to enhancing civic as well as economic life, and contributing to the social as well as to the economic good. In short, they are businesses in which society profits.
The profound connection between social and economic prosperity is becoming ever clearer, both within and outwith the social enterprise sector. The living wage provides an excellent example of that. First and foremost, paying the living wage is morally right: it ensures that people’s basic wage meets the cost of living and reduces in-work poverty. It is also profitable from a business perspective, with all the evidence showing that it leads to increased productivity and reduced staff absence and turnover, as well as sending a strong signal to customers about fairness.
The Government recently announced Scotland’s 700th living wage employer, and I hope that the number will continue to grow as more businesses become convinced of the strong case for paying their employees a fair wage. It is a good start, but given that there are hundreds of thousands of businesses and employers in Scotland, there is clearly a long way to go. It is no coincidence that nearly 70 per cent of Scotland’s social enterprises and three quarters of those across the United Kingdom as a whole pay at least the living wage. That is a clear demonstration of their recognition of, and commitment to, the links between social and economic prosperity.
As we have heard, the social enterprise sector contributes £1.68 billion to our economy each year and employs more than 100,000 people. Its true worth cannot be measured in figures or statistics, because it has an unparalleled role in tackling—at root source—the most complex challenges that we face.
Often locally based and focused, social enterprises have a hugely positive impact in empowering communities, particularly those with the greatest challenges, establishing viable business activity and creating job opportunities in underserved markets and fragile local economies.
Social enterprises are of manifest benefit to Scotland, economically and socially, and they provide innovative and localised ways of tackling some of our most complex challenges in a fair and sustainable manner.
For all those reasons, I strongly welcome the Government’s new strategy and its wide-ranging and ambitious goals for the future development of social enterprises through the three main aims of stimulating the sector, developing strong organisations and realising market opportunities. As the cabinet secretary set out, Scotland already ranks as a world leader in its support for the social enterprise sector. I particularly welcome the strategy’s ambition to build further on that global reputation. That ambition will be epitomised when Edinburgh hosts the social enterprise world forum, marking 10 years since the first such event was held in our capital city.
As convener of the cross-party group in the Scottish Parliament on credit unions, it would be remiss of me not to mention the exemplary work that is done by such social enterprises. Indeed, credit unions are often termed community banks—a description that much better reflects their nature and purpose. Owned and controlled by their members and with a membership that is based on a common bond, credit unions are underpinned by the co-operative ethos of people helping people. They are committed to providing a good-quality service for their members, as opposed to profit for shareholders. Their role in reducing poverty and the impact of financial worries is well recognised and has been described in reports by organisations from the Joseph Rowntree Foundation to the Social Market Foundation.
I am pleased that North Ayrshire Council has recently published its own three-year strategy to support social enterprises and I know that the Kilwinning-based 1st Alliance (Ayrshire) Credit Union was involved in its development. Social enterprises already have a strong basis in North Ayrshire. There are currently 98 in operation, with 824 full-time equivalent employees and a combined annual income of £5.6 million. Fifty two per cent of North Ayrshire’s social enterprises specifically target disadvantaged people as employees, which is above the Scotland-wide average of 48 per cent. As well as creating job opportunities, social enterprises have a strong social impact in that regard by helping us to tackle poverty and support some of our most vulnerable people.
The North Ayrshire Council strategy is committed to building on those solid foundations through supporting the development of a North Ayrshire social enterprise network. That is particularly to be welcomed, as the 2015 social enterprise census identified inadequate business support and lack of time or capacity to develop trading among the main obstacles to development. However, the single greatest issue that social enterprises identified was insecure or declining grant funding, so I was delighted that North Ayrshire Council recently announced £500,000 of funding to support the sector. The fund is aimed specifically at helping social enterprises to become more competitive and providing specialist help in areas such as human resources, leadership and procurement.
I am delighted that so much is being done to support social enterprises at a local and national level and I look forward to working with the Scottish Government and North Ayrshire Council to realise our ambitions as we go forward.15:47
The term “social enterprise” is sometimes difficult to pin down in political vernacular. The word “social”—as was dramatically illustrated by our colleague Richard Leonard—is often associated with the left of the political spectrum, whereas the word “enterprise” is often associated with its right. As the somewhat consensual nature of the debate shows, the reality is that “social enterprise” straddles both.
I thank Social Enterprise Scotland for its help in informing the debate. It is also right that we thank its staff. We can forget that they are a small team who punch well above their weight in what they do. My colleague Dean Lockhart gave a description of a social enterprise that he attributed to Social Enterprise Scotland. In addition, the organisation made another statement on its website. It said that
“Social enterprise is a dynamic way of doing business that can transform communities and drive profound and lasting social change.”
I am interested in the “lasting social change” element of that.
Social enterprise does not need to be a contradiction of ideologies. In fact, figures and analysis from the “State of Social Enterprise Report 2015”—I do not know whether members have read it; it is an excellent document—demonstrate that social enterprises not only wash their faces and support themselves, but have the ability to generate considerable profit, which they generally reinvest in themselves, or in wider community or environmental causes. There are about 70,000 social enterprises in the UK, and they contribute nearly £20 billion to our economy. Those qualities are not exclusive to social enterprises. In my day-to-day dealings as an MSP, I meet many businesses that also reinvest profits in themselves so that they can hire more staff. However, social enterprises have a much deeper and more profound commitment to social good.
The idea of social enterprise has become something of an evolving theme in my party over the years, from David Cameron’s “big society”, to Theresa May’s “shared society”, or—as I call it—society.
What about “high society”? [Laughter.]
Thank you, John. Putting aside politics for a moment—
Will the member take an intervention?
I would like to make some progress. It is hard to find fault in the notion—
Oh, go on then.
I am just wondering, if society is not “big” and “shared”, what is it?
Perhaps it is both. The point that I am trying to make is that we do not have to label society. I will read out what I was just about to say. Members will be pleased to learn that it is more words from Theresa May:
“society respects the bonds that we share as a union of people and nations, that recognises the obligations we have as citizens—obligations that make our society work.”
That is society to me.
Well done! [Laughter.]
Thank you. It was a good recovery.
Our social enterprises in Scotland employ 100,000 people, which is a significant number. It is also important to note that 59 per cent of social enterprises employ at least one individual from a disadvantaged background. The importance of the employment opportunities that social enterprises present should not be underestimated.
It is not just on funding that social enterprises rely: a proper regulatory environment needs to be in place to facilitate their sustainability. Let me give members a quick example in relation to a housing association. I was recently engaged in some casework, having been contacted by a constituent who was having trouble appealing a decision on his application to get a home from a housing association. His complaint was that there was little organisational structure to help him with the application. His application was rejected and he tried to appeal, but he told me that the housing association was wrapped in red tape and that divisions of responsibility were unclear, even to the people working in the association. His description of his experience is important because he said that he was not sure whether he was working with a charity, a profitable private company or a government or public body. That sums up the interweaving aims of the very nature of a social enterprise.
