Tag Archives: Social Enterprise London

No future

“But why don’t those social enterprises take young people on anyway if they have genuine jobs to offer? The answer is economic. Social enterprises still struggle to attract mainstream investment so they are often undercapitalised and their restricted growth means that taking on skilled staff is a process undertaken carefully, and long-term unemployed young people with limited skills pose too great a risk.” 

Social Enterprise London(SEL)’s chief executive, Allison Ogden-Newton, explaining the impact of the premature demise of the Future Jobs Fund (FJF), an apparently successful but relatively expensive New Labour initiative to tackle youth unemployment. Under FJF, employers received funding from the Department of Work and Pensions (DWP) to pay young people aged under 24 at least the minimum wage for 25 hours a week for 6 months.

SEL’s Future 500 scheme enabled 164 social enterprises, including Social Spider, to employ young people through the scheme. As government funding schemes go, there was a phenomenally low level of bureaucracy involved, leaving social enterprises to focus on the challenge of offering unemployed young people what – for many – was their first experience of paid employment.

FJF was scrapped in June 2010 as the new coalition government offered an early declaration of its intent to make major cuts in public spending. Since then, youth unemployment has been rising and, in January this year, economist David Blanchflower noted that the number of unemployed 18-24 year olds reached 951,000, the highest number since comparable figures were first available in 1992.

As mentioned here, I don’t think it’s useful to claim that there’s a direct causal link between youth unemployment and the recent bouts of civil unrest in our city centres. Where there is a direct causal is between the current difficulties faced by young people looking for work and what Blachflower describes as ‘the danger these youngsters will become a lost generation’.

Blanchflower explains some of the reasons why young people are doing disproportionately badly in the current grim economic circumstances: “First, because firms operate last-in, first-out rules. Second, and more important in this recession, firms have cut hours and shifts and stopped hiring, including in the public sector, which of course hits the young hardest. It isn’t their fault.”

It’s difficult to blame employers for doing their best to continue to employ people they employ already when times are hard. The problem is that this makes an already difficult situation even more difficult for young people leaving school, college or university and trying to find their first job. The likely result is, as Blanchflower speculates, that (a substantial chunk of) a generation young people will miss out an early experience of the world of work meaning that, while most of them will work at some point, they may never catch up in terms of wages and career prospects. This is especially unfair given that they’re even less responsible than most of us for screwing up the economy in the first place.

Politicians of all parties have always been happy to rock up at an inner city community centre to bemoan a creeping moral decline linked to a pervading culture of worklessness, while happily explaining how whichever project they happen to visiting is doing such a great job of changing this dismal outlook in the local area. The fact that this rhetoric continued through years of relatively high employment may have partly served to mask the present horror. Either way, things are now officially really bad and many local projects are beyond political visiting.

Last year, Iain Duncan Smith, secretary of state at Department of Work & Pensions explained that is was ‘a sin’ for benefit claimants to fail to take up jobs. Unfortunately, there is not currently same the clarity from the government about its own responsibilities to young people looking for work.

Given what’s happened since, the abolition of the Future Jobs Fund is looking like an increasingly reckless step. So far, it doesn’t seem like any elements of the new Work Programme will offer similar low-bureaucracy, high impact methods of getting young people into work. Social enterprises are ready and waiting with the energy and ideas to help some of the nearly 1 million unemployed 18-24-year-olds break into the job market (as opposed to JD Sports). What we’re short of is cash.

While it seems unlikely that FJF will return in exactly the same form, something along similar lines – perhaps with the DWP paying a lower percentage of wage costs or focusing support on particular areas – seems increasingly vital.

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The sector’s not for burning

“And where the bloody hell are the leaders of the so-called ‘social enterprise movement’ whilst all the hard won gains made over many years are being wiped out on the ground? They appear naive and way, way out of their depth. Dare they publicly take on a government which still pays most of their bills?”

Anyone who was previously uncertain about former Fifteen boss and Social Enterprise Ambassador, Liam Black’s view on the current performance of social enterprise leaders will now have had that uncertainty conclusively removed.

Before reaching that storming conclusion, Black makes a number of points that I strongly agree with. The central one being that there’s a massive gap between Big Society rhetoric about supporting organisations that help communities to help themselves and policy decisions that see organisations who’ve got a strong track record of successfully doing that go to the wall.

And while Black’s comparison between the work of a practically useful social enterprise under threat in the current climate and the work of social sector innovators may lean towards caricature: “His is not a sexy enterprise, it is not digital, he doesn’t get invites to drink white wine at Nesta or Big Society Network love-ins with the social innovation intelligentsia.” he is right to identify a climate in which it’s become easier to find funding to have exciting but often fairly abstract ideas about how to deliver positive change in the future than to get hold of the resources to actually help people right now.

That’s not the fault of Nesta or the Big Society Network – supporting new ideas is what they’re there for – but the social impact of new ideas generated is going to be greatly reduced if, by the time they’re ready to be rolled out, there are no delivery organisations left with the capacity and support within local communities to be able to do that. Volunteers will not plug that gap, as Social Enterprise London‘s Allison Ogden-Newton – who I assume is not amongst those Black believes to believes to be ‘fiddling while Rome burns’ – has consistently been pointing out for months and months.

Where I disagree with Black’s analysis is in his criticism of leaders of the social enterprise movement. Regular readers will know that I have a long track record of criticism of social enterprise over optimism – both in a general sense and in relation to the current government’s agenda. Here’s what I thought of last June’s post-election backslapping session with the new administration. Here’s my thoughts, just over a month later, when considered observers ought to have had a fairly clear idea of what was likely to happen next.

But given the situation as it is now I’m not sure what exactly Black would like leaders of the social enterprise movement to do. It is undoubtedly true that existing successful social enterprises are not receiving the resources they need to continue to deliver their much needed work. It’s also true that, whatever the Big Society Bank ultimately does do, it won’t provide investment on the scale necessary to deliver the level of new activity that politicians expect – and it won’t do anything at all to replace lost revenue from delivering contracts that the public sector is no longer commissioning.

I’m not sure how these unpleasant truths would be significantly altered by social enterprise leaders either publicly denouncing the government and/or setting themselves on fire on the steps of the Cabinet Office. Most of us are in social enterprise partly because we recognize that once governments have been (legitimately) elected and political decisions have been taken (with honourable intentions), there’s still an awful lot up for grabs in terms of what actually happens – and whether people get a relatively good deal or a relatively crap deal.

The challenge is to present a positive case for social enterprise and socially enterprising activity, while also highlighting the practical examples of what’s being lost and the impact on people if these losses are not prevented. I think Social Enterprise Coalition chief executive, Peter Holbrook, was right in his recent interview with this blog when he said of the public sector mutualisation drive: “I think we need to remain slightly agnostic about whether the government’s agenda is good or bad but, what we need to do is if this agenda is going to be driven forwards, is to make absolutely sure that we are mitigating the risks and maximising the chances for success.

This is also the right approach in a wider sense. If social enterprise in the UK is going to survive and (hopefully) thrive in the UK we’ve all got a responsibility to spread and amplify both positive messages about what could happen and message of caution about what could be destroyed.



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