Social enterprise: action plan

Introduction

The Scottish Government is committed to working with partners to realise the full potential of social enterprise; a way of doing business for the common good that is vital to the economy and for the people of Scotland.

To help guide this work, the Cabinet Secretary for Communities and Local Government and the Cabinet Secretary for Social Security and Older People announced the creation of the Social Renewal Advisory Board. The Board has been working to capture some of the positive policy shifts we have witnessed during the COVID crisis and to recommend policy approaches and practices that will help the country to reduce poverty and disadvantage and embed human-rights based approaches to advance equality. The Board published its findings^[1] in January 2021 and this action plan will complement and help to drive forward the calls for action from the Board in pursuit of fairness and opportunity for all.

Social enterprises will also be vital to help us tackle the other significant and pressing global challenge we face, the climate emergency. Protecting the environment and ensuring a just transition to a net zero future will mean important changes in the way that we live and grow our economy.

But we are not starting from scratch on our ambitions for a greener and fairer Scotland. Our National Performance Framework (NPF) ^[2]articulates the type of country we want to be – one that doesn't just judge Scotland's success on economic growth, but also on the wellbeing of our people and is underpinned by our shared values of kindness, dignity and compassion. And in so many ways our social enterprises are leading by example and showing how business with social purpose can help translate our NPF ambitions into a reality. That's why it is crucial we support our flourishing social enterprise sector to further grow and develop and that is why the actions within this plan, co-produced with the sector itself, help provide the strategic approach necessary to make that happen.

Support For Economic Recovery

The Scottish Government has accepted the recommendations made by the Advisory Group on Economic Recovery^[3] and have set out through our Economic Recovery Implementation Plan (ERIP)^[4] how we will use these to strengthen what we are doing to respond to the economic crisis. We are also committing to going further. The economic crisis provides an opportunity to re-imagine Scotland and to begin building a greener, fairer and more equal society: a wellbeing economy.

In September 2020 we launched our £25m Community & Third Sector Recovery Programme and we have announced a further £14m in February for the next financial year, enabling support for Third Sector and community organisations to continue to the end of June 2021. The programme has two parts, Adapt and Thrive and the Communities Recovery Fund.

The Adapt and Thrive Programme aims to support organisations across the third sector to adapt to the challenges presented by Covid-19 and build back better to thrive in the future. The programme will help organisations to make the necessary changes to operate sustainably so they can continue to have a positive impact on people and communities.

The Communities Recovery Fund aims to support charities, community groups, social enterprises and voluntary organisations in supporting people and communities through the shift from lockdown to recovery.

As well as the Community & Third Sector Recovery Programme we will continue to listen to and work with the sector partners and national agencies to ensure that we recover quickly and with a stronger thriving social enterprise sector.

The Contribution Of Social Enterprise

Social enterprise is critical to Scotland's wellbeing economy. Across the country, social enterprises are already reimagining and embracing a fairer way of doing business. Covid-19 has seen social enterprises stand up and play vital roles within their communities, displaying innovation and determination to support the most vulnerable.

Social Enterprises in Scotland support more than 80,000 jobs and contributed £2.3bn (Gross Value Added) to the Scottish economy in 2019^[5]. These social enterprises trade for the common good and largely, do so in a way consistent with the shared principles and characteristics set out in the Voluntary Code of Practice for Social Enterprises in Scotland^[6].

Inherent in the social enterprise approach is a singular focus on addressing complex social and environmental issues. Social enterprises demonstrate how Scotland's businesses can help us work towards a modern wellbeing economy through prioritising sustainable growth, environmental responsibility, promoting fair work, inclusion and opportunities for all.

About This Action Plan

This action plan forms part of the Scottish Government's long-term commitment to realising the full potential of social enterprise.

In December 2016, we published Scotland's Social Enterprise Strategy ^[7]- a wide-ranging and ambitious 10-year framework.

As part of the Strategy in April 2017 we published our first three-year action plan^[8], which set out important early steps to deliver on our ambitious vision for the sector. Key achievements since that time have included:

• Investing over £30 million into Scotland's social enterprise sector
• Promoting social enterprise to young people in over 850 schools across Scotland
• Investing £5 million in start-up funds to support more than 300 new social enterprises
• Providing specialist business advice to more than 4,020 social enterprises
• Establishing a £17 million fund providing affordable loans to social enterprises

Since then, evidence from Scotland's Social Enterprise Census project (2019)^[9] has shown how the sector has grown substantially in scale, reach and impact, although many parts of the sector remain fragile.

While much has been achieved during the period of the first Social Enterprise Action Plan (2017-2020) much remains to be done.

Despite considerable innovation and resilience, the fragility of the sector has been revealed by the events of 2020. In response to the Covid-19 situation, the Scottish Government launched a £350m emergency communities fund including:

• A £50 million Wellbeing Fund provided support to Third Sector Organisations, including charities and social enterprises,
• A £25 million Third Sector Resilience Fund provided an emergency fund for charities, community groups, social enterprises and voluntary organisations working in Scotland.
• A £25 million Community and Third Sector Recovery Fund to deliver financial support and access to specialist advice and support.

Now, as we seek to build our recovery and embrace new opportunities on the horizon, this new action plan describes our priorities for 2021-24, and details how we will work across the public sector and with partners to build forward and put the social enterprise model at the heart of Scotland's recovery.

Strong collaboration has helped to shape this action plan. It was informed by an extensive process of consultation throughout the social enterprise sector, to reflect the views and aspirations of frontline enterprises, as well as working across government to ensure coherence with wider government policy. A series of consultation events were undertaken which engaged over 500 social enterprise representatives across the country and written responses were received from almost 300 social enterprises. The development of the action plan was also informed by evidence collected through Scotland's Social Enterprise Census; a biennial analysis of the scale, characteristics and needs of the sector.

Focus Of The Action Plan

This action plan reasserts the Scottish Government's long-term vision of social enterprise at the forefront of a new wave of ethical and socially responsible business in Scotland; far-reaching and becoming central to the way that Scotland chooses to do business.

The plan sets out how we will take action over the next three years to:

• Work across government, and with national agencies, to create the conditions, opportunities and investment necessary for social enterprises to fully realise their potential.
• Develop the national ecosystem of support for social enterprises, ensuring that it remains fit-for-purpose and world-leading.
• Work closely with sector partners to support the recovery from the Covid crisis whilst also looking to raise ambitions, grow capacity, spur innovation, and ensure the sector is ready to seize opportunities.
• Develop a third sector equalities baseline to ensure that all activity supported by the Third Sector Unit is calibrated to tackling the barriers faced by people with protected characteristics. With a focus on social enterprise as the first action area.

The pages that follow set out some important guiding principles and outline how we will support the recovery and deliver on the three key priorities set out in Scotland's Social Enterprise Strategy of:

• Stimulating Social Enterprise
• Developing Stronger Organisations
• Realising market Opportunity

We strongly believe that social enterprise can play a pivotal role in delivering on our central purpose and key outcomes as set out in the National Performance Framework, making Scotland a more successful country, with opportunities to create sustainable and inclusive growth, reduce inequalities and increase wellbeing for all. Whilst, Covid-19 has presented significant challenges for the sector, these priorities increase in importance.