In the region that I represent, the Cunninghame Housing Association—I add that it is not the housing association in the example that I just gave—has offered vital housing services for over 30 years and is a great example of how a social enterprise can, when it is managed in the right way, with clear lines of organisation, flourish and serve the local community.
On the strategy, there are two areas that need to be addressed: the political ability of the Government to intervene and its financial ability to do so. Page 11 of the strategy talks about “Enabling Legislation”. I look forward to more detail in the action plan about how the Government thinks we can enable legislation and what legislation we can enable to promote social enterprise.
On funding, the strategy talks about seed capital and says:
“We will help ensure that budding social entrepreneurs have access to the seedcorn capital that they need”.
Again, I would like more detail on that. What is that capital and where is it coming from?
I do not have much more time, but I have many other points to make. I would be very happy to share those points with the minister in writing, or after the debate. We all have something to bring to the issue.
I want to close by acknowledging another important local social enterprise in my area. Ayrshire Community Media CIC is a good example of using technology to promote social enterprise. Let us not forget that more than 20 per cent of social enterprises are in the Highlands and Islands, which are some of our most difficult to reach areas and have some of the lowest connectivity rates. It is important to focus on that.
I welcome today’s debate. There have been some excellent speeches so far. I hope that we can work together constructively to promote the strategy and aims of the Government on social enterprise.15:54
I think that we are all broadly supportive of the subject of the debate, and I think that we generally have a positive reaction whenever we hear the term “social enterprise”—although when I started to think how I would define the phrase, I was less sure. I am thankful that when I looked at the definition in the voluntary “Social Enterprise Code of Practice” for Scotland, I saw that it is fairly loose; an organisation is a social enterprise as long as it sticks to five criteria, which include being a trading business and not distributing profits.
Two key parts of the success story of social enterprises are that—as has been mentioned—60 per cent of chief executive officers or the equivalent are women and that, on average, the ratio of top pay to bottom pay is just 2.5:1, which is much better than most private sector businesses manage. I see from the list of values and behaviours in the voluntary code of practice that the target is that social enterprises
“do not pay inequitable salaries to senior management; a maximum ratio of 1:5 between lowest and highest is a useful guide.”
That is why I find it strange that the Conservatives say that they are so enthusiastic about social enterprises. One of the key values of social enterprises concerns the relationship between top pay and bottom pay, and we know that the Conservatives are totally opposed to any such restriction. Therefore, they appear to be facing both ways at the same time, but I am sure that they will explain that to us one of these days. Mr Lockhart has an explanation.
The definition of what constitutes a social enterprise that is given in the code is not a legal definition; it is merely a recommendation. When we talk about social enterprises, we are not necessarily bound by that definition, because it is not a legal definition.
That explains it. The Conservatives say that they like social enterprises, but they do not want anything to do with something that would limit top pay.
I think that we have a problem with business-ownership models in this country, as the Green amendment highlights. As has been mentioned, it is widely assumed by people—probably without their consciously thinking about it—that a public limited company is the ideal way of doing business. We got used to strong nationalised industries such as the South of Scotland Electricity Board and the North of Scotland Hydro-Electric Board being turned into PLCs. The demise of the Airdrie Savings Bank—I declare that that is where my salary goes every month, for the time being—has been mentioned. That reminds us of what happened with the Trustee Savings Bank. When I was growing up, my first bank account was with the TSB; every high street had a branch. However, they all became PLCs, and a fat lot of good it did them.
Someone who is thinking of starting a business might think that a normal limited company is the way to go. It would start local, it would grow and, if it were successful, it would either float itself or be taken over by a PLC or a multinational organisation. That is seen as success, so we tend to fête people who have gone down that route.
Does it have to be that way? The answer today is no—it does not have to be that way. We have tremendous businesses that operate under different models. An obvious example is housing associations, which are a sector in themselves, and which I regard as one of the best examples of what we are looking for in social enterprises. For me, the key thing about housing associations—and, I hope, all social enterprises—is that they combine being local and being professional. In my constituency, we have many professional organisations, but many of them are just branches of huge national or international organisations. They are professional but not local.
On the other hand, we have local organisations that are very small, do good work and are run by a handful of volunteers, but which struggle to get a treasurer or to apply to for lottery funding. I categorise them as being very local and very good, but they struggle to be professional. We need more organisations that can be described as local and professional, and I see housing associations as one of the exemplars in that field.
I would like to mention some other social enterprises in my local area. I apologise to the many that I am afraid I must leave out. One of the biggest is the Wise Group, which members have probably heard of. It had to downsize when it did not win some Department for Work and Pensions contracts a few years ago, and that suggested to me that we could perhaps do more to favour such social enterprises rather than just awarding contracts for the work programme or anything else to whatever organisation happens to come along. We are talking about organisations that have values, and from which we get a lot more than £1 back when we pay them £1.
Geeza Break, which is based in Parkhead, is at the smaller end. As its name suggests, it can provide support to families who are just about making it, but could really do with a bit of support, a respite and a break. Its chair, Louise Kilby, recently received an MBE. Although I do not approve of the British empire by any manner of means, that says something about the high regard in which she and Geeza Break are held.
The Glasgow Association for Mental Health does great work in supporting people with mental health issues. Glasgow Women’s Library, which moved into my patch more recently, is unique not just in Scotland but in the UK in its size and reach, and the facilities that it provides. It is much more than a library.
All four of the social enterprises that I have just mentioned occupy buildings that are either listed or are really important for the community. Obviously, the building is not the main thing for any of them, but that illustrates the wider roles that they all have beyond being just another service provider that is making money.
I think very highly of the Glasgow Centre for Independent Living, and I know that it has given evidence at the Parliament. It is a real advocate for disabled people.
It is not all plain sailing, of course. The strategy recognises some of the challenges that we face now and that we will face in the future. I have seen social enterprises with really strong entrepreneurial leaders who have found it very hard to deal with the public sector and will not bend or adapt their ideals to obtain public funding. I have also seen parts of the public sector that have such a rigid system and so many hoops for social enterprises to jump through that it appears that they look down on them and do not respect them.
Finally, I want to mention an organisation that I have visited in the past month. I do not think that WEvolution is a social enterprise, as it is not a trading business, but it supports self-reliant groups that would have the potential to become social enterprises. There is a particular emphasis on women and international links. It does not tell the developing world how to do things; it learns from the Indian experience. It was originally called Passage from India, and it has taken a group of women from Glasgow to India to learn how women can set up their own groups.16:02
I will start with a declaration of interests. I am a director of a business with a retail interest in Edinburgh and I am a member of the Co-operative Party.
