Influence View from the Chair

Valuing social enterprise

21st Feb 2023

Across Northern Ireland, social enterprises are positively contributing to life and work in a huge variety of innovative ways. The sector’s reach is wide; social enterprises operate and undertake trading activity in almost every sector; from education and training, to retail and hospitality, environmental services and lots more.

Social enterprise has a two-fold impact; not only does the sector make a significant economic contribution, its social impact makes an important difference to lives and communities. A 2019 report by Social Enterprise NI confirmed that directly and indirectly, the sector supports almost 25,000 jobs. At NI Chamber we respect the sector, value the contribution it makes and believe its future growth and sustainability should be a priority for policy makers.

A social enterprise is like any other business in that it works to deliver goods and services to make a profit. The difference is that they are driven by their social and environmental purposes and any profit made is reinvested towards achieving these purposes. When a social enterprise turns a profit, many people in the community benefit.

Right now, lots of the challenges facing social enterprises are the same as those impacting private sector firms; inflation, energy costs and price rises across the board are all significant factors. However, it is important to recognise that social enterprises face additional challenges in that reduced profits and diminishing returns mean less impact, less support provided to those marginalised in society and less support for those furthest from the labour market. In effect, social enterprises face a business challenge on two fronts.

Whilst the social enterprise business model is based upon trading and generating income, a significant number of larger social enterprises have European Social Fund (ESF) funding at their core. The loss of ESF funding is a huge issue for many, as the UK Shared Prosperity Fund is not in reality a like-for-like replacement. Many of our members operating in the sector have voiced real concern that as a consequence of losing this funding, supported employment groups will face insurmountable issues, which creates risks to the job security of some of the most vulnerable in society.

The social economy is recognised, to an extent, within the Department for the Economy’s 10x Economy document. However arguably, its relatively short inclusion does not reflect the strength within the sector and how it can deliver real impact to support those with the greatest need.

For many years, the social enterprise sector has called for a Social Value Act and there is widespread support for that from within the business community. I know the pursuance of social value legislation, similar to that which exists in England and Wales is a real focus for our colleagues in Social Enterprise NI but as it stands, with no functioning Executive at Stormont, progress is stalled. Some welcome progress was made last year with the introduction of social value scoring in government contracts, but further necessary reform has been halted.

The sector must be prioritised and taken seriously; helping social enterprises to grow sustainability and operate at scale has circular benefits which benefit everyone in society. Profit with purpose has an important role to play in a rebalanced economy. Delivering on what’s needed will require a partnership approach between government, business and the sector; all can be assured of NI Chamber’s support.