The modern social and community enterprise movement in the UK grew in the 1970ís on the back of a relationship with urban regeneration, and was inspired by experience in the United States. From the late 1970s onwards, a number of public authorities and agencies in Scotland (Highlands and Islands Development Board) and elsewhere, set up substantial initiatives to establish and support community enterprises. While they may have declined in the economic upturn of the early 1990s, the advent of the Single Regeneration Budget (SRB) and EU funding appears to have brought renewed growth. SRB partnerships are among the many agencies now which offer financial and practical support, both to generate new starts in the sector and to help the survival and development of existing enterprises.
There is no information on the overall success of community enterprises and the agencies supporting them. There are a handful of long-lived and well-known success stories such as Coin Street Community Builders in Central London and the Liverpool Furniture Resource Centre. However, the sector as a whole may have low survival rates because of inherent fragility or unprofitability, a lack of a commercial approach, or they donít attract enough entrepreneurial talent and commitment. (This is probably true of ordinary commercial start-ups- which also tend to suffer from financial insecurity, shortage of key skills and high closure rates in the early years.) This doesnít make community enterprise as a whole a bad thing, it just means it is probably better to rate individual enterprises on their survival chances and their potential contribution to local economies. A winning idea has been Community Credit Unions (CCUs). They are the fastest growing and most prevalent form of community enterprise in the country (from 50 in the mid-1980ís to nearly 600 at present) with 41 new unions registered alone in 1997 with the Registrar of Friendly Societies. Total membership is now over 190,000.
Three defining features distinguish social and community enterprise from the private sector:
Thus they engage in a commercial activity, directly or indirectly producing goods or providing services, for which they charge, and the income is their main (if not only) source of money. This distinguishes them from trusts, charities, voluntary and community groups that are funded through donations or grants rather than trading. Here are some of the different types of community enterprise (see COMMUNITY ORGANISATION AND ACCOUNTABILITY for Development Trusts):
COMMUNITY BUSINESSES are owned and controlled by local communities, generally through a board of directors, which in turn is accountable to a wider group. They aim to provide jobs and training for local people, particularly those with low skills or poor access to the conventional labour market. Many operate in sectors like construction, security and caretaking, which provide openings for people with few qualifications or none. Others provide Intermediate Labour Markets or other schemes to help the long-term unemployed and other disadvantaged workers. Many trade in goods and services which neither private enterprise nor the public sector offer in the immediate area, but which contribute to the welfare of the local community and/or the wider public interest. These may be:
COMMUNITY CREDIT UNIONS are savings and loan co-operatives that are set up for the mutual benefit of all its members, who are normally all resident in one particular area. It is a non-profit-making, voluntary organisation that is registered with the Registrar of Friendly Societies. CCUs have average assets of about £60,000 with average membership of 220. Many CCUs operate in poor areas where it is more difficult to operate compared with a work place or employer-based credit union. A large proportion of the adult population does not have a bank or building society account, and their accessibility anyway is poor in both inner city and rural areas. People on low incomes cannot get loans from banks or building societies due to their lack of collateral. This makes them particularly vulnerable to loan sharks. CCUs address these problems by providing a local, user-friendly, savings and loan institution. Members apply for loans to the credit committee, which will take into account the purpose of the loan and the applicant's savings, borrowing and repayment record (CCUís offer considerable opportunities for volunteering - Nelson CCU, with 1,000 members has over 40 volunteers helping run it). Loans may be made for any good purpose: typical examples are a new cooker, a holiday, unexpected bills, or to cover the costs of starting employment or self-employment (although CCUs cannot lend to businesses, the individuals to whom they make loans may be the owners/managers of small businesses).
LOCAL EXCHANGE TRADING SYSTEMS (LETS) encourage economic activity in an area by creating credit which members of the scheme can use as currency when trading among each other. There are over 300 schemes in the UK. The units of account usually equate to £1, such as the Bricks used in a scheme in Brixton. If the going rate for a job is £10, the quote will be 10 Bricks. The essential features of a LETS are:
In some cases payment for a service is in a mixture of LETS credits and money. A decorator may be prepared to have his LETS' account credited for his labour, but will need cash to buy the materials. LETS have the potential to combat social exclusion by offering residents of an area the opportunity to re-enter, or enter, the world of work on a small scale, building up their skills, self-confidence and networks. Existing LETS are well used by unemployed people. For a partnership, there will be broader benefits from recycling resources within the community, building capacity and community cohesion.
Mark Fisher - Permaculture Design course handout notes-top