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Money not laws 23 June 2016

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160623 EP SE report coverThe European Parliament has published a report on the social economy. I’m glad to see it features a lot of good practices we identified in SEN, like the UK’s Social Value Act and the Le Mat social franchise, although the authors seem never to have visited the SEN website.

The study packs a lot into its 120 pages. It has 6 big-country studies (DE, ES, FR, IT, PL, UK), boxes on EQUAL, DIESIS and Mondragón, and makes some interesting proposals on taking the social economy forward:
– a digital transformation – on the grounds that “The digital single market can help protect Europe’s economic and social model and increase citizens’ well-being, by being a key component of the renewal of public services”;
– indicators of added value other than GDP
and…
– a clear definition.

So it comes up with another new definition:
“Distinctive features of the social economy can be identified – par ricochet – on the basis of what sets them apart from other enterprises. These elements include:
(i) the primacy of people: the social economy is based on the primacy of the individual and of social objectives over capital,
(ii) sustainable growth: the overall aim of the social economy activities does not emphasise the pursuit of profit and its distribution to the owners as an ultimate goal,
(iii) social and economic balance: in conducting their activities, social economy actors are engaged in a social aim and
(iv) democratic governance: social economy entities function in accordance with democratic, transparent and participatory decision-making processes.”

I think the social economy could improve service delivery by using digital tools more, and that the EU agenda should give an explicit place to them. Measures of social value are definitely needed, and the SBI as well as SEN worked on this. The main issue is for stakeholders such as public authority customers to start using them.

It’s difficult to disagree with the four ‘distinguishing features’ above, but I’m not sure they are any clearer than all the definitions we’ve navigated between so far. I fear that the again repeated call for a supposedly clear EU-wide definition misses the point. Will it enable very much to actually happen? It’s much more to the point to improve access to public funding programmes such as the ESIFs and to private investment in projects on the ground, and to help the sector’s federal support bodies to do their job. As in: “Existing social innovation and social investment programmes tend to reflect a focus on investor-led models and could be opened up to innovation based on member capital and on participatory innovation.”

See: http://www.europarl.europa.eu/RegData/etudes/STUD/2016/578969/IPOL_STU(2016)578969_EN.pdf

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‘New’ social economy means non-social economy 15 May 2015

Posted by cooperatoby in social economy, Social enterprise.
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Oh dear another attempt to redefine democracy out of existence.
In the footsteps of the terms social enterprise, social entrepreneurship, social business, social innovation and social investment, all of which, brandished in the wrong hands, seek to take the mantle of the social economy and depoliticise it, we now have a takeover bid for the very term social economy itself. It comes from about as far away from Europe as you can get in this world, California.
In her blog Lucy Bernholz notes that Rob Reich, also at Stanford has “coined” the phrase ‘new social economy’ to mean, wait for it:

    Organizations and financial structures that deploy private resources for shared social benefits – i.e. the sector formerly known as philanthropic, independent or nonprofit.

A presentation setting this out is here and an audio lecture about how the established model of the social economy needs to change is here.

It is simply extraordinary and leaves me speechless that the project is to redefine the social economy entirely in terms of impact investing, with nary a mention of the “social” dimension of any ownership, decision-making, production processes or impacts.

Parliament discusses intergroup agenda 15 November 2014

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The European Parliament has not yet chosen which intergroups will exist in the 2014-19 mandate, but a sort of proto-Social Economy Intergroup met on 13th November. It was well attended and discussed an agenda for the next five years.

IMG_3938 EP hemicycleIt was encouraging to see the relatively large number of MEPs present, although at mid-point a bell summoned them to a plenary vote, leaving Jan Olsson in charge. Jens Nilsson (S&D, SE) chaired the hearing, and six other MEPs intervened: Patrizia Toia (S&D, IT), Marie-Christine Vergiat (GUE/NGL, FR), Heinz Becker (EPP, AT), Sofia Ribeiro (EPP, PT), Beatriz Becerra (ALDE, ES) and Georgi Pirinski (S&D, BG).

Will there be an intergroup?

