Social enterprise and third sector activity have mushroomed into a prolific area of academic research and discourse over the past 20 years, with many claiming their origins rooted in Blair, New Labour and Giddens’ ‘Third Way’. But many academic contributions lack experience of policy implementation and do not access the wealth of grey, legacy and public policy literature from earlier periods which supports different interpretations. Since most make few references to developments during the 1970s and 1980s, their narrow focus on New Labour from 1997 onwards not only neglects real antecedents, but miscasts the role of social enterprise. Adopting a Critical Realist approach, the author had access to previously unused hardcopy documents from archives and collections and interviewed key players and key actors between 1998 and 2002, when major social enterprise and third sector policy changes occurred. During a key political period from 1998 to 2002, Blair’s New Labour governments forced through a major conceptual shift for social enterprise, co-operative and third sector activity. Many structures, formed as community responses to massive deindustrialisation in the 1970s and 1980s, were repositioned to bid against the private sector to obtain contracts for delivery of low-cost public services. Other UK academic contributions draw parallels with North American individual social entrepreneurs or rely excessively on interpretations from L’Emergence de l’Entreprise Sociale en Europe (EMES) Research Network, which prioritises a marketised version of “work integration social enterprises” (WISEs). So the restoration of political and economic democracy has been denied to many local communities.
Top-down local area policies in response to urban deprivation forms a context for the growth of indigenous local organisations in the 1960s to 1980s. Little direct government funding was available to communities, with most support from private foundations and European funds, later using inspiration from American and European community structures. Most community organisations were created through market failure and massive job losses and were very different from their later counterparts which accepted market discipline within a competitive new role from government. The Industrial Common Ownership Movement (ICOM), the 1976 Industrial Common Ownership Act and 1978 Co-operative Development Agency Act provided a platform for growth of more than 2000 common ownership structures, with support from Beechwood College, Leeds. In 1981 Beechwood provided a Social Audit Manual as a more comprehensive social enterprise manifesto than the think tank, Demos, sixteen years later. Gradual marketisation, promoted by the National Council for Voluntary Organisations (NCVO) and through the creation of ‘quasi markets’ was followed by a range of Demos think tank proposals. NCVO’s Deakin Commission recommended a contractual relationship between government and the voluntary and community sector, which was also recommended by the 1993 CENTRIS Report. All this formed the basis for New Labour’s further marketisation of the voluntary, community and social enterprise sectors to engage in competition with the private sector for delivery of public services.
Analysis of UK academic contributions which rely on North American nonprofit models and an interpretation of market-oriented Work Integration Social Enterprises (WISEs) from mainland Europe. Through their exclusion of significant French, mainland European and Canadian literatures on a wider social economy, UK discourses on social enterprise and third sector development have been dominated by the market. UK contributions rarely mention earlier social and solidarity economy approaches to deindustrialisation, job losses and the development of third sector policy elsewhere, including French Regulationist and social solidarity approaches from organisations like CIRIEC from the 1970s onwards. Since these approaches and interpretations were contemporaneous with the growth of UK community indigenous structures, with appropriate academic support and interpretation, these might have formed the basis of a UK social economy. Detailed reviews of literatures and discourses are provided, showing that most UK literatures feature contributions from New Labour onwards and neglect appropriate antecedents. A detailed timeline of US, mainland Europe and UK developments is provided.
Introduction, explaining chapters and the author’s questioning of the dominant academic interpretations of UK social enterprise policy development. Initial overview of themes throughout book, including other academic contributions’ undue reliance on North American and mainland European marketised structures, their neglect of previous UK indigenous structures and failure to synchronise voluntary, community and social enterprise developments, the political and economic significance of New Labour’s policy shift from co-operatives to social enterprise, the unreported role of academic and third sector policy entrepreneurs and the reality of social enterprise policy driven by third sector organisations themselves.
Details of the author’s use of Critical Realism and appropriate procedures for the avoidance of bias and distortion on account of his personal involvement. Patterns or demi-regularities are traced, leading to abduction and retroduction, thus enabling movement beyond rational choice explanations to identify a political and economic structure as a relevant causal mechanism. Description of research design and methods used, including interview sampling and a programme of interviews and ethics procedures governing interviews, data collection, a focus group of key players, including interviewee anonymity and approval of transcripts.
Apart from strong influence from North America there has been excessive reliance in many UK contributions on the interpretation of social enterprise by the EMES Research Network. The EMES WISE model descends from third sector structures which have traditionally delivered public services in many European countries. These marketised models now form a dominant discourse for an EMES emphasis on market models, which for the UK has meant the marginalisation and neglect of other mainland European contributions on the wider social economy. Mainland EU governments and EU third sector organisations have pressed for EU funding to supplement Active Labour Market Policies (ALMP), for which Christian Democrat governments faced funding difficulties. Many UK contributions show limited knowledge of ALMP funding and the politics of Christian Democracy so that pressure from the third sector for welfare reform and EU funding has been omitted from many other UK contributions. All this has contributed to further misunderstandings about the EMES WISE model. Further UK misunderstanding may arise through UK exclusion under Thatcher and Major governments from Jacques Delors’ initial projects as President of the European Commission from 1985 to 1995 to progress an EU Social Chapter. This exclusion may have contributed to some UK contributions’ underestimation of the significance of EU member states and the third sector seeking EU funds. The UK has never recovered lost ground after exclusion from these initial discussions.
Social enterprise structures are unable to maintain their values in a changed funding environment and academic contributions have failed to analyse the social economy as a means to advance alternative forms of local economic democracy. In a major paradigm shift, social enterprise and the wider third sector have been institutionalised as a neoliberal agent for public service delivery, increasingly based on social investment, with a shift from politics to practical solutions. They are now part of the welfare state and no longer necessarily considered as critical to democracy or economic development. UK social enterprises are now fragmented, small and undercapitalised and unable to meet social welfare expectations, with public and social values replaced by value for money and cost of delivery. Further research is needed on the effects of increasing participation in procurement competitions by social enterprises and third sector organisations, which through their dependence on contract funding are being hollowed out. Alternative future policies are suggested including Public Social Partnerships, funding for local economic democracy and public innovation funds for public and third sector partnerships. A new funding focus is needed on community energy, recycling and local co-operative development in an endeavour to restore local economic and social democracy to form the basis of a UK social economy.
New Labour governments presided over a major political rupture with the Co-operative Movement, which is not described elsewhere. Labour discarded democratic, co-operative and mutual structures in favour of individually controlled social enterprises which could be used for flexible, low-cost public service delivery. Interviews with key players show these tensions laid bare in ways which other commentators have missed. In a major political difference between the Labour and Co-operative Movements through a shift to looser definitions for the third sector, New Labour’s policy change was as significant as its abandonment of its 1918 Clause IV of the Party’s Constitution in 1995. New Labour sought to transpose 1970s and 1980s social enterprises and local community organisations within a strategy to reduce public expenditure. Because the democratic accountability of earlier co-operative, mutual and community structures would have limited their acceptance of repositioning and changed roles, New Labour encouraged new legal structures with reduced accountability. Other contributions have underestimated the significance of this shift away from common ownership structures promoted by the Industrial Common Ownership Movement (ICOM) as the genuine antecedents of today’s social enterprises. The inauguration of Social Enterprise London, the Social Enterprise Coalition, the DTI Social Enterprise Unit and legislation and proposals between 1998 and 2002 formed a basis for UK social enterprise policy for the next twenty years.