I have a private sector background, and this debate in some ways brings together the two parts of my working life. I always ran my business with a very strong people-centred ethos. That business was the first independent retailer in Edinburgh to become an accredited living wage employer. We strove to ensure that we were accountable to our employees and, above all else, we ensured that work was about providing opportunity and empowerment. Those values are very much the ones that I bring to politics. What my work life prior to politics and my political values have in common is a belief in work and that work should provide opportunity and empowerment.
There is a growing realisation that business needs to be people centred. In the knowledge economy in the 21st century, successful businesses have to be mindful of people’s needs and requirements, and they have to give them opportunity, equity and accountability. That is why social enterprises are so important and why this debate is important. Social enterprises exemplify those values in very real ways.
I very much appreciate the links that I have in my constituency with the Bike Station, albeit that it is having to struggle after a recent fire, and the very large Blackwood Housing Association. I therefore welcome the debate and the Scottish Government’s support and commitment. Social enterprises can do a great deal, and they need that support.
However, I need to make a critique of “Scotland’s Social Enterprise Strategy 2016-26”. A number of members have skirted around certain issues. Graeme Dey mentioned that the document is relatively high level, and Dean Lockhart was incredibly diplomatic in saying that it could do with some more detail. Willie Rennie was absolutely right to say that data needed to be established. It is because I support social enterprise that I think that the document has to be commented on.
I question whether the document contains a strategy at all. In a previous life, I was a management consultant, so forgive me for a moment while I outline what I believe a strategy to be. A strategy must have clear objectives and analysis of the current context and how those objectives will be achieved. It must define assets—in other words, money and people—and how they will be deployed. It has to have a defined understanding of success, which is the most critical and important element of any strategy. Unfortunately, the document fails on a good number of those measures.
Let me start with clarity. I will read part of the document—I am not sure whether it is a sentence or a paragraph, but I will give it a go. It states:
“Through pan-organisational action and coordination with our statutory partners, we will raise awareness of social enterprise and work to realise opportunities as part of policy formulation, through active consideration of alternative service delivery models, and in the design of public sector programmes, services, partnerships and funds.”
If that is clear to anyone else in the chamber, I would welcome an intervention right now.
Maurice Golden rose—
I will give way in a moment. The document seems to suggest that the Government can “raise awareness” through “consideration”. So, through the sheer power of thought alone, the Scottish Government will raise awareness of social enterprise.
Does the member agree that the paragraph that he read out is like something that new Labour would have produced?
We have come on a long way since those days.
On assets and deployment, there are many words such as “working with”, but there is little description of money or who will do the work. On assessing a baseline, there are infographics, but the numbers that feature in those infographics do not feature in the body of the text.
In a document of almost 50 pages, we have a single page on the measurement of success, with only half a page’s worth of text and only a promise of further information on measures. I welcome the fact that an action plan is coming out in a matter of weeks but, for a strategy to be a strategy, those measures, at least at a high level, have to be baked into its very body. Above all else, a strategy should provide clarity and be a guide to future action. Unfortunately, the document does little to provide that clarity.
Social enterprises are, above all else, businesses. When I have discussions with social enterprise entrepreneurs and people who work in them, they make that point time and again. I question why the person at the front of the document is Angela Constance and not Keith Brown. If we are going to promote social enterprise, that has to be in the context of our enterprise policy as a whole. We have a well-developed network of agencies that provide partnership, co-operation and collaboration, which are some of the things that the document talks about. However, when we look at the Scottish Government’s actions and see that it is cutting 33 per cent of the operational budget from Scottish Enterprise and undermining the Highlands and Islands Enterprise board, we have to question the Government’s commitment to provide the support, co-operation and collaboration that are needed to develop not just social enterprises but socially responsible enterprise, full stop.
We have the opportunity to do a great deal, but the Government is surely going in the wrong direction. Anyone who has read “The Entrepreneurial State” will understand the importance that the state plays in developing an economy in relation to innovation and, I would argue, social responsibility. This is a legislature and we were elected here as legislators. Week after week and month after month, we have had debate after debate to discuss a great many things but very little legislation. If the Scottish Government is going to fill our time with such things and have debates on such documents, please can we have some quality and some detail and clarity about what the Scottish Government is going to do, rather than warm words?
The social enterprise sector is extremely important, and I admire the commitment to it, but there needs to be detail if that commitment is to be honoured in any realistic way. Please do not waste our time. Please use the resources of the Scottish Government and bring forward plans that detail with clarity how ministers will improve Scotland and support social enterprises.
I call Tom Arthur, to be followed by John Scott. You have a generous six minutes, Mr Arthur.16:09
Thank you, Presiding Officer. I am pleased to have the opportunity—
I heard you sighing there—I am sorry that that made you feel weary, but we are looking forward to your speech.
You never make me feel weary, Presiding Officer. I look forward to you being in the chair.
I am pleased to have the opportunity to participate in this afternoon’s debate on Scotland’s first dedicated, long-term social enterprise strategy, not least because it affords me the opportunity to talk about all the fantastic work of social enterprises in my constituency, Renfrewshire South—I said “all”, but really I will just talk about some of that work, because there is so much of it.
Before I do that, I want to talk about social enterprises more generally and how they relate to the Scottish Government’s economic strategy, and I want to highlight ways in which the social enterprise strategy will impact positively on the sector.
The Scottish Government’s co-produced strategy—it is important to remember that the document has been co-produced—is the first of its kind. It provides a 10-year framework for action, which builds on the solid evidence base of the 2015 social enterprise census and Scotland’s long-standing association with business models that prioritise the social good.
An important element of a strategy is flexibility; if a strategy is too prescriptive—[Interruption.] I have listened, in committees, to people complaining about strategies being too prescriptive and locking them into an approach for 10 years. If a strategy is too prescriptive, people complain that the Government is trying to lock sectors in; if it is not prescriptive enough, they think that it is not worth the paper on which it is written.
The social enterprise strategy is buttressed by a series of social enterprise action plans that are about the tactical implementation of the strategy. There will be a focus on stimulating social enterprise, developing stronger organisations and realising market opportunities. There will be support for more people to start social enterprises, networks and workforce development opportunities will be enhanced, and access to public markets will be improved and widened. Profile in consumer markets will be developed and opportunities to increase trade with domestic and—this is important—international markets will be supported.
Social enterprises already make a significant contribution to the Scottish economy, employing more than 100,000 people and having a net worth of close to £4 billion, thereby making a positive contribution to the Scottish Government’s ambition of inclusive growth. More than 5,000 social enterprises are operating and there are 200 new start-ups every year, so there is clear evidence that this flourishing sector is making a positive impact.