The continuation of the Social Economy Intergroup is not a foregone conclusion. Each political group has a limited number of votes to cast – 22 in the case of S&D and EPP, and 8 in the case of GUE/NGL. And they are up against some attractive competitors, as Heinz Becker reported, such as the proposed intergroups on wine, beer and hunting. It is also true that the vote may be split with other potential intergroups such as the one on public services. The vote on which intergroups will be established is set for 11th December, so let’s hope that three groups – where are the Greens? – will sign up.
Germania Viglietta, Social Attaché of the Italian EU Presidency, announced the four themes of the Rome conference next week: visibility, the legal framework, access to funding and stronger relationships with the public sector. Some 200 people are expected to attend, from 25 countries. Jan Olsson hoped for two key results: a statement supporting the continuation of the intergroup, and a roadmap for the development of the social economy.

An agenda for the next five years

There was unanimous agreement on the crying need for the social economy, above all to address Europe’s employment problem. The hearing collected priorities for future work:
For Jens Nilsson the priorities are public procurement, job creation and participative democracy. Following the adoption last year of Patrizia Toia’s report on worker take-overs, she thinks that this should be a permanent EU budget line. Georgi Pirinski suggested that the mid-term review of the Europe 2020 strategy would be a good opportunity to move the social economy up the list of policy priorities.
The perennial issue of definitions cropped up: for instance it’s an issue in Spain, where the social economy in many people’s mind equates to employment for disabled people, whereas in fact it provides 2.5 million direct jobs and is the only sector of the economy that is creating jobs. While the MEPs are happy with the concept of social economy and social entrepreneurship, they are dubious about ‘social business’.
The potential intergroup’s agenda seems to be shaping up to include:

• follow-up on Europe 2020: meaningful jobs for young people, the white and green economies
• renewal of the SBI, including the EU-wide internet platform
• public procurement: ensuring the Member States don’t close the windows that the EU has opened when they transpose the directive
• cohesion policy: a voice for the social economy in the committees that control the Structural Funds
• co-operative banks and capital adequacy
• statutes: given the lack of progress on a European Association Statute. maybe we should look at a European statute for sociétés de personnes (+/- partnerships)

Stakeholder support

The hearing gave space to two stakeholder groups which support the intergroup’s continuation. Harald Hauven of Social Services Europe pointed to the immense potential for job creation in health and social services. Michel Mercadié of the Social Platform had three priorities: clarifying the status of profit-making in social enterprises, measuring social added value, and the role of finance. He pointed out that there is a difference between hybrid financing from multiple sources, and handing over the social economy to investors. He also said that the issue on job creation is not just about quantity but also quality: jobs for whom (the disadvantaged), for what (to meet needs), where (neighbourhood renewal), how (with participation) and with whom (volunteers). The ecosystem requires the structuring of the public sector, an inter-DG structure within the Commission, an observatory and a representative forum.
The intergroup is an important forum. Watch this space.

What progressives should propose is social enterprise 15 November 2013

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Roberto UngerGood to watch Roberto Unger being grilled by Steven Sackur on the BBC’s HARDtalk last night. It was an interesting contrast of style between a deeply-thought-out political philosophy and a journalistic desire to get snappy answers to practical problems. Unger, who is a Harvard law professor and was Brazil’s minister of strategic affairs under Lula, tried his obstinate best not to be dumbed down. His analysis led me to watch his discourse on What progressives should propose.
And hey presto I am delighted to find that little I have come to some of the same conclusions as the great man. He proposes that:

    – our economies need to be based on a combination of self-employment and co-operation (18:00 in the video). He calls it “the reconstitution of free labour”
    – civil society involvement in experimental ways of providing social services (23:00 in the video) – exactly what social so-operatives and social enterprises are doing
    – politics needs to be enriched with participative democracy

It seems that we in Europe are edging towards many of his prescriptions – to find a new synthesis of the North American faith in unfettered markets and the north-east Asian command economy, by for example:

    – spreading the experimental innovative collaborative ways of production which are currently limited to the vanguard of the high-tech industries
    – encouraging localities to conduct social experiments

Michel Barnier’s grounding of the Social Business Initiative in the need to “put finance at the service of society” bears a resemblance too. Maybe social enterprise is capable of “doing the work of crisis, without crisis”.

