The social economy can be broadly defined as that part of the economy between the private and public sectors which engages in economic activity in order to meet social objectives. There is a considerable degree of social economy activity in Ireland and many programmes which seek to support employment or community development objectives also support activities in the social economy, including FÁS community employment and local enterprise schemes, support to partnerships under the local development programme, the EU employment initiative, child care support initiatives and funding to co-operatives located in the Gaeltacht.
However. the implementation of a dedicated support programme represents a new departure. A working group on the social economy was set up on foot of the commitment in Partnership 2000 to undertake a detailed examination of the potential of the social economy in Ireland. The objective was to undertake a detailed examination of the potential of the social economy, both in terms of employment opportunities and in the supply of services such as child care, care of the elderly and services to improve the quality of life in disadvantaged areas.
The report acknowledged the role social economy activities would play in the regeneration of local economies and improving the quality of life in local communities. Arising from the conclusions and recommendations of the working group's report, the Government decided in July 1999 to approve the introduction of a social economy programme through the phasing in of a dedicated programme with effect from 1999 and the establishment of a national monitoring committee representative of the social partners to oversee the development and implementation of the programme.
The national monitoring committee for the social economy programme was established in November 1999. It is chaired by my Department and is representative of the social partners and key Government Departments. Its role is to oversee the development and implementation of the programme. Three meetings of the committee have taken place since November 1999 and the committee has now finalised the framework document for the operation of the programme.
The framework agreed by the national monitoring committee states that the social economy programme, in seeking to maximise the role of social economy enterprises in the regeneration of disadvantaged local communities, will have the following objectives: to promote the emergence and consolidation of the social economy; to maximise the potential of the social economy to generate employment that is sustainable and of high quality, subject to labour market constraints; to regenerate both urban and rural communities by providing urgently needed local services, employment opportunities and experience for people who have been distanced from the labour market; and to promote equal opportunities between men and women.
The programme will be particularly targeted at disadvantaged communities, communities of interest – for example, Travellers and disabled persons – and the long-term unemployed. Under the programme a social economy enterprise will have a traded income with the profits or receipts of activity invested in the viability of the enterprise, rather than accruing to shareholders. It will be professionally managed and will be entrepreneurial in that it functions in the marketplace and has a traded income.
Activities undertaken under the programme will not substitute for any activities which could be more properly funded through existing sources. A sum of £10 million has been provided in my Department's Estimate for 2000 to launch the programme and to provide initial funding for projects. It is envisaged, as in the Partnership 2000 report, that this will rise to £41 million annually when the programme is fully operational. A total expenditure of £213 million was foreseen for the programme over the period of the National Development Plan, 2000-2006.
Community employment has operated principally as a part-time employment experience programme, with the intention that participants would, as a result of the experience gained, have better prospects of gaining employment on the open market. In practice, many of the projects have engaged in community development or services projects which would have similar objectives to the social economy programme. However, the latter programme will fund such projects in the form of full-time enterprises.
Persons employed may be engaged in full-time employment and will operate according to normal business practices. It is hoped that a certain number of the projects may become financially independent over time, either from private revenues, public contracts or mainstream public funding sources. It is expected that a number of existing community employment projects will seek funding as social economy enterprises.
My Department and FÁS are currently finalising the criteria for eligibility of persons who may be funded by the programme. The next step is the establishment by FÁS of the local working groups to ensure the principle of partnership between statutory bodies, the social partners and local community-voluntary interests.
Once they have been established, it is envisaged that community and voluntary groups will be able to apply for funding to establish local social economy enterprises under the programme. There has already been a great deal of promotional effort by FÁS and other interested organisations in the social economy as to how the programme will operate. Once the working groups are up and running, applications can be submitted to the local FÁS office and will be vetted by the local working group in each area.
In summary, the concept of a formal dedicated social economy programme is new in Ireland. A great deal of work has been necessary on the part of the Partnership 2000 Working Group, my Department, FÁS and various other public and voluntary groups in explaining and promoting the concept. I stress that unlike community employment, where the emphasis is on gaining experience and progressing to the open labour market, social economy enterprises will provide full-time employment and valuable community services in a market environment. The social partners and the Government are agreed that if this new programme is to achieve its objectives, very careful planning and development with interested parties and potential project promoters is necessary. Funding is envisaged for the seven-year period of the national development plan. The preparation to date will pay off in the quality of projects and value for money.
The Seanad adjourned at 8.35 p.m. until 10.30 a.m. on Thursday, 6 April 2000.
