How to Make a Million Jobs – Colin Crooks
Ladies and Gentlemen,
It is a pleasure to be able to speak here today at the launch of a new book by Colin – and I have to say the subject matter could not be more timely.
Although economists have been puzzled by the recent data, it does seem clear that despite the strong economic headwinds we have been operating in, employment has been far more resilient then we have expected.
But despite this, reducing unemployment remains one the most important challenge this Government faces.
Because unemployment is not just an economic problem, although it does have significant economic impact. It is also a social problem. Having millions of people without work, without an independent source of income causes a variety of problems, from poor health to problems of family breakdown.
Unemployment data is not just a set of statistics, it is a millions of personal stories and each one of these stories means something not just to that individual, but to the wider community.
We have a moral duty, not just an economic one, to try and bring down that figure of unemployment and to stimulate the labour market.
As the Chair of the All Party Parliamentary Group on Social Enterprise, you’ll not be surprised therefore, if I say that I believe that social enterprise holds the key to making our labour market more sustainable.
There is sadly a belief amongst some commentators and policy makers, that social enterprise is one of those things which you talk about during the good times when there is plenty of money to be thrown around and a certain optimism in government to try new things, but not something that you consider when the chips are down and you are facing tough times.
I believe exactly the opposite. Social enterprise is something that we need to consider now, in the midst of the tumult, so that we can correct the failures in our economic system and create a long term path towards sustainable growth.
Leaving social enterprise till after the economic situation has improved will leave our system with the same weakness and the same structural flaws that got us into trouble in the first place.
Social enterprises have number advantages, I believe, we need to take advantage of in this current economic situation.
Firstly, because of their social and environmental mission, they tend to hire more people relative to turnover than traditional private sector businesses. Recognising the social benefits that employment can bring, social enterprises go the extra step to get people into work, to train them and to make them more competitive in the labour market. Not only does this have social benefits, but it also has long term economic benefits.
A consumerist capitalist economy can only succeed if there are consumers, and it can only be sustainable if those consumers have an independent source of income. By creating more jobs, they ensure that there is more demand and by creating demand, they create the environment for business to grow.
Secondly, social enterprises often operate in some of our most disadvantaged communities – the places where growth are hardest to achieve and where unemployment is often the deepest rooted. Despite this challenge, however, social enterprises are growing and they are growing rapidly. The last social enterprise survey saw turnover rising and more social enterprises expecting growth relative to traditional small and medium sized businesses.
The fact that social enterprises appear to be succeeding where the private sector has traditionally failed shows the potential that social enterprise has and this is a potential that should not be squandered.
Finally social enterprises are more innovative. They are able to think outside of the usual paradigms of traditional private sector businesses and are thus able to do things that other organisations would not even consider. The profit motive, far from making businesses risk takers actually makes them risk adverse. They would rather make money from products that they know have a track record of success then trying new things. They would rather rely on methods that have been tested then those that have yet to be tried. They would rather treat their customers in the same ways they have always done then to try and experiment.
Social enterprises do not, in my experience, suffer from this caution. They are out there to make a difference and this means taking risk, trying out new ideas and engaging with local communities in new ways. These are risks with a purpose though, to benefit society and to create wider social value.
On entering Parliament, I wanted to do what I could to support these social entrepreneurs and to support our local communities. As a local councillor, I had seen firsthand the important contribution that charities and social enterprises can make – through creating jobs, reaching out to vulnerable parts of our community or improving our environment. I wanted to help them, as they helped others.
So I introduced, and got passed, a new law – the Public Services (Social Value) Act 2012.
This Act will give social enterprises and charities, a better chance of bidding for services by allowing public bodies to consider the social value they create, within the traditional value for money framework and asking them to think about how they can improve the well-being of their community.
I believe that this will enable more social enterprises to win business and to get access to the £230 billion that the public sector spends each year on goods and services. Already this approach is being adopted by local authorities, hospitals and other public bodies across the country – but this Act I hope will act as a catalyst and push the public sector towards a more holistic consideration of how they improve the well-being of our communities.
The Act is due to be implemented in January 2013, and I will be continued to raise the profile of this Act and to seek to challenge commissioners on how they tender public service contracts.
However part of that is to spread the word about the positive difference that social enterprises can make. This is what I hope to do as Chair of the All Party Parliamentary Group on Social Enterprise.
But we need support and books like Colin’s, I believe will help us to make the case and to show why we need social enterprise to be at the very heart the economic agenda. I am glad to be able to support his book launch tonight and I hope there will be others like them in the months ahead.