IRELAND Patricia O’HARA Centre for Co-operative Studies

Centre international de recherches et d'information
sur l'économie publique, sociale et coopérative
IRELAND
Patricia O’HARA
Centre for Co-operative Studies
University College Cork
June 1999
http://www.ulg.ac.be/ciriec/
IRELAND
June 1999
Patricia O’HARA
Centre for Co-operative Studies
University College Cork
2
METHODOLOGICAL FORWARD
In Ireland the concept of the « Third sector » as a distinct field of activity is not part of either
academic or policy discourse. Therefore, there are few sources of knowledge of the sector as
a whole. No category « Third sector » or « Social economy » exists in official statistics and
we were unable to identify even one study which focused on employment in the Third sector,
even as a secondary concern. Furthermore, there are no employment or labour market studies
which provide data on employment in the Third sector or the Social economy. Indeed,
relatively few studies even acknowledge its existence as a relevant category. Even by
extending the scope of the topic we could identify only nine sources for Inventory Nr 1.
The absence of such data presented the Irish research with a considerable challenge. In
attempting to address the topic of employment in enterprises and organizations of the Third
system and in completing the various inventories, we have tried to deal with the absence of
both the conceptual categories and the data by using whatever limited documentary sources
were available, however tangential to the topic. Inevitably, we have had to rely to a very
considerable extent on personal enquiries and on interviews with key informants and there are
significant gaps where the information simply was not available.
One of the most frustrating aspects of the research was the realization that a lot of information
did exist in individual organizations but that it had never been assembled for the purpose of
understanding the nature and extent of employment in Third sector organizations. It became
clear that it would be possible to arrive at a considerable understanding of employment in the
Third sector and recent trends, through a systematic process of categorization of organizations
and assembly of data from their records and those of public institutions which support them.
However, the size and complexity of such a task was beyond the scope of the present study.
Until such data are assembled and analysed, any understanding and comparative analysis of
the Third sector in Ireland will inevitably be severely limited.
Data from the Johns Hopkins Comparative Nonprofit Sector Project (see Salamon and
Anheier, 1998) do throw some light on the sector in the various countries involved in the
cross-national study and Ireland is included as one of the participant countries. However, the
range of organizations and fields of activity covered by the term « non-profit activity » and
included in the study is different from and wider than the present study. For instance, the
Johns Hopkins Project includes the health, education and research sectors and this really
skews the data in the Irish case as we shall see below.
3
I
THE THIRD SYSTEM OR SOCIAL ECONOMY IN IRELAND
Introduction
Before turning to consideration of the Third sector, it is relevant to point out that the 1990s
have been a period of exceptional economic growth in Ireland. Over the decade, GDP has
grown by an average 7% per annum. Employment has increased by more than one quarter
with unemployment falling from almost 16% in 1993 to 7% in 1998. During 1998
employment grew by 4.5%. In 1999, with an expected growth rate of three times the average,
Ireland is expected to top the league of OECD countries for the fifth year in succession.
Inflation is expected to fall under 2% and unemployment to close to 6%. Given these
favourable economic conditions, Ireland has been dubbed the « celtic tiger » economy and
can no longer be considered one of the poorer European states.
Despite this growth, poverty and social exclusion persist; new jobs are being filled by young
people, returned emigrants and women returning to the labour market. Many long-term
unemployed people are significantly disadvantaged in a labour market which increasingly
demands skills and formal qualification. Thus, skill shortages in some sectors coexist with
significant levels of long-term unemployment. Up to one third of the population are at risk of
poverty and Ireland has the second highest national level of child poverty in the EU. The
government national anti-poverty strategy introduced in 1997 identified five key areas for
action − educational disadvantage, long-term unemployment, income adequacy,
disadvantaged urban areas and rural poverty − and has set objectives, targets and a number of
policy actions in each of these areas.
