Scotland’s more- than-profit sector generates over £2 billion
Community Enterprise in Strathclyde report documents explosion in social economy
Scotland’s booming more-than-profit sector pulls in a massive £2 billion a year and supports 100,000 jobs, according to pioneering research by development organisation Community Enterprise in Strathclyde (CEiS).
In the first study of its kind in six years, CEiS has quizzed thousands of voluntary and third sector organisations across lowland Scotland on a range of topics – from income level to service delivery.
The findings of the Revaluing the Social Economy report show that the social economy has gone through an explosive period of growth in the past six years, doubling in size. There is also significant evidence of an entrepreneurial culture developing within the sector, with around 75% of organisations keen to grow and expand their activities – considerably more than the 55% of SMEs in the private sector who share the same ambition.
This entrepreneurial drive was demonstrated in the survey, with more and more organisations becoming involved in delivering services which had been the preserve of the private or public sector in the past, such as leisure services, child care and elderly care.
CEiS chief executive Alistair Grimes welcomed the findings of the report and urged government agencies to help the sector fulfil its potential.
He said: “This report has come out at a critical time for the social economy, and there has been a good deal of debate recently about the role and function of the sector.
“A strong social economy has a significant contribution to make to the wellbeing of Scotland – by providing greater employment opportunities, new thinking on ways to tackle particular problems and improving public services.
“The voluntary sector has a wealth of expertise in identifying where there are gaps in provision and services, and Revaluing the Social Economy shows that organisations throughout Scotland continue to find innovative ways to nurture enterprise and innovation, particularly in the poorest communities.
“However, a number of issues regarding funding were raised during the survey process, and, while it is heartening to see the growth of the sector, it is important that these issues are addressed by the main funding bodies at government level.”
Issues raised by the report include:
• There is a greater tendency for short term funding for specific issues, and annuality of funding continues to be a problem;
• Funding is increasingly being given only for salaries, with no contribution to overheads;
• Organisations are feeling under increased pressure to generate more of their own funding – mostly through charges for services
Alistair Grimes added: “The scale and growth of the sector since 1997 demonstrates that the talent is there.
“However, it is vital that funding is delivered in sensible ways in order to encourage the right kinds of people and ideas into the sector. Only then will the social economy maintain the kind of development it has experienced in the past six years.”
In 1997, CEiS published its Valuing the Social Economy report. The focus of the study was the impact of social economy organisations on the economies of disadvantaged communities in lowland Scotland. It found that:
• The social economy operated on a substantial scale, with 3,700 organisations employing 42,000 people and engaging 60,000 volunteers;
• As part of this process, it generated an aggregate annual income of around £1 billon;
• A significant number of its employees and volunteers were residents of more disadvantaged areas or members of socially excluded groups;
• The services delivered impacted disproportionately on the same disadvantaged communities and socially excluded groups of the population.
The incoming Labour government of 1997 introduced a range of policy initiatives which created opportunities for the social economy to make a more significant contribution, including a greater emphasis on tackling social exclusion, the introduction of the various New Deals, the introduction of the Social Justice Milestones in Scotland and a generally increased focus on exploiting different types of organisations to tackle a range of problems.
These changes prompted CEiS, in association with the University of Glasgow, Communities Scotland and the Scottish Executive, to undertake this latest research in order to determine how the sector had developed.
CEiS is the largest development organisation working with the social economy in Scotland. It was established in 1984, and currently works with around 70 organisations each year to create or sustain jobs and to develop services.
Issued by the BIG partnership on behalf of CEiS
For more information, please contact:
Gavin Cameron, the BIG partnership 0141 333 9585