Small business, meet the Big Society

accawebmaster —  2 March 2011 — Leave a comment

by Emmanouil Schizas, senior policy adviser, ACCA

For a project billed as the antidote to Big Government, the Big Society has an impressive number of civil servants working on it. At ACCA, we are used to staff from the UK Department for Business, Innovation and Skills (BIS) and other departments calling to discuss government initiatives but, even by these standards, the drive to operationalise the Big Society is intense.

The general narrative appears to be this: the government can no longer afford to pay for public services to the extent that they used to, therefore communities and businesses will have to be encouraged and enabled to take up the funding and/or management of some of these services. Overall, the supply of public services should recover quickly or even remain unchanged in the face of cuts in the public sector.

Last year, a major survey for the World Economic Forum confirmed that SMEs are seen by more people around the world as 'values-driven' than governments, big businesses or the institutions of global governance. Although the UK was not surveyed, it's probably fair to say that the UK public and policymakers largely share this view. Hence, the expectation that smaller businesses, which presumably care more about their local communities than faceless bureaucracies in the private or public sectors, can help make the Big Society a reality.
 
In a rare large survey of SMEs on the subject run by Touch Local, 43% claimed to understand what the Big Society represents, although as their comments indicated, their understanding implies neither engagement nor approval. Happily, we have an indirect way of gauging small businesses' taste for the Big Society, as the UK Citizenship Survey asks the self-employed and staff in small businesses about what they do, or would like to do, for their local communities. Ironically, fieldwork for the last-ever edition of the UK Citizenship Survey will be completed this month, after which the whole thing will be scrapped.

What the 2008/9 Citizenship survey (the latest whose data are freely accessible) found was that the self-employed gave twice as much to charity and spent on average 16% more time in civic participation, as well as 26% more time volunteering, than employees did. Moreover, when they do get involved, the self-employed seem to have more success improving local services. That said, no self-employed person was able to put more than six hours a day into this type of work, and their typical contribution was closer to three hours a month.

If the bosses can only help so much, could they perhaps assist their staff who want to do more? The quick answer is not really. Engaging the community in such a way requires resources that small businesses don't have. Only about one in six (16%) employees in businesses with fewer than 25 staff said their employer had a scheme in place for helping out in the community. The smaller the business, the less likely it is to have such a scheme, and the more likely it is to support only giving and helping programmes related to its commercial business. On the other hand, staff in small businesses were more likely to participate in these schemes where they existed: 39% were involved in helping out in the community, against 25% in large businesses (those with 500+ staff).

There is other good news, of course. Not everyone goes into business to change the world, but about a quarter of new UK entrepreneurs do set out to meet social objectives in addition to, or instead of, financial ones. Data from the Global Entrepreneurship Monitor (GEM) suggests that around 2% of the UK's adult population (more than 800,000 people) were involved in early stage social entrepreneurial activity in 2009. The GEM data also offers some hope that the appetite for this should persist once the cuts have taken hold: in 2009 social entrepreneurship was thriving in the US, traditionally seen as a small-state country, as well as the more enlightened but recently bankrupt country that is Iceland.

However, there is a catch: the GEM data also shows that most social enterprise activity in the UK is not attached to an earned-income strategy (see table), but is funded wholesale by either charitable giving or the state. The latter is problematic because it means that the Big Society will have to compensate for the scaling back of social enterprise activity bankrolled by the state as well as local government services. A recent review by the independent fact-checking website FullFact found that although very small charities tend to rely mostly on private funding, the larger ones tend to be much more dependent on the public purse.

Hence, the scepticism expressed by many small business owners when asked in a recent small survey whether they thought social enterprises would benefit from the retrenchment of public service provision.

All of the above suggests that the mechanics of the Big Society are at odds with the reassuringly tribal image of 'people pulling together' that is often invoked by the government. What is becoming operationalised as the Big Society requires people and organisations to assume liability, to manage budgets and to employ staff.

Inevitably, the expertise in all of these areas does not lie with kind-hearted neighbours 'helping when they can' but with organisations that are established and well-resourced or single-mindedly mission-driven, or both.

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