This, then, is the context of the Third sector/Social economy in Ireland. As pointed out in the
forward, the types of organizations and enterprises identified as coming within the scope of
the CIRIEC study (non-profit organizations, or those with particular organizational structures
such as co-operatives) do exist in Ireland, but they are not grouped or identified as a distinct
« Third sector » or included in official statistics under a separate heading. Despite this,
organizations which generally correspond to the definition of the Third sector or Social
economy have existed for a long time and are found under a range of classifications, which
are not necessarily mutually exclusive. However, it seems useful to begin this report with a
brief outline of various categories which can be included in this very diverse sector in order to
convey some sense of the kinds and range of organizations involved.
The Non-profit Tradition
Non-profit organizations have played a very significant part in the provision and delivery of
health, education and personal social services in Ireland. Much of this is associated with, and
has evolved from, the activities of religious organizations, mainly the Roman Catholic
Church. The churches had a very considerable role in the establishment and operation of
services in the fields of health, education and welfare. In the health field for instance, the
establishment of voluntary hospitals began in the early decades of the eighteenth century and
gained momentum with the involvement of Catholic religious orders in the nineteenth
4
century. Catholic religious orders have also been dominant or sole providers in the fields of
mental and physical disability, residential child care and care of the elderly.
The Catholic Church has also had a very extensive involvement in education, and although
the numbers of religious personnel have declined rapidly in the past two decades due to the
fall off in religious vocations, the Catholic Church still has considerable influence in this
field. Moreover, the organizational structures of education originally set up by the churches
(i.e. non-profit schools) remain the dominant form. Consequently, it is not surprising to find
that, in terms of the non-profit share of total employment, Ireland ranks near the top of the list
of countries in the Johns Hopkins Comparative Nonprofit Sector Project.
The Johns Hopkins Comparative Nonprofit Sector Project
In this cross-national study total employment in the non-profit sector in Ireland in 1995 was
estimated at 118 664. Employment in non-profit schools accounted for more than half (54%)
of all the jobs in the non-profit sector and for 6% of all non-agricultural employment in
Ireland. Four fifths of all non-profit employment was in the education and health sectors
combined, amounting to some 96 110 full-time jobs. Not surprisingly, the pattern of nonprofit structure which Ireland exhibits is referred to as « education dominant » in the Johns
Hopkins study. Ireland ranked well below the European average in virtually all other fields
of activity, most notably in social services which accounted for only 4.5% of non-agricultural
employment compared to the European average of 26.4%, and in culture where the
comparable figures were 6 and 10% (Salamon and Anheier, 1998).
The Co-operative Movement
The co-operative movement has had a long tradition in Ireland, as the first co-operative dairy
was established in 1889. By 1911 the number of dairy co-operatives had grown to 326 and the
movement was a significant economic force in what was a predominantly agri-based
economy until well past the mid-twentieth century. The strength of the movement has always
been in the agricultural sector and dairy co-operatives have evolved into multi-purpose
organizations while co-operative structures are prominent in agricultural inputs, livestock
breeding and marketing. There were 255 agricultural and horticultural co-operatives
registered in Ireland in 1996, employing 33 500 people and with a total of 186 000 members.
In recent years increased international competitiveness has prompted agri-food co-operatives
to pursue goals of rapid scale expansion. This has induced a number of the largest multipurpose co-operatives to merge and to source equity from the stock market by becoming
publicly listed companies. While most have retained elements of their co-operative structures
and principles in this context, the bigger organizations effectively operate as large transnational corporations.
In the non-agricultural sector, growth in the numbers of organizations registering as cooperatives is quite modest. There were 678 non-agricultural commodity co-operatives in
Ireland in 1996, employing an estimated 1 000 full-time staff equivalents and involving 78
000 members.
5
Credit Unions and other Mutuals
Credit unions are mutual organizations whose members collectively save and lend to one
another at a fair rate of interest. They are distinguished by the idea of a « common bond »
which can be either community, occupational or associational and is the basis for membership
and solidarity. There were 435 credit unions registered in the Republic of Ireland in 1997 and
about 90% of these are community bond unions where the members live and work in the local
area. Each credit union operates autonomously and profits are distributed to members in
proportion to their transaction with the credit union, or may be used to provide additional
services to members. The Credit Union movement relies heavily on volunteer workers but has
become increasingly professionalized, particularly in larger communities. Credit Unions are
run on a commercial basis and receive no state subsidies. The rest of the mutual sector is
relatively insignificant, and comprises less than 100 organizations mainly involved in smallscale lending and insurance activity.
