The devolution agenda and pressure on public sector budgets could offer real opportunities for social enterprises in the North East and these businesses could provide an engine for growth in the region, according to North East Social Investment Company Chairman, Andrew Mitchell.
The Social Investment market is growing across the UK and has increased by 25% in the last 12 months. Social Enterprises can provide innovative ways of delivering crucial services to society. They generate economic benefits, create employment and make profits but they also deliver social impact and outcomes, it is this marriage of economic and social benefits that is being hailed as an exciting solution to some of the challenges being faced by the contraction of funding for Local Authorities.
North East Social Investment Company (NESIC) has been set up to help stimulate the market for social investment in the North East, in order to create social change and help create a climate in which it can thrive. NESIC has appointed Northstar Ventures to manage its first fund, the £9 million North East Social Investment Fund, which has already supported two social investments in the region. The first was the Fair Chance Fund which focuses on providing accommodation, training and counselling for vulnerable young people and has so far helped 160 youngsters through the project operated by Home Group. The second provides funding for the Sunderland based Substance Misuse Recovery Service, which has a project to prevent offenders relapsing into drug and alcohol misuse and is being run through the charity Achieve with NERAF.
The North East Social Investment Fund was established in partnership with Northern Rock Foundation, Big Society Capital and the Esmee Fairbairn Foundation.
Commenting on the role of the North East Social Investment Company Andrew Mitchell said,
“The investment being made in social investments is not just about social enterprises scaling up; it is also about how social investment can play a part in the delivery of government and local government services. In the face of challenges to funding and the devolution agenda, we need to be innovative and intelligent in the delivery of services in fields such as health and social care and social enterprises are well placed to do this; we want social enterprises to help transform the landscape”
“There is huge opportunity to shift how public services are delivered through a different ownership models that the public will trust – we are looking at businesses that are experts and specialise in particular services but who are also entrepreneurial whilst maintaining their commitment to delivering social benefit.
“If social enterprises are owned by the public sector, in general they are subject to too much red tape and they are not able to be enterprising enough. If they are passed to the private sector the pressures on them to make a profit can at times mitigate against their social objectives. Social investment models can offer the best of both worlds with ownership structures which reflect the interests of all stakeholders and cannot be bought out by large multinationals”
Social Enterprises are set up in a number of different ways including cooperatives and mutuals but the themes that underpin the businesses remain the same. They are not private companies that can be bought or sold, they are the property of the staff and the stakeholders whilst delivering social impact, they are also established on a sound entrepreneurial foundation where staff are rewarded and profits are generated to plough back into the business.
The North East Social Investment Company will be lobbying to raise awareness of the benefits of social investment and work to ensure organisations understand how they can benefit from funding through the North East Social Investment Fund, or access information or mentoring about how to become social enterprises.
Andrew Mitchell concluded:
“In many cases social enterprises could achieve greater social impact if they were able to expand existing goods and services, take up new opportunities and reach scale. To do this, they need access to the finance they require “social investment” that is what NESIF can provide and that is what we believe will help transform the delivery of services in the next 10 years”.