Some of that impact is in evidence in Neilston, in my Renfrewshire South constituency. Last year, I had the pleasure of meeting the Neilston Development Trust at its base, the Bank, which as recently as 10 years ago was a closed high street bank but is now a vibrant and dynamic community hub. As well as hosting a popular cafe and local first responders, the Bank is used by 30 public and third sector organisations, 15 community groups, and other social enterprises and microbusinesses. There were nearly 5,000 visitors to the cafe in the last year alone, so it is easy to understand why the Bank has been called the living room of Neilston.
The success of the Bank alone would be regarded as an outstanding achievement for an organisation, but it is only one aspect of the Neilston Development Trust’s work. The trust is fast becoming a key player in active travel. It is one of only seven cycle-friendly-employer assessor bodies in Scotland, and it is responsible for assessing employers in East Renfrewshire, South Ayrshire, Renfrewshire and South Lanarkshire. In the past year or so, the trust has been responsible for the repair and recycling of more than 300 bikes and has secured many cycle-to-work pledges, thereby saving an estimated 16 tonnes of CO2. The work on active travel has not just had a positive environmental impact; the trust has also engaged students from across East Renfrewshire in cycle mechanics and City and Guilds vocational training.
The trust is also a partner in the Neilston Community Wind Farm, which has produced enough carbon-free electricity in the past year to power twice the number of homes in Neilston. With more than 100 regular volunteers and 14 paid employees, the trust’s work is community empowerment in action, creating opportunities and improving lives.
Renfrewshire South is home to other fantastic social enterprises, such as the Linwood Community Development Trust, which I have mentioned in the Parliament, and Voluntary Action East Renfrewshire, which is based in Barrhead. Those social enterprises make a huge contribution, individually and collectively, and I look forward to future opportunities to share some of their fantastic work with members.
The range of contributions that social enterprises make is vast, but most important is how social enterprises strengthen communities and empower people.
I agree with the member about the role that social enterprises play in communities. Does he agree that another significant thing about the approach is that it creates organisations that pay the living wage, are environmentally serious and recognise the importance of equal pay, and that organisations that do not do that ought not to be in receipt of public funds?
I have a great deal of sympathy with Johann Lamont’s points. Certainly, at the Neilston Development Trust, I met people who came from chaotic lifestyles whose lives were transformed. The dignity of having a job—of having employment—and the feeling of being empowered have incredible transformative effects.
I was just about to make the point that it is clear from the political upheaval of the past 12 months that many people across the world have felt alienated from power and from the centres of control. That has been reflected in the levels of democratic engagement. Last May, in Renfrewshire South, two out of every five people who were entitled to vote chose not to exercise that right. In recent local government elections, typically fewer have chosen to participate.
Sadly, it is still the case that many people do not feel that they have a stake or a role in relation to power or decision-making. Too often, this can lead to a feeling that nothing can change, that their lives and communities are fixed, and that the inequity and inequality that is still far too pervasive across the globe cannot be addressed through engagement with the current political systems. Some respond to that sense of hopelessness with quiet resignation; others respond with anger.
Whatever our political views, I hope that we can all agree that the political times we are living through have been shaped by communities who feel strongly that they have been left behind, marginalised, belittled and ignored. Although there is no single solution to the challenges faced by such communities, a big part of the answer is in community empowerment, which is so effectively provided by social enterprises.
To conclude, Neilston, Barrhead and Linwood, to give three examples, have experienced many of the problems shared by post-industrial communities across Scotland and the western world. In addressing those problems in each of the three communities—
I have been a wee bit too generous, Mr Arthur—please conclude.
—social enterprises have played and will continue to play a vital role—
I look forward to continuing to support them and other social enterprises—
No, no. Conclude.
—in Renfrewshire South and I commend the Government on its work to support them—
Mr Arthur, sit down. When I say a generous six minutes, I do not mean seven and a half minutes. Mr Scott—I know that you know what to do.16:16
Thank you. What a pleasant surprise it is to hear that, Presiding Officer.
It is a pleasure to speak in the debate. I declare an interest as one of the pioneers of farmers markets in Scotland and as the convener of the cross-party group on towns and town centres, as well as being a past co-convener of the cross-party group on co-operatives.
Like most members, I will use my speech to support the motion and to talk a bit about social enterprise in my constituency—in Ayr and in Ayrshire more generally. Perhaps unusually for a Conservative, I, too, express admiration for Robert Owen and agree with much of what Willie Coffey and Johann Lamont said.
In preparing for the debate, I was struck by the lack of a legal or clear-cut definition of what constitutes a social enterprise, so if I stray into areas that others would not regard as social enterprise, I will welcome members’ tolerance and forbearance. I welcome “Scotland’s Social Enterprise Strategy 2016-26”, which takes forward the work of social enterprise for the next 10 years, although details and definitions need to be strengthened and enhanced.
Perhaps the biggest social enterprise that I have been involved in is Ayrshire Farmers Market, which is a co-operative that I founded with the help of James Graham and Douglas Watson of the Scottish Agricultural Organisation Society. The co-operative grew out of the second farmers market to be created in Scotland, which was established in Ayr in 1999. When I won the Ayr by-election in 2000, it immediately became apparent to my late wife and me that we would no longer be able to run the market that we had created, so we transferred ownership of the market to the co-operative that it now is.
From that experience, during my early years as an MSP I helped to create the Scottish Association of Farmers Markets, which I chaired for about five years during the high-growth period of the development of farmers markets across Scotland. The markets were and remain collaborations of like-minded people who work together to create an interest in retailing local food as well as an interface between country and town. From them, farm shops and other businesses have grown. Like Johann Lamont, I support the work of Co-operative Development Scotland and Sarah Deas as its chief executive.
In my constituency, we have other, more significant social enterprises, such as Ayrshire Housing, which is ably led by Jim Whiston. It is a major provider of affordable housing locally and I cannot speak highly enough of the service that it provides and the good work that it does. Ayrshire Housing’s story and history of growth are a good example of a path that others could follow. Murray Tosh, a former MSP of this place, played a significant role in its development in Ayrshire.
We need to grow the numbers of such enterprises, as the motion and amendments before us agree that we should. To that end, we should do more to support organisations such as South Ayrshire Social Enterprise Network, which believes
“that social enterprise can transform the economic, environmental, social and cultural life of South Ayrshire”.
The network lists among its members organisations such as Access to Employment Ayr, Age Concern Ayr, Ayr Gaiety Partnership, Hansel Alliance, Prestwick Civic Pride Partnership, South Ayrshire Care and Repair and the Salvation Army. I am familiar with and supportive of all those organisations.
