SCVO Response to Government EU Operation Programme
The operational programme (OP) documents are incoherent in parts. They are contradictory in several places and use jargon and language that is inaccessible to most people. The ESF financial tables do not add up and use different sets of figures from previously published papers with no explanation or justification for the change. Different figures appear to have been issued to other stakeholders (HIEP) out with the public consultation.
This is a highly questionable consultation process which makes it difficult for us to comment as there is insufficient information provided for an accurate analysis. These problems alongside the prohibitively short timescale for responses will also mean the majority of the third sector has been unable to have their say on proposals.
The constant use of the term Social Enterprise is unhelpful and of great concern as its definition and use is widely misinterpreted. The European Commission acknowledge that there is a UK definition of social enterprise (UK Government DTI (2002) which is:
A social enterprise is a business with primarily social objectives whose surpluses are principally re-invested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.’
This definition is rather general and includes both the input to this specific kind of enterprise (e.g. provision of employment for vulnerable persons) and the output (e. g. goods and services that fulfil a certain need) is seen as social target
The European Union’s: Proposed Definition (2011) Article 2 Definitions For the purpose of this Regulation:
(a) ‘Social enterprise’ means an enterprise whose primary objective is to achieve social impact rather than generate profit for owners and stakeholders. It operates in the market through the production of goods and services in an entrepreneurial and innovative way, and uses surpluses mainly to achieve social goals. It is managed in an accountable and transparent way, in particular by involving workers, customers and stakeholders affected by its business activity."
The Commission does not require that there should be an ‘Asset Lock’ clause in an organisation’s constitutional documents before it is considered to be a ‘social enterprise’. It is essential that the Commission and UK broad definitions of social enterprise are applied to the OP and not the narrower, 5 criteria Senscot definition which is used by some parts of the Scottish government as this could lead to confusion and restriction of third sector organisations in the programme. The EC definition is closer to the true definition of social enterprise. Many “social enterprises” are registered as companies, others are in the form of social co-operatives, associations, voluntary organisations, charities or mutuals, and some organisations are unincorporated. Narrowly defined definitions based upon ill-informed perceptions must not prevail.