The Voluntary and Community Sector
The term « voluntary sector » or « voluntary and community sector » is used to describe
organizations based largely on volunteer activity and this sector does include many which
would be categorized as « associations and foundations ». Examples range from relatively
large facilities providing health services, to professional associations, advocacy organizations
and self-help organizations. Recent estimates suggest that there are about 500 voluntary
organizations involved in such fields as social services provision, campaigning and advocacy,
support and self-help, representation and co-ordination and cultural activity. Many such
organizations have undergone significant professionalization in the past decade; those
involved in advocacy and representation, for instance, have had to respond to the rapid
modernization of Irish society and the increasingly complex and inclusive policy-making
process. As yet however, the impact on employment in this sector has not been assessed and
there are no statistics or data which track employment in the sector. It is also notable, that
unlike other European states, there is no federal which represents the voluntary
sector/voluntary organizations.
Local Partnerships and Social Enterprises
Local development partnerships are increasingly being seen as constituting a distinct sector,
primarily because they have emerged and grown in the context of specific public programmes
to address social exclusion and promote « bottom up » development during the 1990s. They
can be seen as Third sector organizations themselves and are also significantly involved in
sponsoring and supporting social enterprises and in policy development regarding Social
economy issues. It is mainly in this context that the concept of the Social economy and social
enterprises have come into significant usage in Ireland in recent years.
In this context the Social economy is not thought of as being synonymous with what is more
broadly termed the voluntary sector (although it is considered to overlap with this sector), or
with non-profit organizations, but more as a distinct sphere, « between the public and private
sectors which engages in economic activity in order to meet social objectives » (Social
economy Working Group Report, 1998). Enterprises in the Social economy therefore, are
distinguished by their objectives and activities rather than their organizational form. Such
enterprises are typically engaged in a range of Social economy activities such as the provision of
resource centres and the development and coordination of « proximity services » such as child
6
care and community care for older people or people with disabilities, or transport, social
housing, training and capacity-building. They might also be involved in environmental
projects or culture and heritage activities.
Walsh et al. (1998) have recently provided a typology of local partnership organizations
which have emerged from various programmes for local socio-economic development in
Ireland. Drawing on this we can identify around 324 local partnership organizations as
follows:
Local Development Partnerships of which there are around 65. These are mainly associated
with the delivery of various EU sponsored local development programmes (e.g. LEADER,
EU Programme for Peace and Reconciliation) and partnership is a defining feature of their
organizational form. They are involved in integrated socio-economic development in a
defined local area for which they prepare a local action plan. Their activities include support
for micro-enterprises, community capacity-building and measures to tackle social exclusion
such as long-term unemployment and educational disadvantage.
Local Service Partnerships of which there are around 40. These are local co-ordinating
structures which involve a diversity of service providers and users. They are generally
focused on specific issues such as training and employment, drugs, money advice and
budgeting.
Community Development Organizations of which there are around 150. These are a catch-all
category of local, community-based organizations involved in economic, social and
community development. They are usually involved in generating local enterprise and
employment and in encouraging community and personal development and are characterized
by a high degree of voluntarism. Obviously these organizations are a sub-set of the voluntary
/community sector described above.
Work Integration Enterprises
Social enterprises categorized here as « work integration » do not have a specific name or
constitute a recognizable sector in Ireland. However, for the purposes of this study, we have
distinguished organizations concerned with providing work and labour market integration for
the socially excluded, usually for people with disabilities. The majority are run by voluntary,
non-profit bodies in the disability field and provide training and employment in what are
conventionally referred to as « workshops » or « sheltered employment ». Around 26 such
organizations run enterprises which provide goods and services in 19 different sectors.
However, although they are commercially oriented, these enterprises rely to a very
considerable extent on direct and indirect state support. Their parent organizations are
financed through a combination of state subsidy, donations and commercial profit.