I highlight the success of Ayr Gaiety Partnership, which the Parliament has debated in times past, and which has, with welcome financial support from the Scottish Government and South Ayrshire Council, found a new model that I hope will ensure its future. However, the most important asset that Gaiety has is its army of willing volunteers—I give all credit to them—which sets it apart from its previous business model. Access to Employment Ayr has for many years sought to get people into work, while South Ayrshire Care and Repair has for many years helped to refurbish homes and helped those in difficulty.
Prestwick Civic Pride Partnership seeks to put further heart into the vibrant community that is already to be found in Prestwick, and it has in itself become a regeneration tool. Social enterprise is well established in South Ayrshire, and I can only speculate that we perhaps already have more than our fair share of organisations that can easily be defined as social enterprises.
We probably have many organisations over and above the 42 that are listed on the South Ayrshire Social Enterprise Network website that are social enterprises in everything but name, although they do not appear on that membership list. They include organisations such as Opportunities in Retirement Ayr, which has 1,400 members. It supports activity in retirement and plays a vital role in Ayr’s social fabric by keeping people active in their retirement and prolonging active life in our community.
Another organisation that can be called a social enterprise is Ayrshire Cancer Support, which transports on a charitable basis Ayrshire cancer patients to and from the Beatson centre in Glasgow for treatment. The men and women who do that daily are little short of saints.
There is an undefined border between organised voluntary work for the benefit of others and becoming a social enterprise. One of the links and enablers in the development from volunteering to social enterprise is Voluntary Action South Ayrshire, whose conference I will attend a week today in the Brig o’ Doon hotel—all are welcome—where I dare say much will be said about encouraging the growth and development of our vital third sector.
It was none other than Winston Churchill who pointed out that we make a living by what we get, but we make a life by what we give. That could almost be a mission statement for the social enterprise sector. At any rate, it is a good enough ethos and principle for most of us in the chamber to agree on and aspire to. I look forward to supporting the Government motion, and I recommend the Conservative amendment to Parliament.
I call Emma Harper, who is the last speaker in the open debate. You have six minutes, Ms Harper—I have been too generous by far.16:23
Thank you, Presiding Officer. I am pleased to speak in the debate. Social enterprises play a crucial role in reducing disadvantage and inequality in our communities. They are innovative, independent businesses with a social purpose that operate for the common good rather than for private profit. They represent a more ethical and sustainable way of doing business, they provide inventive solutions to the problems that many face and they are central to achieving our shared vision of inclusive growth and a fairer Scotland. The Scottish Government wants to work with the people of Scotland—in communities, in business and industry and in public and third sector organisations—to tackle inequality, and a key aspect of that work involves supporting the growth of social enterprises.
Scotland is recognised as a world leader in the social enterprise field. There are more than 5,000 social enterprises in Scotland; they are worth £1.68 billion to the economy and have a net worth of £3.69 billion. They provide more than 112,000 jobs, and more than 200 new social enterprises are formed each year.
Scotland has a long history of pioneering new forms of business, such as the co-operative model, which Richard Leonard mentioned, and the mutual and social enterprise models, which reflect the belief in a fairer, more equal society, in which business activity is a means to achieving that end. Locally and nationally, the social enterprise sector is incredibly diverse; it encompasses development trusts, community enterprises, housing associations and social firms.
It is difficult to be the final speaker in the open debate, as a lot about the subject has been said already, so I will take members straight to the south of Scotland and Dumfries and Galloway. The recent census recorded 190 social enterprises in Dumfries and Galloway, such as Dumfries and Galloway Citizens Advice Service, the Usual Place, Loreburn Housing Association, Dumfries and Galloway Chamber of Commerce and community transport initiatives.
The Food Train, which originated in Dumfries and Galloway in 1995, is an excellent example to highlight. The charity, which supports older people, started after the elderly forum spoke to its members and asked them what services would help in their day-to-day lives. It began by taking orders for shopping, which were delivered by volunteers who unpacked the food and stayed for a chat.
The project’s purpose was more than just to deliver food to elderly people; it was to provide a point of contact and combat isolation. Eventually, other initiatives grew out of that. For example, the meal makers project involves volunteers staying to cook a meal, which helps to tackle loneliness and malnutrition among the elderly population. I attended a Royal College of Nursing event last year with Theresa Fyffe, the head of RCN, and heard how loneliness is a major factor for the elderly population. During my time as a nurse educator with NHS Dumfries and Galloway, I met Food Train volunteers to help to identify the best ways of working to achieve better health and social care. The initiative turned out to be very successful, and the scheme has been expanded across Scotland, with projects in Dundee, Stirling, Glasgow, West Lothian, Renfrewshire and North Ayrshire.
Last week, I visited another social enterprise that provides vital services in the community. Branch Out is a social enterprise in Dumfries that is run by Compass Brain Injury Specialists, which was formerly part of Headway in the UK. Branch Out was commissioned to provide slow-stream cognitive rehabilitation to survivors of acquired brain injury. Compass BIS is a specialist service for adults, children and young people with acquired brain injury and their families and carers. Branch Out has been operating for about eight months, is debt free and operates at about 60 per cent profit, which is then reinvested in the organisation. It accepts patients from across Dumfries and Galloway as self-referrals, as well as referrals from the national health service and social work. The social enterprise delivers two Care Inspectorate-registered services: the rehabilitation centre and community rehab. Those services are commissioned by both the NHS and social work. Patients sometimes come from over the border, because there is a paucity of service availability in north-east and north-west England.
Branch Out and Compass BIS use person-centred outcomes and care planning. Their children and families service has developed to the stage where it must now be registered with the Care Inspectorate. The services cost around £350,000 to commission, but that was a significant saving on the cost of delivery via statutory service provision.
I could continue to give examples of social enterprise success stories in Dumfries and Galloway. I just worked out that, if I was to visit one social enterprise a week, it would take me more than three and a half years to visit them all.
We can agree that such organisations are central to achieving our shared vision of inclusive growth and a fairer Scotland. That is why Scotland’s first dedicated, long-term social enterprise strategy should be welcomed across the chamber. The strategy provides a framework for action that builds on the strong base that is evident in the social enterprise census of 2015, and it will cement Scotland’s reputation as the best place to start and grow a social enterprise. I welcome and support the Scottish Government’s motion.
Before we move to closing speeches, I have to say that John Scott is not in the chamber, although he spoke in the debate. No doubt he will take that into account, particularly given his previous role in the chamber. I am more than a little disappointed.16:29
The debate has been useful, and we have highlighted some key tensions, which I will return to.
In opening the debate, the cabinet secretary talked about a paradigm shift. The dictionary reminds us that a paradigm shift is
“a fundamental change in approach or underlying assumptions”.