CIRIEC in Antwerp – more theory than policy 6 November 2013

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CIMG1196-7 BoerentorenSocial Economy on the Move, the CIRIEC conference in Antwerp two weeks ago, was the first academic conference on the social economy that I’ve ever been to. Given that it was so close I couldn’t really say no – especially with €10 ‘Web Deal’ train fares on offer.
But I confess I was a little disappointed. The organisers had given space to as many promising young researchers as they could – the 48 workshop sessions each dealt with between 3 and five papers – and this meant that they each had very little time to play with. Anxious to prove their academic credentials, they tended to use most of their 15 minutes of fame to set out the theoretical model they were applying, and had no time to talk about the real world to which it referred. So not only was there no way to verify the truth of their assumptions and deductions, but I learnt very little about the state of the social economy in the wide world.
Of course the corridors and Oxford-style quadrangle of the Hof van Liere – you should not ignore the mediaeval heart of Antwerp if you have the chance to visit – did provide a place to bump into old friends and colleagues.
Thus, the main value I got from the event was the plenary sessions, held in the Boerentoren or ‘Farmer’s Tower’ – a miniature Empire State Building which was Europe’s first skyscraper, and has now passed from CERA to KBC, my bank.

Positive social value, but market regulation

On the bright side, the Belgian state certainly sees the value of the social economy. Yasmine Kherbache from the cabinet of Prime Minister Elio di Rupo reassured us that it was a misconception that policy to support the social economy has more costs than revenue – it’s just that the benefits are hard to measure in strict economic terms. She also stressed that the social economy’s role is growing: the present economic model cannot last till the next generation as it cannot cope with the issues of demographic change and the environment. “We can only progress if everyone can follow”, she said. She sees the sector’s growing relevance, noting how second-hand shops (kringloopwinkels) have been transformed from being the preserve of the poor into a resource for sustainability for everyone.
Getting down to brass tacks, she went on to justify the controversial Flemish maatwerkregeling (‘made-to-measure regulation’) which reallocates work integration subsidies according to each individual’s distance from the labour market. This reform has caused concern among WISEs in Flanders, as it makes their budget unpredictable and their financial planning very difficult. Not only that, but it puts social and conventional enterprises on the same footing. The subsidy is portable, and the worker carries it in a ‘rucksack’ if he or she changes jobs (although apparently the social economy and economic affairs ‘rucksacks’ will be different beasts, which might limit mobility).

Trust in globalised markets

Avner ben Ner from the University of Minnesota looked at how the globalisation of the supply chain is affecting the social economy.
Globalisation leads to long anonymous supply chains with asymmetric information and social distance. Businesses have greater opportunities to take advantage of this information asymmetry, so the self-regulation which the social economy practices is a valuable asset. It was asymmetric information (in the form of adulterated flour) that led the Rochdale Pioneers to set up shop in 1844. Long supply chains make quality inspection prohibitively expensive, and government regulation is out of fashion. So by quasi-regulating themselves, social economy organisations reduce the damage that globalisation causes.
His conclusions are that the social economy should focus its efforts where success is most likely: on food, on collaborative marketing, on new ways of raising capital (e.g. crowdfunding) and on new technologies.

Co-ops poised to benefit from global trends

According to Ruben Monbaillieu from MacKinsey, co-operatives’ credibility with their members means that are in a good position to benefit from four trends:

  • the rebalancing of the world economy from developed to developing countries
  • the rapidly raising old-age dependency ratio
  • ‘pricing the planet’ – factoring environmental costs into prices
  • the ‘market state’ – governments becoming active in the market

Aspects of management they need to improve are measuring their impacts and the speed with which they react to change.

The social economy as a component of social justice

Philippe van Parijs of UCL in Louvain-la-Neuve situated the social economy in a philosophical perspective. He believes that social justice has there dimensions: equality of opportunity, freedom and efficiency:

  • Equal opportunity means equal concern for the interests of all members of society – but personal responsibility means that it is up to each individual to make the most of the opportunities he or she has;
  • Freedom implies a liberal, pluralist perspective, that respects everybody’s right to seek their own conception of the good life;
  • However efficiency must also be considered: if equality leads to worst outcomes for all members of society, then we should allow injustice.

We need the market to ensure efficiency. The state’s role is to regulate the market, redistribute income and provide services such as education, health, cash transfers, justice and tax. So do we need a third sector?
Luckily the answer is “yes”, because of two characteristics:

  • its ‘marriage of trust and flexibility’
  • its facility for ‘legitimate self-exploitation’ which benefits the public

Non-profit private sector organisations are particularly needed where there is asymmetric information in markets.

The sacred hunger of social investors 5 November 2013

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The unsuspected and silent protagonist of Barry Unsworth’s (1992) novel of the slave trade is money itself – the ‘sacred’ need of capital to find a return.