In 1994 the largest non-profit organization in this area (Rehab Group) established a separate
enterprise company to develop viable businesses. Building on the commercial base of some of
the existing « workshops », this has brought together seven companies from the food, textile,
electronics and recycling sectors. This model has begun to be adopted in other enterprises
established for on-the-job training for the long term unemployed in an attempt to reintegrate
them back into the workforce.
Housing Organizations
7
One of the most significant developments in the Social economy in Ireland in recent years has
been the increasing role of voluntary organizations in the provision of social housing.
Through a capital assistance scheme, non-repayable loans are made available by the State to
approved voluntary or non-profit housing associations to assist the provision of rented
accommodation, particularly for those with special needs such as the elderly, people with
disabilities and homeless people. A quarter of social housing provision in Ireland each year is
now provided by the non-profit voluntary housing sector and this sector managed just under
10% of the non-private rented sector in 1996. More than half the social housing provision for
elderly and disabled persons in the period 1988-1995 was accounted for by the non-profit
sector. There were 350 housing associations registered in 1996 and 100 affiliated to the Irish
Council for Social Housing.
The Social economy and Public Policy
In Ireland the terms « Social economy » and « social enterprises » have become part of policy
discourse only since the mid-1990s. This is due primarily to the attention give to the Social
economy as a potential source of employment in European Union documents in recent years
(European Commission, 1993, 1994, 1995). One of the first references to the sector in Irish
policy discourse was in a report on the employment potential of the services sector. This
report identified the Social economy as « concerned with meeting real demands which cannot
be fully met by the market alone and are not provided by the public sector. It represents a
continuum of delivery possibilities between fully commercial and public provision » (NESF
1995, p. 19).
Subsequent discourse has emphasized different aspects of this continuum involving varying
levels of public assistance, trading income, voluntary activity, private support and user
solidarity (see PLANET, 1997; Community Workers Co-operative, 1998).
Public policy in Ireland in the 1990s has been characterized by social partnership (or
corporatism) involving the negotiation of consensus on national economic, and social
objectives between government, employers, trade unions, farmers and community interests.
This has been embodied in a series of national agreements for the years 1988 to 19991 of
which the most recent − Partnership 2000 for Inclusion, Employment and Competitiveness
1997-1999 − is currently in operation. The Social economy was raised as an issue by
representatives of the voluntary/community sector in the negotiation of Partnership 2000 so
that a commitment to undertake a detailed examination of its potential was incorporated in the
final agreement.
In 1998 a government-sponsored working group on the Social economy was set up to give
effect to this. Its brief was to examine the potential of the Social economy « both in terms of
employment and also in the supply of services, such as childcare, eldercare and services
improving the quality of life in disadvantaged areas ». The Working Group comprised
representatives from various government departments, employers, trade unions and other
relevant interest groups. The Group defined the Social economy broadly as « that part of the
economy between the public and private sectors which engages in economic activity in order
1
These social partnership programmes were: Programme for National Recovery (PNR) 1988-90; Programme
for Economic and Social Progress (PESP) 1991-93; Programme for Competitiveness and Work (PCW) 1994-96;
Partnership 2000 for Inclusion, Employment and Competitiveness 1997-99.
8
to meet social objectives ». They did not see it as their function to produce a definitive
description of the entire Social economy, but rather to explore aspects of its potential for
employment creation and quality of life improvement in disadvantaged areas.
In practice, the Working Group used quite a specific working definition of the Social
economy to provide a framework for their considerations. This was based on the following
typology of social enterprises, which they acknowledge to be a sub-set:
• community business, ultimately fully commercial in operation;
• deficient demand social enterprises where community demand for goods or services is not
matched by ability to pay due to disadvantage;
• enterprises based on public sector contracts which do not yet exist to any considerable
extent in Ireland (Social economy Working Group, 1998: 5).
One of the key conclusions of the Group was that the main state support to the sector has
come in the form of a labour subsidy through the various labour market integration
programmes. The second significant source of state support is through programmes to
combat disadvantage and social exclusion. The Group set out a series of recommendations
for developing the Social economy as a means of combating disadvantage and regenerating
communities. Specific financial and institutional supports were outlined and are discussed
below. The report contains no estimates of existing employment in Social economy
organizations nor any assessment of its possible employment potential. Nor does it address
the issue of public service contracts for Social economy organizations.