As much as we welcome the social enterprise strategy, we do not see it as evidence of a paradigm shift, although that might occur at some point.
Many members made interesting speeches. Johann Lamont mentioned the importance of co-operatives, which we agree about. Years ago, when I was considering joining a political party, I toyed with the idea of joining the Co-operative Party. I like parties that are autonomous, though, so the ancient—and honourable—hitching of the Co-operative Party and the Labour Party meant that I did not take up that opportunity. If I become disappointed with the Green movement one day and the Co-operative Party becomes independent, I may well join my colleagues over there.
Indeed. I am only joking.
Johann Lamont’s colleague Daniel Johnson reminded us, with quite an effective critique of the strategy, what a strategy actually is. He also raised the important question of why, in the debate and in the Scottish Government, it is the Cabinet Secretary for Communities, Social Security and Equalities who has the social enterprise brief, rather than the Cabinet Secretary for Economy, Jobs and Fair Work. That gets to the heart of the matter. As Jamie Greene mentioned, it acknowledges that social enterprise can be regarded as a blend of socialism and entrepreneurialism, but it emphasises that social enterprise is a social project, although it is equally an enterprise project.
I am sure that the cabinet secretary understands that and I am sure that the Scottish Government is working across Cabinet portfolios to implement the social enterprise strategy effectively. However, the danger is that the Scottish Government will pay too much attention to and place too much emphasis on the social, valuable though that is.
Our amendment draws attention to the wider issues of pay and the recognition of trade unions. In 2013, my colleague Alison Johnstone raised the issue of attaching conditions to public support for the private sector in the context of Amazon. Our amendment recognises
“that government support for businesses must be conditional on the delivery of social and environmental goods such as the living wage, environmental responsibility, the recognition of trade unions and equal pay”.
The debate also highlighted again the questions about the future of Highlands and Islands Enterprise. Members pointed out that a disproportionate number of social enterprises are located in the Highlands and Islands and, as Willie Rennie said, that is no coincidence. The old Highlands and Islands Development Board, which had a social remit, did a lot of work in the 1960s and 1970s to develop the co-operative movement.
In a debate in this place that was led, as I recall, by a Conservative member for the Highlands and Islands whose name I—
Members: Donald Cameron.
Thank you. In that debate, I raised the question of the legal personality of Highlands and Islands Enterprise, and Keith Brown, the Cabinet Secretary for Economy, Jobs and Fair Work, promised to come back to me on that. I am still looking forward to that response.
Perhaps the most interesting speech was from Jamie Greene, with his discussion of the idea of society as an evolving theme. Is it big, as David Cameron once suggested? Is it shared, as Theresa May now suggests? At least those are welcome advances on Thatcher’s idea; in her day, there was no such thing as society. However, it begs the question of where Conservative thinking about society is going.
John Mason raised the important question of pay ratios, and Dean Lockhart correctly pointed out that, in the context of social enterprise, they are advisory and have no legal standing. When the Conservatives wind up, could they provide us with clarity on whether they support the elevation of pay ratios to make them a legal requirement?
Dean Lockhart and Rachael Hamilton raised the question of pupils and education, and that gives me the opportunity to endorse the valuable work of the Social Enterprise Academy, which works with primary and secondary pupils across Scotland.
Two years ago, Greens adopted a policy of legislating to grant private sector employees the right to buy the company for which they work. That is indicative of the kind of paradigm shift that needs to take place in how we organise the economy.
In three months’ time, there will be local government elections, which provide a valuable opportunity to debate the social economy further. In my region, the City of Edinburgh Council has done valuable work on that area, but there are still huge opportunities to exploit. I am disappointed to read news today that the Labour-Conservative Stirling Council will privatise sports facilities.
As we indicated, we will support the motion and all the amendments, and I commend our amendment to Parliament.
I call Jackie Baillie to close for Labour.16:36
I am grateful for the opportunity to close this debate on social enterprises. Richard Leonard was right to remind us of the history of Labour and the co-operative movement, and the importance of Robert Owen in the development of co-operatives. However, I remind the chamber that the term that we should be using is not “colleagues” or, indeed, “comrades”, but “co-operators”.
Nobody who is listening this afternoon can be in any doubt about the high regard in which members hold social enterprises, co-operatives and mutuals. Everyone has a local example of needs being met, services being delivered, employment being generated and capacity being enhanced in their community. I am sure that the cabinet secretary is looking forward eagerly to receiving Jamie Greene’s additional thoughts on the matter.
Members have heard some of the headline statistics, but they bear repeating. There are 5,200 social enterprises currently operating in Scotland, with more than 110,000 employees. They come in all shapes and sizes, are both urban and rural, and touch every area of our economy. Their main sectors of trading activity tend to be in housing and health and social care, and their contribution to the economy is £1.68 billion in gross value added. Social enterprises are an important and growing sector.
Yes, social enterprises are businesses, but they trade for the common good and use their assets and surpluses for that purpose. The social enterprise model is inclusive. Social enterprises can and do drive growth in our local and regional economies, but we need to provide them with support, just as we do for businesses more generally. Individual entrepreneurs need support, and social enterprises need access to financial support to help them to grow. They need business support from mainstream agencies such as Scottish Enterprise and Highlands and Islands Enterprise—which must see providing such support as part of their core business—as well as specialist support.
As many members, including Willie Rennie and Richard Leonard, have said, the Government should leave HIE well alone. It works, so the Government should—please—not tinker with it.
I am proud of the fact that some time ago I was the Labour cabinet minister who helped the sector, at the start of this Parliament’s journey, by creating Social Investment Scotland. It offered a new finance model for charities and social enterprises. Its mission was to stimulate the creation and growth of social enterprise in Scotland and it has done really well, because now it supports projects in every town and city across the country—members have mentioned many of them.
One spin-off from SIS has been the inaugural Asda social enterprise supplier academy. Funded by the carrier bag levy, it brought together social enterprises with Asda buyers. It was the first event of its kind and gave 12 social enterprises from Scotland an understanding of what it takes to trade with large-scale retailers. Participants included Brewgooder, Impact Arts and MsMissMrs, which makes empowerment pants.
I will not talk about empowerment pants, however; instead, I will tell members about Brewgooder. The social enterprise is a collaboration between BrewDog, Alan Mahon and Josh Littlejohn and has a simple mission: to provide clean water for 1 million people through the power of craft beer. A hundred per cent of Brewgooder’s profits will be donated to clean-water charities. As a result of its work with Asda, Brewgooder’s beer is now stocked on its shelves, in BrewDog pubs and in our very own Parliament. In fact, it is beer of the month in the Parliament bar. For once, members will be doing good by having a pint, and I encourage them to do so.
