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Session 2003 - 04
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Standing Committee Debates

Social Economy in Northern Ireland

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Northern Ireland Grand Committee

Thursday 29 April 2004


[Mrs. Marion Roe in the Chair]

2.30 pm

The Chairman: Before we begin, I should say that Members may remove their jackets if they wish.

Mr. David Trimble (Upper Bann) (UUP): On a point of order, Mrs. Roe. May I express our disappointment at the fact that the Committee is again meeting here, despite repeated calls for sittings in Northern Ireland? Unlike Scottish and Welsh Grand Committees, which can meet in the areas concerned, this Committee is prevented from holding debates in Northern Ireland. I know that the problem does not lie with the Chairman, but who is obstructing? Should not the Government's representatives and Whips tell us which party objects to Members who represent Northern Ireland debating Northern Ireland matters in Northern Ireland? My hon. Friend the Member for East Antrim (Mr. Beggs) raised the issue with the Leader of the House in November 2001, October 2002 and March 2003, and he has raised it here regularly.

My hon. Friends and I were not asked for our views on the subject for debate; rather, the Government made a decision. In October, we were to debate community relations, but the sitting was cancelled. Since then, there have been three sittings, but there has been no sign of a debate on community relations—a more urgent and important issue than that before us—despite reminders, most recently from my hon. Friend the Member for North Down (Lady Hermon), who raised the matter with the Minister of State in Standing Committee on 24 March.

I regret to say that, much as we looked forward to serving in this Committee under your chairmanship, Mrs. Roe, in view of the unsatisfactory situation, my hon. Friends and I do not intend to participate in this debate.

The Chairman: As the right hon. Gentleman surely understands, those are not matters for the Chairman; he should pursue them through the usual channels.

Mr. Peter Robinson (Belfast, East) (DUP): Further to that point of order, Mrs. Roe. May I support the view expressed on the ability of the Committee to meet in Northern Ireland? On previous occasions, it was apparent that it was one of the Northern Ireland parties that was not prepared to allow sittings to take place in Northern Ireland. As that party does not attend the sittings that take place here, surely the Government should raise that issue with it, and make sure that we can hold sittings in Northern Ireland.

Unlike the Ulster Unionist party, we will take part in the debate. We think that the issue is important; we are not prepared to allow our constituents' views to go

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unheard by default. We have much to say, and we will say it.

The Chairman: As the hon. Gentleman knows, I have already ruled on this matter; these are issues that should be pursued through the usual channels.

I remind the Committee that the debate may continue for up to two hours.

2.32 pm

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Barry Gardiner): I beg to move,

    That the Committee has considered the matter of the social economy in Northern Ireland.

This is a week of parliamentary firsts for me: my first time on the Front Bench, my first oral questions—although we did not quite get there—my first Adjournment debate, at least from the Government's perspective, and my first Grand Committee. Perhaps the most significant first is the fact that this is my first Committee under your chairmanship, Mrs. Roe, and I am delighted that that is the case.

I warmly welcome this opportunity to address the Committee on the important subject of Northern Ireland's social economy. First, I would like to express my regret that one of the parties has decided that it cannot participate in this debate, and indeed I regret that it has said that the subject is of lesser importance. I think that the debate is tremendously important. If the debate was about, for example, the construction industry or tourism in Northern Ireland, it might have attracted more attention; but, of course, the social economy in Northern Ireland is an industry of that magnitude. For that reason alone, it is well worth our consideration this afternoon.

A strong, thriving and local social economy sector offers a major opportunity to make a significant contribution to social and economic development and employment growth across Northern Ireland, but particularly at a local community level and in areas of disadvantage. I am conscious that many hon. Members are intimately involved with social enterprises in their own constituencies, and have, indeed, campaigned for them. I begin therefore by paying tribute to the work that so many colleagues do in this field.

I have no desire simply to recount to hon. Members stories from their own backyard. Instead, I propose to focus in my opening remarks on four key areas: the nature of Northern Ireland's existing social economy sector—that is, the key characteristics of social enterprises, including their scope and size; our current arrangements for partnering key stakeholders to develop the sector; Government strategic objectives for the period 2004 to 2007; and the next steps to ensuring the effective delivery of our plan.