It is important to recognize that the concept of the Social economy which is used and
understood in Ireland generally at present is that put forward in the Working Group Report.
This is in line with usage of the term by the European Commission in the documents cited
above, rather than with the widerer usage common in other European countries and being
used in this study, which includes voluntary organizations, co-operatives, mutuals and
charities.
9
II
TYPES OF ORGANIZATIONS AND ENTERPRISES
OF THE THIRD SYSTEM
The compilation of Inventory Nr 2 has been conditioned, to a considerable extent, by the
availability of information and the existing categorizations in published sources. The latter
are, in turn, very much influenced by the legal status of some non-profit organizations,
particularly those regulated by the Registrar of Friendly Societies. The Registrar has
responsibility for the registration and regulation of Credit Unions, Co-operatives (registered
as Industrial and Provident Societies), Mutuals (registered as Friendly Societies) and Trade
Unions. Many Third system organizations are legally registered under company law as
companies limited by guarantee but there is no separate data source on these companies.
Information on other organizations in the Inventory is compiled from umbrella organizations
(housing), directories (voluntary/community organizations), research studies (local
development organizations) and one major work integration organization, catering primarily
to people with disabilities.
The predominant picture which emerges from the Inventory is that of a clear distinction
between what might be referred to as the « old » Third sector organizations, characterized by
the non-profit criterion and by their organizational form, and the « new » Social economy
organizations primarily driven by their service and development activities. The former could
include co-operatives, mutuals, credit unions and parts of the voluntary/community sector.
Included in the « new » Social economy could be those voluntary and community
organizations responding to new needs or involved in public contracts, housing associations,
local development organizations and some insertion enterprises.
The 700 co-operatives registered in 1996 have been divided into two categories. The agricommodity co-operatives have been treated separately because they are effectively
commercial enterprises which retain an organizational form historically associated with the
agri-sector. In this sense they are different from the second group of co-operative enterprises
which is primarily focused on members interests and service provision. The link between
activity in the rural economy and the co-operative as an organizational form is evidenced by
the fact that many of the co-operatives in this section are involved in various aspects of rural
development. The only noticeable increase in the numbers of co-operatives being established
in recent years is in the tourism and local development fields. The sector is unlikely to
experience significant gains in the numbers employed.
Credit Unions have a specific legal framework which was updated in 1997 Credit Union Act.
The purpose of the Act was to consolidate existing legislation and to provide an updated
framework for the development and supervision of the credit union movement. The Act,
which was a response to demands from the credit union movement to be facilitated to
modernize and extend its services, safeguards the social and mutual purposes of the credit
union movement and allows for an expansion of the range of services which could be offered
to members as well as adopting new limits for shares, deposits and loan.
Credit unions effectively operate quite independently as a sector distinct from other Social
economy organizations. Within the sector, the capacity for group solidarity and action is
limited by the autonomy and independence of each individual credit union. However, it is
10
likely that employment will continue to grow as credit unions expand their range of services
and become more professionalized.
The mutual sector is relatively insignificant in size and there are fewer than one hundred
mutuals registered in Ireland under the Friendly Societies Acts. Employment in the sector is
not significant and the numbers of societies registered have declined by 28% over the period
1992-1997. This is mainly due to mergers and privatization, but also to the fact that this form
of structure is no longer popular.
The non-profit housing sector has been treated separately in the Inventory because of the
increased involvement of the sector in the provision of social housing in recent years. The
main organizational forms in the non-profit housing sector are associations, trusts and cooperatives. Around half of those housed are elderly persons. Other key target groups are the
homeless, low-income families and single people and people with disabilities. Employment
in this sector is relatively modest and unlikely to grow very significantly. Most smaller
associations do not have full-time staff and many are established to undertake a single
housing project and may be relatively inactive once it is completed.