The diversity of social enterprises is truly extraordinary. That is reflected in my constituency, too. Social care providers such as Cornerstone and the Helensburgh and Lomond carers centre, and Tullochan, which provides opportunities for young people to learn and flourish, all do a hugely valuable job.
Times are tough. Some organisations are dependent in part on local government funding assistance. The Scottish Government has cut local government funding by £170 million this year and by £1.5 billion since 2011. There has been a cut to the funding of our enterprise agencies, as we have heard already—a cut of £50 million to Scottish Enterprise this year alone, which is something like 33 per cent in real terms. If the Scottish Government is to meet the lofty ambitions that we all share, cutting support in that way will undermine the strategy.
There is little to disagree with in the strategy. It is quite high level and light on detail. The lack of targets or specific measures is disappointing, as we have heard in speeches from across the chamber. How do we know what works if we do not measure it? As Daniel Johnson pointed out, the Scottish Government is going to think about it all as one of its actions.
The cabinet secretary has spoken about an action plan to come, but one should have been published alongside the strategy document. Targets, milestones, lead responsibility and resources should all feature. I cannot tell what money the Scottish Government puts towards social enterprise. Can the cabinet secretary tell us that in her closing remarks?
I will finish on a point that a number of members have made. Why does social enterprise sit in the communities portfolio? Surely it should be in the economy brief. If we believe that social enterprises are central to our economy, and if they access support from Scottish Enterprise and HIE, which are both Government economic development agencies, why should the policy lead not sit with the Cabinet Secretary for Economy, Jobs and Fair Work?
Warm words and good intentions are great—of course they are. Even better, however, is robust action to support social enterprises to grow.16:42
I welcome the aspirational sentiment of much of the strategy, although at this point it is lacking in detail with regard to its implementation. I appreciate that we have been promised a series of action plans outlining how it will be delivered, and I would like the SNP Government to focus on a number of areas within those action plans. However, we are supportive of the motion, and that is why our amendment simply reflects additions around harnessing public sector spending power, developing a verifiable social impact measurement tool and recognising the preventative spend impact of social enterprises. I will develop those points in my speech.
Today’s debate has been interesting, with a lot consensus—apart from John Mason, who was as adversarial as ever, and who successfully managed to empty the public gallery. His speech largely focused on form over substance. We do not believe in making rigid definitions that may hurt the sector. That is what we need to focus on.
We share with the cabinet secretary the vision that social enterprises will grow, expand and influence the market. Angela Constance spoke about innovation and inclusion, two themes that we can also support. Dean Lockhart highlighted that there are more than 5,000 social enterprises in Scotland, employing 110,000 people, and that the sector is female led. He also advocated the encouragement of vocational skills and a reduction in grant dependency.
We will also be supporting the Labour amendment, although after Richard Leonard spoke I almost changed my mind. His urging of caution with respect to the realising of market opportunities must, in turn, be met with caution. However, we agree with the role that social enterprises can have in rebuilding our economy and creating new forms of local ownership, and we recognise the concern, highlighted by Johann Lamont, about the effect that cuts to local government and the enterprise agencies could have had on social enterprises.
Daniel Johnson’s critique and analysis of the strategy was excellent—dare I say almost second to none?—and was a well-informed and comprehensive contribution. He read out a quote that I could not quite decipher, and I have one for him, too. On page 28, the strategy says:
“Where necessary we will put in place additional awareness-raising and specialist, early stage capacity building support where potential exists to realise latent potential.”
We will not be supporting the Green Party amendment. Our position is that social enterprises should complement existing business models and add to the wide spectrum of successful businesses in Scotland.
Graeme Dey gave a strong account of how social enterprises have contributed to the Angus area, and he made a worthwhile suggestion about a mentoring programme.
On the member’s point about the Green amendment, I am not sure that there is anything in it that suggests that social enterprises should not complement existing models.
I think that the severe definitions that are contained in the amendment are the reason for our not supporting it. I thought that the member was going to talk about the mentoring programme in Angus, as that was the specific point that I was making.
Rachael Hamilton spoke about East Lothian, where social enterprises generate income of £1.5 million and employ 230 people. She also highlighted the fact that red tape is holding the sector back.
Willie Rennie spoke about Fife and mentioned two social enterprises that, sadly, are no longer trading but which were involved in the recycling of paint and the reuse of books. I wonder whether, if the right enterprise agency support had been given to those businesses, they would still survive today. Certainly, it is a shame that they are no longer around.
Jamie Greene spoke about the deep and profound contribution that social enterprises can make, and I thought that John Scott had the quote of the day when he quoted Winston Churchill saying that we make a living by what we earn, but we make a life by what we give. I like that.
On that note, I want to highlight the steps that have been taken through the Procurement Reform (Scotland) Act 2014 to encourage the use of community benefit clauses in public sector contracts. That will have an impact on the ability of social enterprises to bid for and win public sector contracts. Recent amendments to EU procurement legislation have significantly broadened the scope of the definition of reserved contracts, from a very narrow one that applies to only a small number of supported businesses to a far broader one that now covers hundreds of social enterprises. The Scottish public sector now has the legal framework to revolutionise the way in which it contracts with social enterprises for goods and services, if it chooses to do so. I want to see how that is reflected in the upcoming action plans.
I note that the strategy commits to exploring approaches to developing a flexible and holistic Scottish model of impact measurement. I welcome that commitment, but we should not underestimate the challenges. There are countless impact measurement methods and tools that have been developed across the globe, but there is no magic bullet. I look forward to seeing the SNP Government’s proposals in this area. However, whatever tool it decides upon will have to be robust, cost effective, accessible to all and independently verifiable, particularly if it is to be used as a basis for investment and funding decisions.
Linked to the social impact measurement, the strategy states that social enterprises deliver
“services that shift the balance of provision from costly crisis intervention to prevention.”
However, very little true progress has been made in that regard. Too many of our public bodies, including the NHS and local authorities, do not recognise the preventative spend impact of social enterprises to the extent that they are prepared to make a financial contribution to those social enterprises. I am interested to see how that will be reflected in the action plans.
The strategy also makes a recommendation about intelligent grant making. However, as anyone who is involved in the social enterprise sector knows, there is a chronic shortage of that type of funding, which is particularly hard for emerging social enterprises to access. I note that there is no commitment from the SNP Government in the strategy to reinitiate the enterprise growth fund or its predecessor, the third sector enterprise fund, which provided exactly that kind of pump-prime funding. I will be keen to see the Government’s plans in the area and whether it will commit to new enterprise funding for social enterprises.
If the social enterprise sector in Scotland is to continue to thrive and prosper, it is critical that the upcoming action plans that are attached to the strategy recognise those challenges and take steps to address them.