First, I shall give a fuller definition of the type of enterprise that we are discussing. The Government's draft strategic plan says that a social economy enterprise must have

    ''a social, community or ethical purpose; and operate using a commercial business model; and have a legal form appropriate for a not-for-personal-profit status.''

It continues:

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    ''Social economy enterprises can be constituted in different ways, for example, companies limited by guarantee, or Industrial and Provident Societies. They operate across a wide range of activities such as the provision of finance, social housing, community regeneration, training and employment opportunities, and support for business growth and workspace.''

The draft plan describes types of social economy enterprises in Northern Ireland, including community businesses, which are strong enterprises with geographical ties which focus on local markets and services and on retaining profits in the community. It also refers to credit unions and industrial and provident societies, which provide access to community finance as savings organisations and sources of affordable credit and financial advice for members' benefit. It talks about housing associations and the provision of affordable housing for rent or low-cost home ownership, and supportive housing for the elderly or people with disabilities.

The draft plan describes local enterprise agencies stimulating enterprise and business growth through the provision of advice, support and work space throughout Northern Ireland. It describes co-operatives as associations of persons united to meet common economic and social needs through jointly owned and democratically controlled enterprises.

Many different organisations make up this tremendously diverse sector. In 2001, Northern Ireland's Department of Enterprise, Trade and Investment commissioned research to assess the size and potential of the social economy sector. Although it is diverse and flexible, statistics on it remain limited in scope. However, the key findings of the research were that the sector is resilient and extensive, consisting of some 500 organisations ranging from credit unions to employee-owned business and community businesses for the trading arms of charities. It also found that the sector accounts for some 30,000 jobs. As I said, that is comparable in size to the construction or tourism industries in Northern Ireland.

The research also found that social economy organisations are characterised by a social community or ethical purpose, a commercial business model and a legal form appropriate to a not-for-personal-profit motive. The sector creates wealth, income and employment in many under-developed areas and for many disadvantaged communities. It contributes significantly to the building of social capital, which in turn contributes to better integrated, more active, capable and cohesive communities. It operates largely on a cross-community basis, and there are a range of expenditure programmes, particularly from the EU, which impact on it. Furthermore, some international standard exemplars have developed such as Aspire Micro Loans for Business Ltd and Ulster Community Investment Trust, which use investment funds for social economy objectives.

Those research findings and, in particular, the sector's strong potential to play a vital role in achieving a balanced local economy have provided the rationale for the Government initiating, in partnership with key stakeholders, a strategy that will try to maximise the sector's economic and social impact.

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Engagement with key stakeholders in the sector is central to our plans for a joined-up strategic approach.34 In 2002, DETI and its sister department, the Department for Social Development, engaged Northern Ireland's Social Economy Agency to undertake a £600,000 project over four years to establish and service a new high-level sectoral representative body, the social economy network, and its committees.

The SEA's role is to implement a targeted programme of work to promote the work of the network and the benefits of social enterprise; to contribute to the better understanding of social enterprise policy issues; to promote the development of new policy responses by the sector and/or Departments and Government agencies; to provide a research capability to identify new opportunities for increased social enterprise activity; to promote beneficial partnerships between the Northern Ireland network and other similar external organisations; and to provide a resource capability website to provide business support and information for the sector.

As well as putting in place the resources and infrastructure to assist the sector in building up its policy-developing capability, the Government also established in 2002 a DETI-led interdepartmental steering group of senior officials from all 11 Northern Ireland Departments to develop and co-ordinate a new integrated cross-departmental approach to the sector.

Network and IDSG representatives meet bilaterally under the aegis of the social economy forum, which in my role as Minister for Enterprise, Trade and Investment I will chair in succession to my colleague, the Under-Secretary of State for Northern Ireland, the hon. Member for Dudley, South (Mr. Pearson). The forum provides a powerful and influential platform for Government and the sector to jointly consider key issues, to prioritise programmes of work and to review and monitor progress. I look forward to chairing my first forum meeting next October.