Topic drift

social economy-investmentI’ve become increasingly worried by the insidious topic drift that is turning talk of social economy, via social enterprise and social business, into talk of social investment. Money has its own logic. I’ve noticed this during meetings both of foundations and of microfinancers, who are surely the most socially conscious of money managers. You start off taking about what to do with money and you inevitably end up talking about how you do it. Someone mentions risks and returns and suddenly the discussion is reframed in terms of the needs of the money itself. Who owns the money, how they got it in the first place, the rights they have over it and how you use it are suddenly irrelevant – the money itself “needs” this or that return, such and such will be impossible because investors see it as too risky… how often have you heard that?
I think this is a smokescreen. There are certainly ethical investors who want to do good with their money, and are searching for ways to do it without losing their life savings. But they are in the hands of the financial professionals when it comes to actually doing it. We’ve seen the disastrous effects that resigning control over money to bankers has had. They have dreamt up ever more abstruse formulae for minimising risk and maximising returns, built castles in the air… and when they collapsed, we have had to pick up the pieces. Result – astonishing and continually mounting inequalities in wealth, both within countries like the USA and UK, and globally.
As social finance becomes more sophisticated, it also becomes less transparent (though initiatives like Ethex help). It develops its own language and can only be discussed by specialists. This leads to the lack of accountability and the self-justifying in-crowd behaviour which has brought us the world financial crisis.

Reframing through terminology

This sleight of hand is now being applied to the social economy and social services. First, there was Commissioner Michael Barnier’s invention of the “Social Business Initiative”. Welcome though this is, I think the choice of the word “business” instead of “enterprise” was significant. “Enterprise” at least implies some sort of noble aims – to create something – while “business” implies not much more than doing a deal, from which one or ideally both parties gain. The choice of the term “social business” suggests an intention to change the underlying assumptions – it means that someone makes money out of the operation, rather than that it produces worthwhile benefits.
Money needs to find a return. In a depressed market, where do you go to find returns? You seek out those basic services that everybody needs to consume, whether they have disposable cash or not – those services that are inelastic with regard to price. They are not cyclical – i.e. they will continue to be consumed whether we are rich or poor, because our lives depend on them. Things like food, utilities, housing and social services. They will produce a steady return to investors when the market is failing to offer spectacular returns elsewhere in sectors like technology. They also have the benefit that governments are always there to subsidise them when things go pear-shaped. You then lobby to get governments to give you a slice of the action. Aditya Chakrabortti has a wonderful piece in yesterday’s Guardian showing that in 2012 the private rail operators to whom Britain’s railway system was sold off 20 years ago made a return of no less than 147% – a multiple of 2½ in a single year – on the small amount of money they have put in. The public was assured that what passengers needed was private firms who could invest in better services – but what we have is fat controllers creaming off massive profits. The public sector can run much better railways, as Directly Operated Railways has done with the East Coast Main Line – and it is to be reprivatised lest this good example should undermine the myth that private enterprise is best.
Once the SBI got under way, the practitioners – the people who are actually doing it on the ground – needed to be got on board. It became apparent that it would be no easy matter to impose an alien notion of “social business” on the relatively stable and well-rooted traditions of European social enterprise, and so the two ideas have been elided – the Commission treats them as synonymous. And the European definition includes three dimensions: not only a primary social objective and limits to profit distribution and asset disposal, but also participative management. This is a significant victory.

Why the emphasis on investment?

I’m suspecting that although DG MARKT puts the SBI forward as putting financial institutions at the service of society, there’s a double agenda: it also opens up opportunities for them to make reliable counter-cyclical profits.
At its worst, transforming public and social enterprises into vehicles for “social investment” is a mechanism to ensure a steady and relatively low-risk flow of money from disadvantaged service uses to capital owners – which is socially regressive.
Talk of business rapidly elides with talk of investment, but business is about much more than returning a stream of rewards to the people who put in the money. It’s about balance: a good business creates returns for all its stakeholders by providing worthwhile goods and services and satisfying, decent jobs.
Politicians placate us by saying that “we cannot go back to business as usual”. I fear that an over-emphasis on social investment is doing exactly that. Social enterprise is more a matter of solidarity, networking and mutual support and peer learning than it is about being able to borrow money.

