Governments’ ‘SROI fixation’ ignores sector experience, claims social impact pioneer

Governments’ ‘SROI fixation’ ignores sector experience, claims social impact pioneer
Jon Molyneux, Social Enterprise Magazine

The government is fixated with social return on investment (SROI) at the expense of other forms of impact measurement, according to a pioneer of social accounting.

The governments in Westminster and Edinburgh are jointly spending up to £750,000 on the development of a standard SROI reporting system for the third sector.

John Pearce, director of the Social Audit Network (SAN), said the move was ‘extraordinary’.

‘This is a huge sum of money to commit after very little consultation with the sector,’ said Pearce who, along with others such as Simon Zadek, a former development director at New Economics Foundation, pioneered work on applying social accounting to the social enterprise sector and penned the Social Audit Manual.

‘It also ignores a vast body of experience built up around social accounting and audit over the last ten to 15 years.’

Pearce was speaking to Social Enterprise ahead of the SAN annual conference, which takes place in Edinburgh on 7 November.

The main focus of the conference will be the launch of a report, authored by Pearce and his colleague Alan Kay, which claims there is potential for social audit and SROI to complement each other.

‘This shouldn’t be about one or the other. The two models can work together,’ Pearce said.

‘Where there are impacts which can be easily ‘financialised’, like people moving off benefits into work, by all means use SROI. But there will always be impacts which are difficult to attribute reasonably in this way. In these cases how people think and feel is important and social audit methods will be more appropriate,’ he added.

Pearce claims the conference comes at a boom time for social accounting.

‘We are currently seeing ever increasing numbers of organisations doing social accounting and learning about it,’ he said.

The SAN conference will feature contributions from the Scottish Government and Laurie Russell, CEO of recent Enterprising Solutions Award winners The Wise Group.

This article first appeared in Social Enterprise Magazine