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työ- ja elinkeinoministeriö

Year 2010

05.05.2010 09:00

Social Enterprises to Diversify Public Service Delivery

For the sustainability of the economy, it is crucial to examine how the productivity of services could be increased and service delivery methods improved. Social enterprises can significantly diversify the service delivery. They can help to improve the quality of services and produce cost savings. These are some of the conclusions of the report commissioned by the Ministry of Employment and the Economy titled ‘Social Enterprise Solutions for 21st Century Challenges – the UK Model of Social Enterprise and Experience’, published at a seminar at the House of the Estates in Helsinki, on 5th May 2010. The report was commissioned by the Ministry’s strategic welfare project.

The report presents experiences of social enterprises in the United Kingdom. The aim of the report is to spark debate on the use of the model in Finland.

‘The population of Finland is ageing more rapidly than that of any other EU member state, relatively speaking. Meanwhile, one half of local government expenses consist of providing social and health care services. Service needs are increasing, but the dependency ratio required for funding the services is declining. I believe that social enterprises operating in the service market could be a major factor in modernising services,’ explains the report’s author, Jonathan Bland, the Director of Social Business International.

In the UK, the concept of social enterprise is recognised as a form of business aimed at producing socially significant products or services. These companies invest the majority of their profits in achieving their social aims, either within the company itself or in the community. Maximising shareholders’ or owners’ profits is not the main aim. Therefore, the concept and operating principles of social enterprise in the UK are fundamentally different from the definition of a social enterprise under Finnish law, where the emphasis is on providing employment opportunities for the long-term unemployed and for handicapped job seekers.

In the United Kingdom, there are more than 62,000 social enterprises, with a total of more than 800,000 employees. They have emerged from the NGO sector or been established by public sector employees. In the best cases, the social enterprises have achieved cost savings of up to 30 per cent, even though personnel have transferred to them at their previous salary and pension levels. The business model offers opportunities for social innovation; through the commitment of employees and other stakeholders, it can be an inspiring driver for change that places the needs of service users at the core of operations.

In Finland, the social enterprise sector could comprise of small and medium sized businesses that operate in the market for the benefit of society. Social enterprises could also have their roots in the co-operative movement, NGOs, and development initiatives of local authorities. According to the report, some of the issues that must be resolved in Finland include how social enterprises should be funded and what support they can could be offered. The report proposes a phased pilot programme for the establishment of social enterprises in Finland.

On the basis of the report, the Ministry of Employment and the Economy will continue planning measures for the development and adoption of the social enterprise model in Finland. The work will be conducted in close collaboration with the Ministry of Social Affairs and Health, the Ministry of Justice, the Association of Finnish Local and Regional Authorities, representatives from industry and commerce, entrepreneurs’ associations, and the NGO field.

Bland played a central role in developing the social enterprise sector in the UK.

The report can be found at http://www.tem.fi/index.phtml?l=en&s=2086.

For further information, please contact:
Ulla-Maija Laiho, Development Director, Ministry of Employment and the Economy, tel. +358 40 826 8767
Maarit Skogberg, Project Planner, Ministry of Employment and the Economy, tel. +358 10 604 7053
Anne Bland, Chief Executive, Social Business International Oy, tel. +358 2 523 9015, + 44 203 372 2878 or +358 40 852 5656, email anne.bland(at)socialbusinessint.co

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