Levanto – Antwerp’s red monkey breeder 24 October 2013

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CIMG1156 Levanto is a 'red monkey' (after Jef Staes)Levanto is a social enterprise in Antwerp that helps over 2,000 people each year to find their place in the labour market. It is re-engineering its management processes to tackle increasingly difficult economic conditions.
I’ve just paid a visit to the social enterprise Levanto in Deurne, a suburb of Antwerp, organised on the fringes of the CIRIEC conference. Its HQ is a bit like a Tardis – a 4-storey warehouse on a quiet residential street. Facing you as you enter is a big red gorilla, which symbolises the organisation’s innovative management style. This ‘red monkey’ (rode aap) is a symbol drawn from Jef Staes, a Belgian management thinker who talks among other things of the way the information revolution means we have to switch from ‘2D’ to ‘3D’ management. Learning organisations need to breed red monkeys, not hunt them, according to Staes.
Levanto is big business, as well as being a non-profit. It operates in a score of places in Antwerp and Mechelen, and trains over 2,000 people a year, targeting excluded groups such as migrants, young people and over-50s. It has a staff of 170, and provides permanent jobs for 370 others. It earns about 38% of its revenue of €18.6 million from the private sector, with the rest coming from the Flemish government, through a number of different schemes including the ESF. The two main programmes are:

  • permanent jobs: it operates the logistics for Antwerp’s 1,800 shared ‘yellow bikes’ and ‘red bikes’ which are seen all over the city, runs an energy efficiency service (Energiesnoeiers) and also has contracts cleaning public buildings – including specialist cleaning of the glass in the ornate Centraal Station – and with an increasing number of private firms, including builders Willemen, who built the iconic Museum aan de Stroom (MAS) which opened in 2011. On the way, Levanto has invented a new profession: recycling officer on building sites.
  • Year-long training schemes in trades including construction, logistics, carpentry and tile- and mosaic-making. Training is organised into four three-month blocks, embracing work attitudes, training (skills such as fork-lift driving but also Dutch language, arithmetic and getting a driving licence), practical issues (assignments teaching for example how to follow instructions and take initiatives), and finally external placements. In this last phase help is also given to find a job. Around 45% of trainees do find a job, and probably half of these keep it for longer than a year, while others lapse back into a periodic periods of inactivity.

A map of Levanto’s activities
A map of Levanto's activities
Enterprise architect
Levanto is the first company I’ve been to that employs its own ‘enterprise architect’, and his name is Phil Daenen.
The company’s innovative approach is based on accentuating the positive through ‘appreciative inquiry’. Its watchwords are “everybody is capable of something”, “together we accomplish more” and “innovation is key”. It therefore stresses solutions rather than problems, and works though partnerships.
To make Levanto more responsive, Phil is re-engineering the company to speed up its strategy cycle from its current yearly rhythm. He wants to make jobs at Levanto ‘active jobs’ – that is jobs which are both meaningful and challenging, which are neither stressful nor pointless, and which generate motivation and learning potential. Because at Levanto, every job has two elements: learning as well as production. This relies on all employees being able to give each other feedback, and this is a skill that has to be learnt (and shop floor workers are better at giving feedback, even if they sometimes do it harshly, than management staff!)
Closer to the market
CIMG1160 Levanto HQ, Clara Snellingstraat 27, 2100 DeurneLife is not easy working with a mixture of public and private funding. Contracts with the Flemish government come in four-year tranches, and the priorities for work integration change for each tender. So towards the end of each period, staff have to be put on notice in case their speciality falls out of favour. A further peril has just become apparent. As of January 2014, companies that are more than 50% reliant on public financing must apply public procurement rules to their purchasing, and this is going to massively increase administrative costs. These rules concern not only publishing calls for tender but also sticking to other policies such as environmental standards.
These factors are leading Levanto towards a more market orientation, even while it is getting harder to find private partners in today’s harsh economic climate. Through partnerships with other social enterprises in Ghent and Limburg it already offers a region-wide service.

SEN now on Storify 16 October 2013

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I’ve just created a Storify for SEN. It may be a bit recursive at the moment, but this will change over time as news items proliferate. A tale of European enterprise and high-tech clustering: Storify was invented by a Belgian, but moved to San Francisco to be taken over by someone with loads of money!