On 26 January this year, my hon. Friend issued for consultation a new and challenging three-year strategic plan, including a year 1 action plan that was prepared by the IDSG in collaboration with the social economy network. The closing date for responses is tomorrow, 30 April, and feedback to date has generally been extremely positive.

The first key feature of the draft strategy is the establishment of three overarching core objectives: to establish awareness of the sector and its value to the Northern Ireland economy; to develop the sector and increase its business strength; and to create a supportive enabling environment.

Secondly, there is a programme of actions to help to deliver those objectives. It includes a joint network-IDSG working group to collaborate with the Department of Trade and Industry on a UK-wide mapping and scoping study, expected to be completed by July 2004, to deliver key data on the sector's size, scale and value to the Northern Ireland economy; a joint working group on finance, overseeing a research study into sources of finance and financial products for

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the sector that is expected to be completed by September 2004; a joint working group on business support to research the business support needs of the sector, and to identify gaps and opportunities to extend or to adapt existing schemes of business support to meet the needs of social economy enterprises—that project is scheduled to be completed by September 2004; and a joint working group on procurement to identify and increase opportunities for the sector to deliver public services. That project is also to be completed by September 2004.

The programme of action also includes departmental reviews of legal, regulatory and policy obstacles to the sector's growth, and the development of a supportive and enabling legal framework within which the social economy enterprises can grow and develop. In that regard, two new important developments include a consultation document from DETI on community interest companies—a new legal entity for not-for-personal-profit organisations—which was issued on 5 March. I expect to publish a consultation document on reforming the law governing credit unions, and industrial and provident societies, early next month.

A DSD-led review of the administration and legislative arrangements for Northern Ireland charities is expected to be completed by June this year. A Government-sponsored review by a special taskforce of what is required to enable the voluntary and community sector as a whole to continue to make a contribution to the well-being of Northern Ireland is also expected to finalise its report and recommendations to Ministers by June.

The Government are totally committed to ensuring that the new social economy strategy complements the initiatives of other Departments in a joined-up way and quickly delivers concrete results that further social and economic progress for Northern Ireland society as a whole.

The consultation period for the Government's new three-year strategic plan ends tomorrow, as I said. We will carefully evaluate all the feedback received and adjust our proposals accordingly. We want to lose no time in pressing ahead with the implementation stage; our target is to publish the final document in June this year.

Thereafter, with our strategy and partnerships firmly in place, the emphasis must be on carrying through the 2004–05 action plan, with a clear focus on delivering real economic benefits that will make a difference in the community. We will then take the opportunity to review initial progress against our plans at the next forum meetings, in October 2004 and May 2005, and adjust priorities and future work programmes accordingly.

The Northern Ireland social economy sector and, in particular, its social economy enterprises, combine a strong social and community spirit with entrepreneurial skills, delivering employment opportunities throughout Northern Ireland,

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particularly in areas of disadvantage. I am convinced that the sector has significant potential to contribute still further to social and economic development in Northern Ireland, and to deliver yet more benefits, both to local communities and to the wider society. The social economy also offers a practical and beneficial opportunity for the public sector to work in partnership with social economy businesses to improve service delivery for the benefit of the community.

To recap: we have the Social Economy Agency in place to build the social economy network into an inclusive and vigorous representative body. We have an interdepartmental structure to co-ordinate and energise the Government's contribution, and we have a social economy forum to set the high-level strategic direction and to oversee the progress of a substantial number of work programmes designed to deliver our three overarching strategic objectives.

With that in place, I am confident that we have the right framework, the right structures and the right processes to deliver action. We are now at the early implementation stage, which is already bringing some short-term benefits, and which has the potential to deliver very substantial benefits in the medium to long term. I am confident that this strategy, energetically implemented, has enormous potential to broaden and strengthen Northern Ireland's local economic base; to provide new employment opportunities; to improve service delivery that meets local needs; to create new sources of income, a high proportion of which can be expected to circulate in the local community; and to build new social capital and promote active citizenship and capability. I commend the strategy, the priorities and the action plans to the Committee.

2.44 pm


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Prepared 29 April 2004