Minister pledges to refocus Government's efforts on funding for sector as she takes Social Enterprise brief
The newly appointed Minister for State with responsibility for Social Enterprise has conceded that the Government didn't sufficiently prioritise the sector for the past year, but has pledged to identify new financing options that could help social entrepreneurs create an extra 25,000 jobs by 2020.
Minister for State Ann Phelan told the Sunday Independent that the sector's criticism of the Government for leaving the Social Enterprise post empty for more than a year following the 2014 cabinet reshuffle is "not unjustified", but that she is already working to provide access to finance and capacity building for Social Enterprises.
"I know that the sector believes there has been a lag for the last year since Minister Sherlock was moved, but I am really committed to this and I will hit the ground running with the Social Enterprise Task Force. I want a more people based, community based business sector developing in Ireland, as we know that the area has tremendous potential for growth", she said.
A 2013 report by Forfas estimated that the social enterprise sector in Ireland employs between 25,000 and 33,000 people in 1,400 social enterprises, with revenues in excess of €1.4bn - but the report also noted that if the sector reached EU average levels, it could support as many as 65,000 jobs.
The report stated that the sector doesn't need a State handout - but that better access to finance and capability building, along with adjustment to legislation and procurement practices would boost the sector significantly.
"The Minister's comments are very welcome, and a positive step towards the development of a national social enterprise strategy to develop and support the sector", according to Tanya Lalor, social enterprise specialist at TSA Consultancy.
"Social enterprises are active in the areas of childcare, housing, urban regeneration, recycling and waste management, and employment and training, to name a few. They have a major contribution to make in social and economic terms - and it is great to see recognition of this.
"However the sector is in need of a national strategy and support mechanisms which would engage a range of government departments, state agencies and local authorities."
Ms Lalor pointed to EU procurement directives as one pathway which provides new opportunities for social enterprise development and said forthcoming national legislation should make full use of these opportunities.
As social enterprises are set up to bridge gaps in government services, they often lack sufficient training and structure to grow at the right pace. And as they reinvest profits back into the services they provide, traditional lenders can be slow to lend.
It's an assessment that Karen Leigh agrees with. When she realised that the two hours of occupational therapy her child needed per week was going to cost more than their mortgage repayments, and as the HSE's waiting list was so long, she decided to set up a not-for-profit alternative, Sensational Kids in Kildare town.
Since its foundation in 2007 it has provided more than 3,000 children with occupational therapy, speech and language therapy and psychological assessments among other services. It does so without HSE-style waiting lists and at approximately half the price of private services. It currently employs nine people, but cannot expand due to a lack of financing.
"We are constantly being asked to bring Sensational Kids to other places, and we really want to do that, but the challenge as a social enterprise that wants to scale up is that you can't borrow from banks to finance that growth, and fund-raising is time consuming and can take focus off the core objective," she said.
She also agrees that the Government needs to do more to support the sector with capacity building, to help viable social enterprises to set up quicker and grow sustainably.
"When we were setting up we could have done with training, and if we had better mentoring and better funding we could have opened sooner. It makes sense for the Government to provide that, as we take thousands of children off their waiting lists each year."
Minister Phelan has pledged to identify potential areas of funding from government in order to build a war-chest that can be used to help viable social enterprises borrow money to expand.
Sunday Indo Business