I urge the chamber to support the amendment in Dean Lockhart’s name.16:50
I thank members for their speeches this afternoon. The debate has been lively at times and good natured throughout. There has been a large amount of consensus, although there has not been unanimity, which gives us all something to reflect on and debate.
We have had a bit of a canter through history, starting with the Fenwick weavers, with many members focusing on Robert Owen. I say gently to Richard Leonard that, although he is far more dogmatic a socialist than I am a nationalist, I accept his point about the need to give an honest appraisal when we discuss the past.
The debate is very much about looking to the future and how we can embed and, as Dean Lockhart says, build on the success of social enterprise in Scotland both at home and abroad. Part of the debate that was not given much attention is the role of social enterprise internationally. We know that 7 per cent of social enterprises in Scotland trade internationally, and the whole purpose of the internationalisation strategy for social enterprise is to work hard to extend that trade. That will be good for social enterprises here in Scotland, but it also has an invaluable contribution to make to global justice.
On that specific point, can the cabinet secretary shed some light on the role that Scottish Development International might have in helping Scottish social enterprises to trade or open up trade overseas?
SDI has an important role to play—as do all our enterprise agencies—in supporting social enterprise. I will come to that point later.
I will be happy to meet Johann Lamont and other Co-operative Party members. I look forward to that. She rightly identified the cross-governmental and cross-cutting aspect of the agenda.
I say to Daniel Johnson that the Cabinet works on a collaborative basis, and inclusive growth is everybody’s business.
When I say that our social enterprise sector is world leading, I state that with a degree of authority. It is important to recognise and celebrate the success of the sector, not to bask in its glory but to increase our resolve to do more to ensure that social enterprise in Scotland reaches its full potential in terms of its economic impact as well as its social impact. The chair of the Social Enterprise World Forum, David LePage of Vancouver, Canada, has said that social enterprise leaders from around the world are keen to come to Scotland, as the social enterprise policy and practice environment is by far the most advanced worldwide, with Scotland maintaining its position as the leading social enterprise nation. On 10 January, speaking in the House of Lords on the UK Government’s approach to social enterprise, John Bird, the co-founder of The Big Issue, said:
“Unfortunately, the whole system is moving rather slowly ... Is it possible maybe to imitate the Scottish Government’s idea of having a 10-year strategy to look at ways in which to do social enterprise in every conceivable way?”—[Official Report, House of Lords, 10 January 2017; Vol 777, c 1856.]
I think that we all welcome those words and recognise that there is an awful lot of good work going on and global regard for what we are doing here. However, surely we need measures that would allow us to understand how the sector is doing and, importantly, how it is doing compared to the sector in other parts of the world. That is absent from the Government’s document.
I largely agree with Daniel Johnson’s point about data, and I will come on to that. However, I am citing international opinion and John Bird, the co-founder of The Big Issue, to demonstrate that they are not just my words or those of the Scottish Government and that we have well-respected validation of what we are doing here in Scotland.
On data, members will be aware that we have some good baseline information in the “Social Enterprise in Scotland: Census 2015”. One of our actions is to fund Community Enterprise in Scotland to rerun the census this year, which it will do in collaboration with a wide variety of partners. It is crucial that we are able to compare and contrast data over time. Perhaps we should also look at how to extend the census because, as I said, I agree on the point about data.
In the actions that I announced today, we are committed to establishing a social measure of social impact, because it is important that we have holistic measurements and that we can compare social enterprises not only the length and breadth of Scotland but internationally. I assure members that that work is on-going and that we very much recognise the importance of hard data. However, the fact that there are 5,000-plus social enterprises, that 200 new social enterprises are formed every year and that 42 per cent of our current social enterprises formed in the past decade points to our doing something right as a Government. Perhaps it would have been gracious to acknowledge that.
Many of the new social enterprises have been formed in the Highlands and Islands, which is an area that the cabinet secretary has omitted to mention so far. Will she explain why Highlands and Islands Enterprise is not included in the strategy? Will she speak to the First Minister, who is sitting next to her, to tell her that she should abandon plans to centralise it?
I make Mr Rennie aware that Scottish Enterprise and Highlands and Islands Enterprise were fully involved in the development of the social enterprise strategy. I politely remind members that the strategy was co-produced. I did not write it by myself in splendid isolation in St Andrew’s house; rather, it was led by the sector, which consulted widely. There were many roundtable events. There was a focus on rural communities and people from the black and minority ethnic communities.
Will the member take an intervention?
No, I am running out of time, I am afraid. They participated in an innovative online consultation.
I stress that the strategy was led and developed by the sector and that Scottish Enterprise and Highlands and Islands Enterprise were fully involved in its development.
Will the cabinet secretary take an intervention on that point?
No, thank you.
I also want to emphasise two further points, which get to the core of Mr Rennie’s question. The role of social enterprise and the importance of supporting it will be emphasised in the strategic guidance letters to both those organisations. As we move forward to the second phase of the enterprise and skills review, which will be led by Mr Brown, he and I have certainly discussed what we need to do to consider fully the needs of social enterprise. I suggest to Mr Johnson that that is an example of good, solid, joined-up thinking.
In my brief time remaining, I will quickly mention funding and procurement. Public contracts in Scotland are among the most accessible in the world. As many members have identified, the public sector spends about £11 billion on goods and services. I highlight that we have a £2.3 million developing markets for the third sector contract. As some members have rightly highlighted, there are opportunities to do more, but we should not forget that the public sector has a good record in utilising public procurement, for example to create jobs and training.
Many members have mentioned funding. The purpose of the strategy and the forthcoming action plan is to anchor what social enterprise has benefited from over the past decade and what it needs to benefit from as we move forward: holistic support from a range of sources. We need to bear in mind that 54 per cent of social enterprises get more than half their income from trading.
Nonetheless, I highlight the fact that the Government has protected the third sector budget of £24.5 million and the £20 million empowering communities fund, which is an important strand of the people and communities funding and is all about strengthening and growing community organisations. At the start of the year, the First Minister announced the £29 million fairer Scotland fund. Nearly £10 million of that will be directed at developing the social economy. Also, nearly £19 million is available in the aspiring communities fund.
It would be completely disingenuous for members to suggest that we have not invested heavily in social enterprise or that we will not continue to do so, because we absolutely will. I was specific about the various funds that I announced today. I spoke specifically about seven actions, but perhaps it would be helpful if I made available the full list of the announcements that I made today, because I had time to mention only seven of 20-plus actions. That will give members confidence about the breadth and depth of the actions that we are taking and the various funding streams.
There has never been a better time to go social. We are on the cusp of becoming a social enterprise nation. We have more to do, but it is vital that we celebrate and acknowledge the success of the world-leading social enterprise sector in Scotland, which benefits communities the length and breadth of Scotland. We will all endeavour to build on that success.