Labour conference: minister calls for tighter social enterprise definition

28 September 2009
by
Chrisanthi Giotis

'The definition, from a personal view, needs a bit of tweaking'

 

Angela Smith, third sector minister

Third sector minister Angela Smith says a tighter definition of social enterprise would help to allay suspicions from the left.

Speaking at a fringe event at the Labour conference yesterday, Smith said: 'Where there is criticism of the left sometimes is the definition of social enterprise is pretty broad.

'The issue I have slightly, and I'd like to do more thinking on, is the governance of social enterprises,' Smith told the event run by the National Council for Voluntary Organisations.

'The definition, from a personal view, needs a bit of tweaking,' she said.

Smith made the comments after a member of the audience said: 'Social enterprise sounds a bit Tory so how do you communicate to Labour activists and how do you get past that.'

While addressing the possible concerns of the left the minister also said that her discussions with the left and with unions had been nothing but positive.

'Where there is concern is if organisations are seen to be simply calling themselves a social enterprise. But it is possible to deal with those concerns and the co-op model is a great example.'

Co-founder of the Community Interest Company (CIC) Association John Mulkerrin, who was not at the fringe session, told Social Enterprise that the co-operative was the most recognised form in the social enterprise sector and seen as a safe option.

'What we really need is improved understanding of the different types of social enterprises and we hope the minister will include CICs in her thinking alongside co-ops,' said Mulkerrin.

'One of the main reasons the CIC legislation was brought into being was to help take social enterprise into the mainstream by providing a flexible and clearly defined structure.

'CICs have a regulator, an asset lock and annual reports submitted to the regulator, all of which provide assurance that social enterprise won't be use as a cynical marketing ploy.'

He added: 'By its very nature social enterprise is a broad church of individuals and organisations, tackling a multitude of tasks using many different operating structures, and like being British I think it's almost impossible to define beyond a certain point.'

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Comments

We all benefit from clarity

Submitted by alexlawrie on 5 March 2010 - 1:55pm.

New mind the left, I think anyone would accept that vague definitions don't help. The DTI's current definition suggests that a social enterprise is any business run by someone with good intentions. How do you know how good someone's intentions are? How do you know the same person will be in charge tomorrow? How do you know that they are not deluding themselves about their achievements? How do you know the business is not about to be bought by someone with bad intentions? How do you know that those good intentions are extended to all stakeholders and not just some?
Yes, the definition needs tightening. As a member of a co-operative CIC, I don't actually think it is about either co-operation or CICs: but it is definitely about ownership and control, and the minimum standards we need to set for both.

Social Enterprise Defined

Submitted by rahul on 12 December 2009 - 2:07am.

A clear, concise, highly readable definition of social enterprise can be found by reading The Tao of Social Enterprise.

What's a social enterprise?

Submitted by KateWhittle on 30 September 2009 - 3:55pm.

For me, there is a third element which is sometimes missing from social enterprises - social ownership. It's important of course to be commercially viable, and to be focused on social aims, but if the enterprise is not democratically accountable to the community it is located in or to the beneficiaries of its activities then it is not sustainable either financially or socially. Co-operatives and CICs can both demonstrate that assets are secured for the benefit of members or the community, so are more easily identified as true social enterprises.

Kate Whittle
Somerset Co-operative Services CIC
http://www.somerset.coop

What's a social enterprise?

Submitted by Matthew on 30 September 2009 - 1:05pm.

There is huge ignorance about social enterprise, both within the Labour Party and more significantly, outside amongst the general public.
Most people have no idea what a social enterprise is or how it differs from the public and private sector. Hence the question at the fringe.
Liam Byrne's comments elsewhere on this site appear to want to confuse social enterprises with public services - they are not the same. Social enterprises seek to make a profit, for the benefit of the specific community they serve.
Rather than getting bogged down in a rather arcane debate about structures, surely the challenge for social enterprises - whether co-ops or CIC's (preferably both) - is to make a lot more noise about their different way of doing business and how they benefit their communities? This becomes even more urgent with a potential change of Government.

Matthew Finnegan
Sound Communication CIC
www.soundcommunication.org.uk