How to engage with stakeholders 15 October 2013

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Policies generally work better if you involve their stakeholders in defining, implementing and monitoring them – so much is generally held to be true. But in the hurly-burly of actually making policies, it’s easy to forget to ask the users and beneficiaries for their views. This issue came to my mind as we discussed strategic partnership and governance at the SEN peer review in Trento in September. I remembered that three years ago INBAS and Engender did a study for the EC on stakeholder involvement in the ‘social OMC‘ (open method of co-ordination). It looked at:
– who the stakeholders are
– what involving them means
– what tools exist for the purpose

Two tables set out the gist of the matter. First, how serious are we in involving stakeholders? The study drew on the Public Participation Spectrum, developed by the International Association for Public Participation (IAP2) which defines five levels of engagement, saying exactly what we mean by information, consultation, involvement collaboration and (that vaguely used term) empowerment:
degrees of stakeholder engagement

Secondly, what actions make stakeholder involvement real? here. The study analysed 23 aspects:
Aspects of stakeholder engagement

Notice that some key issues are often forgotten: what better way to demotivate the people you consult than by never telling them the use you made of their comments? So always feed back to them how you handled their contributions. And what better way to stymie debate by never publishing the background documents in the first place?

The key outputs of the study are set out in a handy leaflet, and the full documents along with a selection of ‘interesting practices’ are on the website too.

Footnote

A propos the study, I notice that the EC’s idea of ‘Elaborating voluntary guidelines on stakeholders’ involvement’, action 49 of the European Platform against Poverty and Social Exclusion, has been “delayed” (see ‘ongoing actions‘).

Success factors for the ESF in CLLD 15 October 2013

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Recently I looked at four cases where the ESF has been involved in community-led local development (CLLD) – Cybermoor in Alston (UK), Cloughjordan Ecovillage (Ireland), InWest in the Rheinische Straße in Dortmund (Germany) and Barka Foundation in Poznań (Poland).
What makes them work? My analysis came out with the following common success factors: they rely on a base of values, social innovation, networks, models, information, premises, entrepreneurial initiative, mixed funding, economic sustainability and celebration.

