As the long-awaited economic recovery begins to take hold, it is clear that community co-operatives and start-up social enterprises have an important role to play.
Owned by local people, they are well-placed to respond to the needs and unique business challenges of the communities they serve.
I know from my experience as a Co-operative MP, and by working with co-operatives in my constituency that community ownership makes a difference – incentivising them to invest in local jobs, skills and training, as well as in wider community infrastructure. Their focus on added social value makes them excellent catalysts for wider economic development, as the Report of the Welsh Government’s Co-operative Commission recently recognised.
Disappointingly, the added value of the social sector seems to be lost on the local enterprise partnerships (LEPs), which were created to support it.
The Partnerships were created by the Coalition Government 3 years ago, and tasked with taking on many of the roles and responsibilities of the now abolished Regional Development Agencies, including providing advice and technical support to start-ups. They have a longer-term role too, working with local businesses to set strategies for wider economic regeneration in some of the most deprived parts of the UK.
Last year, the Business Innovation and Skills Select Committee identified a number of blind spots in the governance and focus of LEPs. In particular, they expressed concern about the lack of balance and diversity on their boards, which they found were dominated by voices from traditional private businesses at the expense of social enterprises.
These concerns are borne out through my own contact in recent months with small and large co-operative organisations across the country. Many have told me that they are struggling to engage with or understand the LEP process.
Mark Sesnan, the CEO of Greenwich Leisure, a community-owned co-operative which runs 115 sports and leisure facilities across the UK, said he was “amazed at how little understanding there was of alternative business models” at one London LEP he worked with. Others have expressed frustration that the partnerships lack sufficient understanding of the unique challenges faced by socially-driven start-ups, nor the expertise to support them.
The result is a playing field that is strongly tilted against the social sector at a time when its contribution is needed more than ever.
This week I’ll be introducing the ‘Co-operative and Social Enterprise (Development) Bill’ into Parliament. The Bill will guarantee the social sector a voice by requiring LEPs to have at least one board member who is a social enterprise business specialist. It will also ensure that co-operatives and social enterprises are put at the heart of longer-term strategies for economic regeneration, requiring them to make specific reference to the development of community co-ops and social enterprises in their plans.
I believe these small steps will help to ensure that co-ops and social enterprises get the support they need from their local enterprise partnerships, enabling them to grow and thrive.
More significantly, giving social enterprises a strong voice will ensure that their wider ethos of social value, democratic control, ethics and sustainability are put at the heart of plans for regional economic development – ensuring a recovery that works for us all.