Economy: Sustainable Jobs

Lord Bishop of Bristol Excerpts

Thursday 27th June 2013 Lords Chamber

[The Lord Bishop of Bristol]

My Lords, like other speakers in your Lordships’ House this morning, I would like to thank the noble Baroness, Lady Brinton, for introducing this significant debate about the importance of sustainable jobs to the Exchequer and to the British economy. To this, I would add their importance to the millions of people whose lives are currently blighted by unemployment, and the communities in which they live. With the noble Lord, Lord German, and the noble Baroness, Lady Sharp, I am thinking in particular of the nearly 1 million young people who are out of work.

I want to use this opportunity to highlight the potential contribution that co-operatives and other social enterprises have to offer to sustainable job creation. In delivering the spending review yesterday, the Chancellor talked about the need for growth, reform and fairness. The growing social enterprise sector meets all three of these criteria, providing a business model that delivers sustainable economic growth while fostering innovation and social change.

Damage to the reputation of the important parts of the UK economy in the wake of the financial crisis and concern about the social impacts of the recession and public spending cuts have brought social enterprise to the fore. People want a different way of doing business that is about creating shared value, not just profit—where the motivation is more than just making money, where the proceeds are reinvested locally for the benefit of the whole community and where employees and customers are actively engaged in decisions that directly affect them.

Here are a few statistics that demonstrate the potential of this sector, courtesy of Social Enterprise UK. At present there are around 70,000 social enterprises in the UK, contributing at least £24 billion to the economy and employing more than 800,000 people. Social enterprises are twice as likely to have grown in the past year as other small and medium-sized businesses, and 82% of social enterprises reinvest their profits in the communities where they operate. Social enterprises create more jobs relative to turnover than mainstream businesses, and 39% of all social enterprises operate in the 20% most deprived communities in the United Kingdom, helping to create jobs where they are most needed.

This is a dynamic and fast-growing sector with the ability to create and sustain employment. One in seven social enterprises is less than two years old, more than three times the start-up rate for small businesses generally. At the same time there is a core of older, well-established social enterprises. Nearly half of all social enterprises have been trading for more than 10 years.

Jobs created in this sector are sustainable in other ways, too. Research shows that employee engagement correlates with increased productivity and performance. Engaged employees are much less likely to leave their organisation and are more likely to report high levels of job satisfaction. For a voluntary sector organisation, income from social enterprises can provide a more reliable source of income than external grants.

Enough of the statistics. Now for two examples that I hope will show why I believe that social enterprises have so much to offer. The first is an initiative set up by Portsmouth’s Anglican cathedral to support entrepreneurs and business start-ups. The Cathedral Innovation Centre provides entrepreneurs with office space, start-up loans and mentors, helping to create jobs at the same time as providing a new purpose for underused buildings. There are already nine businesses at the Portsmouth Cathedral Innovation Centre, including a computer games firm, a catering company and a business that redevelops old land for wider civic use. Together they occupy 14 desks and are currently recruiting three new apprentices with support from the centre. With hardly any resources, they have levered in-kind support worth around £500,000. The initiative is also being funded by local people who are being asked to invest £75 or more as shareholders. Discussions are already taking place to open similar centres in Derby, Cheshire, East Anglia, Bournemouth and the north-east. As the noble Baroness, Lady Berridge, who attended the official launch in May of this year, said:

“This isn’t just one cathedral innovation centre, but the start of a movement. It’s about providing jobs, which is the best expression of hope [and] providing a real sense of self-worth”.

The second example is Worth Unlimited, a Christian charity based in Birmingham, which has established a family of social enterprises offering skills training and employment opportunities for disadvantaged young people at risk of social exclusion. One of these social enterprises is the DevenishGirl Bakery, which produces a range of home-baked cakes using locally sourced, organic and fair trade ingredients, as well as vintage tea parties and picnic hampers. Young unemployed people are given accredited training in how to run a small business, as well as practical cookery and personal development skills. The six-month programme is specifically designed to help move the young people they work with into sustainable employment, whether through job creation within the organisation or other opportunities outside the enterprise.

These two examples illustrate that, as a church, we are not just about high-flown rhetoric; we are very much on the case and very willing to partner with others who seek to meet the noble goal of sustainable jobs for the young. I am also encouraged that the Government, too, are beginning to see the huge potential of the social enterprise sector. I urge the Government to do all they can to maximise the contribution of social enterprise to economic growth and sustainable job creation.