CEIS calls for ambitious and creative approach to economic recovery

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Response by Maureen Porch, Chair, CEIS Group to the Scottish Government’s Advisory Group on Economic Recovery

Dear Lord Smith

Thank-you for the opportunity to respond to the advisory group consultation on economic recovery.

I am responding as Chair of CEIS (Community Enterprise in Scotland).  Based in Govan, we are a key, strategic partner within the social enterprise sector in Scotland and are the lead partner for the ‘Just Enterprise’ programme of support to stimulate and grow social enterprise.  We also manage a series of employability programmes through CEIS Ayrshire and through DSL we manage and deliver programmes of micro-loan support to small business.  We are ourselves a social enterprise where all of our profits go back into our social purpose: to tackle inequality, strengthen communities and improve the performance and impact of businesses which contribute to an inclusive society.

I will not follow the structure of the questions at this stage but rather cut to the two key parts of the remit of the advisory group as set in your letter.

Firstly though I would urge the group to be genuinely creative and innovative in its thinking and approach and to follow the promptings of the Cabinet Secretary for Economy, Fair Work and Culture:

“We need a revolution in economic thinking that stimulates and values co-operative sharing of risks and reward, to re-think what value is”

The current crisis has shown our ability to make change happen faster than we may have thought possible.  There is a demand for change and the Government should be ready to respond to that, and in some aspects to lead that.  This means that some of our traditional assumptions on how the economy should operate should be firmly under the spotlight. On behalf the advisory group you do pose the question of:  ‘how Government policy can help the transition towards a greener, net zero and well-being economy?

In particular I would note three aspects we need to put at the heart of a new national business model:

  • The need to address huge inequalities in Scotland which a succession of Government initiatives (under various political hues) have failed to alter to any significant degree. The scourge of unemployment and under employment at the end of the last century has turned into the scourge of low paid and insecure work today with its associated social problems. We may also have a return to higher unemployment as a result of this current crisis – that is dealt with below.
  • The need to recognise and use measures of success for our economy and our way of life in Scotland which better reflect what sort of country we want to be. Scotland has started well with the development of such a framework: an outcome based National Performance Framework.  There has also been more recent interest in a well-being economy with a broader range of success measures.  But the existence of a measurement system and this being used to drive investment and decision-making are two different things.  Too often lip service is being paid to these strands of thinking which remain in the shadow of a consumption and growth-based model of success.
  • The need to cherish the natural and other resources we have in Scotland as a major contributor to reducing carbon emissions and addressing an otherwise looming climate crisis. Scotland has shown leadership so far, but the really difficult phase is upon us as we push towards a net zero emissions target and changes are necessary to how we live, work and travel.  Some of the challenges can be embraced positively as a huge opportunity for those businesses embracing a new green economy.  Embracing an economy where business designs out waste from the start and promotes a circular economy is also necessary.  And a clean and ‘green Scotland’ as a place to live and work can be a huge economic asset.  We will also need leadership, incentives and regulation if we are to rise to the challenge and see Scotland as a world leader.

In relation to the specific remit of the advisory group:

What measures will support different sector and regional challenges the economy will face in recovery?

There are clearly a range of differentiated challenges across different sectors of the economy.  Rather than attempt to address this in an initial response I wanted to focus on the specific challenges of those communities and groups who are facing a particular disadvantage.  This is the focus of Community Enterprise in Scotland (CEIS).

The advisory group would do well to look closely at the Community Wealth Building model currently being driven forward in North Ayrshire, but with a significant number of Councils and other agencies taking interest.

The model is ostensibly local in nature and reinforces the importance of Place.  An added impetus from the current crisis may be the interruption in global supply chains urging us to focus more production and more ownership locally.  This is not a comment on the role of international trade – competition and global trade will still have a vital function to Scotland’s economy – but it is a reminder that we should challenge the worst effects of global capitalism and in particular avoid the fragility of mobile investments.

I would commend a focus on the five key measures of Community Wealth Building as a building block for the recovery within communities:

  1. Progressive procurement policy and practice. We should support and develop local supply chains of local enterprises, SMEs, employee owned businesses, social enterprises, cooperatives and other forms of community owned enterprise.
  2. Fair Employment – building on the strong foundations in Scotland we should stimulate recruitment from lower income areas, commitment to paying the living wage and building progression routes for workers. There are specific initiatives needed to ensure young people get the most productive start to their working lives and also gender and race issues to consider as people are made redundant from businesses dependent on socialising.  Given support, ‘anchor institutions’ can lead these stimulus measures in the local economy and bring employment to local communities.
  3. Support for communities to own and manage Land and Assets – Anchors are often major land-holders and can support the development of under-utilised assets for community use and community ownership.
  4. Stimulating social investment and encouragement of financial wealth locally – seeking to increase flows of investment within local economies by harnessing the wealth that exists locally. The Scottish National Investment Bank have a significant role to play here working alongside those bodies with experience of lending and managing creative forms of finance.
  5. Plural Ownership of the Local Economy – support for the creation of sustainable business models that combine economic, social and environmental outcomes. For example: social enterprise, co-operatives, mutually owned businesses, SMEs and municipally owned companies with the object of retaining as much wealth locally as is possible.

How business practice will change as a result of Covid, including opportunities to operate differently?

In relation to business practice I would strongly commend a social enterprise model as being eminently suited to the recovery phase and beyond.

The effects of Coronavirus have highlighted that the market value of jobs does not match the social value that we would associate with those jobs that have proved so vital over the last few months.

A social enterprise model that is business orientated and is comfortable with trading, with competition and with accountability.  But crucially it is a model that focuses squarely on its social and environmental impact and where any profits are reinvested for that purpose.  In doing so the vast majority of social enterprises have an excellent track record on fair employment and is a sector where pay is proportionate to skills and responsibility avoiding the vast salary and condition chasms that are a feature of parts of the private sector.

The sector can play an increasingly prominent role in economic recovery and in certain sectors, for example in care services, is clearly allied to an ethical and values driven service.

I look forward to hearing further about the deliberations of the advisory group and both myself and CEIS more broadly would be delighted to take part in any further consultation or events with the intention of stimulating economic recovery.

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