CLLD success factors wordle

– Values
The cases show that effective local action is built by people and organisations that are inspired by a strong set of values. Barka has developed a local development practice based on social psychological approach to individual self-development. InWest is based on the twin principles of ecological sustainability and self-management. Cloughjordan Ecovillage is driven by the need to pilot an ecologically sustainable way of living, based on the principles of transition and resilience. Cybermoor is also committed to making Alston more resilient, but in this case the threat against which resilience is being built is the decline of public service provision by higher tiers of government.
The self-conscious development of a locality depends on the existence of a vision of how things could be different and better, which is expressed in the objectives of the civil society organisations that lead the process.
– Social innovation
The cases are implementing social innovations to put these values into practice. Cloughjordan Ecovillage is developing systems to guarantee its sustainable future, in a ‘soft’ organisational as well as a ‘hard’ technological way. In order to distribute power and decision-making fairly among all the members of the community, it is using two methodologies. The first is the Viable Systems Model (VSM), first developed by Stafford Beer, which analyses how plants and animals survive and make a system in nature viable, and transfers the lessons of this model from biology to society. The second is sociocracy, which is based on trust, discussion and consensus decision-making, supplies insights about effective management. Blending these together, The Ecovillage is developing a new ‘operating system’ for sustainable living. Organisations such as the Permaculture Association in the UK are also adopting the system.
The Barka Foundation imported the new organisational model of the social co-operative into Poland, piloted it and then mainstreamed this innovation into national legislation. Cybermoor was inspired by the telecottage movement to bring online connectivity to an isolated town. InWest is scaling up the successful experience of its member Union Gewerbehof to assist new future-oriented enterprises to establish themselves in disused industrial buildings.
– Networks
The initiators of these projects are well connected to external sources of new ideas and models. Cloughjordan is part of the Global Ecovillage Network. InWest is connected to European co-operative federations such as CECOP (European Confederation of Workers’ Co-operatives, Social Co-operatives and Social and Participative Enterprises). Barka is a member of EAPN (European Anti Poverty Network).
These networks both supply incoming models of good practice and facilitate the outward dissemination of experiences.
– Models
The cases rely on models of organisation which meet community needs. A number of different models figure, including association, foundation, co-operative (worker, social, enterprise), viable systems model and sociocracy.
– Information
Concerted action by the members of a community can only happen when there are effective paths through which information can circulate among citizens. All the projects use websites, a community newspaper is published in the Rheinische Straße, and Cybermoor is training community journalists to perform this messenger function. It is also developing a ‘community data explorer’ to open up for practical use by the community the masses of hitherto incomprehensible information that public authorities publish, and is piloting a telemonitoring system for care recipients.
– Premises
Communities need physical places to interact in, and the projects have usually acquired these with the help of the local authorities. The Barka communities got their start by being allowed to operate at little or no cost in unused building such as schools. It was later able to buy and renovate two half-built blocks of flats which had belonged to a collective farm that was being privatised, and turn them in to affordable housing. Cybermoor operates from an office in Alston Town Hall. Union Gewerbehof, founding member of InWest, was brought into being by a group that first squatted the office buildings of a derelict steelworks, and later renovated it with Structural Fund support, making it a cornerstone of the area’s regeneration.
This ‘in kind’ help from property owners is an invaluable resource for local groups, and has been moved up the local government agenda in the UK with the passing of the localism Act in 2011.
– Entrepreneurial initiative
The projects share a “can do” attitude to addressing the problems of their locality. Faced with a local issue, they have made an inventory of the resources available and put them together to create a durable new business which can contribute to its local economy. The businesses in question run the gamut from domestic services for elderly and disabled people through public works such as grounds maintenance and cleaning to retail, property development, education, operating tourist attractions and high-tech services such as broadband telecommunications and 3D printing.
– A funding mix
The projects share an attitude of what might be called “principled opportunism” in accessing a variety of different funding streams to finance aspects of their work. This phrase is not meant to have negative overtones, but is a rational response to the continually changing funding opportunities that arise. They are not shy of accessing funds other than the ESF. LEADER is present in Cloughjordan and Alston, and the ERDF in Dortmund. In the area of technology and research, Cloughjordan has accessed the FP7 CONCERTO programme in renewable energy, and Cybermoor has used the Ambient Assisted Living (AAL) programme to finance a telemonitoring project for carers. Barka used PHARE.
They also access private foundations: the Carnegie Trust funds community journalism training in Alston and a number of foundations such as the Danish Grete Mikaelsen’s Foundation have given sizeable support to the Barka Foundation.
– Economic sustainability
While grant funding is often a key enabler for community action, it would fail unless the underlying projects are economically sustainable. Hence the projects typically combine grant income with earned income in a process where the grant allows an activity to be developed, after which it can survive through the sale of goods and services. The trainees at Barka’s Centres for Social Inclusion spend part of their time on practical job training, which creates an income for the centre, and may eventually enable an independent social co-operative to be floated off, to serve both to private and public clients. This also constitutes a seamless transition for the trainees from unemployed to employed status. The Alston Moor Partnership is investigating establishing a wood fuel supply activity to create an income to finance further developments, and Cybermoor sells broadband services. InWest will offer services to property owners, and possibly neighbourhood services to householders. Cloughjordan Ecovillage runs training in sustainability skills and in its new We Create business centre is opening a ‘fab lab’ (fabrication laboratory) where prototypes can be made on a 3D printer.
– Celebration and awards
This is another important factor in motivating community members to engage in joint action. In Dortmund, the Rheinische Strassenzeitung is full of pictures of community members enjoying activities and street parties are held. Cloughjordan Ecovillage holds a monthly open day and communal meals are organised. Alston prides itself on being the first winner of the national award for Social Enterprise Town of the Year. Barka communities celebrate national and church festivals, and its funders have been fêted by the World Economic Forum.

2. Barriers to the use of the ESF for CLLD

The cases reveal the following barriers to development:
– inconsistent funding
This may be caused by changes in policy or simply by the short-term design of programmes. In Ireland, SPIL ran the successful ‘Green Works’ training programme in ecological building and related skills, which proved very popular and had good outcomes. ESF support enabled it to be offered free of charge to trainees, and meant that innovative courses could be developed, modernising the vocational training infrastructure. One of them has been exported to Sweden. Yet there was no opportunity to continue.
– ‘dumb’ indicators
Over and above the administrative complexity that the project initiators have encountered and found burdensome, and which may be thought inevitable when ensuring accountability form the use of public funds, their comments bring out a deeper issue. Cloughjordan and Cybermoor found that the additional costs entailed in ensuring that the wider community benefits from ESF projects can make them uncompetitive when set against standardised training products offered at large scale by commercial providers. Where simple indicators such as hours of training delivered are used, without looking at the medium-term effects on the trainees and on the local economy, the ESF will not be able to engender the changes in the workforce that are needed to help economies to adapt.
This shows the value of a ring-fenced funding stream for innovative projects which allow budgetary freedom to develop curricula in new areas that are crucial for our evolving economies and to reach out to remote areas where the number of trainees is small. By contrast Barka, in its work in Poland’s national social economy development programme, has been able to include relatively expensive actions such as transnational study visits need to implant innovative ideas.

3. Promoting future development

The cases show different development paths:
• Barka started solving the needs of excluded people locally in and around Poznań and has spread its method across Poland using the technique of social franchising. It has piloted new types of institution for work integration, inspired notably by the Italian model of social co-operatives. It has leveraged the success of these pilots to reform the legal framework at national level.
• InWest is the latest in a series of community-based economic structures that have been established in the Rheinische Straße neighbourhood. It acts as an umbrella for the previously established value-led business incubator Union Gewerbehof and other co-operatives and associations, aiming to move one more step up the scale in regenerating this depressed multicultural industrial suburb
• Cloughjordan Ecovillage has implanted an internationally established model in a locality that was ripe for it and offered the necessary conditions (land, village commerce and rail access among them).
• Cybermoor in Alston has brought new technologies to a small isolated town in order to regenerate its economy, following on from the early Scandinavian concept of ‘telecottages’.
The common thread running through the cases is how the project initiators have:
• been aware of developments in the wider world, and have selected and applied the tools that could help them address local issues: in the case of Barka the social co-operative, in Dortmund the co-operative consortium, in Cloughjordan the ecovillage and in Alston the telecottage.
• done social innovation by setting up new community institutions
• acted with principled opportunism to gain the necessary resources, whether these be derelict buildings, land or funding (various types of public and private)
• established an economically viable enterprise by combining this seed funding with a commercial income stream, from the sale of services to a variety of clients: public sector organisations, enterprises and individuals.
The common thread that fuels community-led local development in these cases is a social enterprise approach: that of establishing a sustainable business that meets social needs by the nature of its activities, and reinvests its surplus in its local community.

4. Policy to support the spread of CLLD

CLLD policy components wordle2

Public policy to support the future widespread adoption of this methodology should therefore embrace the following principles:
– Accessible seed funding
• ensure that small amounts of seed funding are available with minimum administrative complication, to allow project initiators to take the first step. The ESF Community Learning Grants used by Cybermoor and BIWAQ used by InWest are examples of this.
• this should apply to funding in a wide range of policy areas: not just employment and social inclusion but also housing, food production, energy, transport, communications and information technology, health and social care among others.
• funding providers should be aware of the cross-links between policy areas: for instance the very many policy domains that need to be joined up to effectively address poverty and social exclusion
– A transmission methodology
Once innovations have been proven at the local level, a framework is needed within which these can be disseminated. From then point of view of the local initiative, the mechanism of social franchising provides a way of spreading new ideas to other locations. A social franchise allows a ‘kit’ of tried and tested components to be taken up and applied by a new group of people, who can benefit from support and quality assurance provided by the originator. The group of franchisees would typically be joined to the franchisor through a secondary structure which can share and transfer good practice and develop common tools.
– Community rights
National governments should delegate power and control over resources to local communities, who know about, and are in a position to remedy, local problems. A strategic framework is given by the UK’s Localism Act of 2011, which aims to empower local communities to take over the provision of public services in the context of austerity in central government spending. A set of Community Rights has been established, which enable local people to draw up a community plan, build affordable housing and community facilities, bid for contracts to provide services, take over redundant assets such as buildings for community use at a discount, challenge planning decisions and closures of facilities and ‘pause’ the sale of assets such as pubs, giving the community time to mount their own bid for it.
Locality, the UK’s leading network of multipurpose, community-led organisations, offers local groups direct support worth £9,500 (€11,000) plus grants of up to £7,000 to prepare neighbourhood plans, and has so far helped nearly 400 groups to do this.
– Strategic framework
This must take place within a regulatory and cultural framework which is propitious. In Poland, Barka, faced with a lacuna in the legal framework for work integration, lobbied successfully for the passing of a series of laws which regulate social employment, social housing, volunteering and social co-operatives. The ESF has now stepped in with a national development programme (Integrated Support System for the Social Economy) which is surveying social economy activity around the country, establishing good practice guidelines and quality standards, and facilitating the dissemination and creation of new local initiatives. The components of the programme are delivered by eight different organisations. This top-down systemic action, guide by the high-level Working Group for Systemic Solutions in the Social Economy which advises the President, is a necessary corollary to the encouragement of community-led local development initiatives. It is based on a partnership between the government and social economy sectors, and is coupled with annual conferences which facilitate dialogue. This Working Group was one of the good practices analysed at the first peer review meeting of the Social Entrepreneurship Network (SEN) ESF Learning Network in Trento in September 2013.

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