The voluntary/community sector is the main point of overlap between the old and new social
economies. As pointed out in the Inventory, it is a very diverse sector but organizations
engaged in service provision are the most prevalent. The term « service provision » is rather
imprecise but, while there are many long-established organizations in this sector, new social
enterprises are emerging to respond to the demands of modern living. Examples include
childcare services, community-based counselling, and recycling. This sector is based to a
very large extent on voluntary activity so that numbers of full-time employees are relatively
small, but are nevertheless increasing. According to a recent study, 44% of organizations had
no full-time staff in 1995 (down from 65% in 1975) and most had fewer than 10 staff. This
sector and local development organizations rely heavily on active labour market integration
programmes to staff their various projects.
Ireland has a long tradition of local development which received very little state support or
acknowledgement until the 1980s when local and community development came to be seen as
a strategy for combating unemployment. Support for such « bottom up » activity has
stimulated innovative responses to social exclusion. Although primarily engaged in
community development in the broadest sense, partnerships and community groups have had
to search for appropriate responses to social exclusion at local level through creating or
supporting social enterprises which respond to unmet social needs while simultaneously
creating local employment. Local development therefore provides one of the most dynamic
contexts for the development of the Third sector or Social economy in Ireland at present.
Included in the Inventory are statistics from a small survey of social enterprises which,
regrettably, did not contain useful data on employment. However, it did indicate that there is
considerable dynamism in the sector.
The final entry in the Inventory of types of organizations and enterprises is an example of
what have earlier been termed « work integration enterprises ». The work of the Rehab Group
for which there are some data available has been included here, primarily (in the absence of
data on a general category) to indicate the existence of such organizations and the scale of
operations of the Rehab Group. The recent expansion of the Group’s activities would seem to
indicate considerable employment potential for this type of Third sector organization.
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12
III
TYPES OF SUPPORT ORGANIZATIONS AND RESOURCE CENTRES
FOR THIRD SYSTEM ORGANIZATIONS
Support organizations identified for Inventory Nr 3 in Ireland are of three types:
1. Organizations which provide a collective voice for particular organizational forms or
specific sectors within the Third system. There is no national federation for voluntary
organizations in Ireland. Five other organizations were identified − the Irish League of
Credit Unions, National Association of Building Co-operatives, Irish Co-operative
Organization Society, Irish Council for Social Housing, Irish Trade Union Trust.
2. Public or largely publicly funded organizations of which four were included − Udaras na
Gaeltachta, Co-operative Development Unit, the National Social Service Board and Area
Development Management Ltd. (ADM).
3. A single dedicated unit to support Social economy activities at local level which is itself
part of a larger Social economy organization.
Organizations which act in a collective or federative way for particular organizational forms
or sectors within the Social economy are primarily fulfilling a solidarity, information and
support function for member organizations. Such bodies have not been prominent advocates
or promoters of the development of the Third sector/Social economy generally and have not
been associated with recent discussion on the employment potential of Social economy
organizations or the sectors’ capacity to address of social exclusion.
Two of the publicly funded organizations provide support, mainly in the form of grant aid and
advice to quite small and specific sub-sectors, namely small community-based co-operatives
in Gaelic-speaking areas and workers co-operatives. In each case support is provided to fewer
than 25 enterprises annually and targeted support to the Third system is a relatively small part
of the sponsoring organization’s overall activities. Both organizations operate as catalysts and
in a proactive way in regard to co-operative development.
The National Social Service Board provides a more specific general support and service to the
voluntary and community sector, mainly information, advice and training. In this sense their
role is one of resource provision rather than a catalyst and proactive one in relation to the
formation of new organizations. Finally, ADM, because of its remit as the organization
responsible for supporting local social and economic development in Ireland plays a
significant role in relation to stimulating and supporting « new » Social economy activities.
By providing a range of assistance to Partnerships and Community Groups, ADM has both
directly supported what are themselves Third sector organizations and, in several cases,
stimulated them to establish new social enterprises. The organization has also contributed to
discussion and awareness of the Social economy in the context of social exclusion by
sponsoring research and discussion on social enterprises and community business (see
Mallaghan et al., 1996). The network organization of area-based partnerships known as
PLANET (Partnerships for Local Action Network) has also been a prominent promoter of the
Social economy which they see as an important means of resourcing local communities and
ensuring local control and benefit from local resources (PLANET, 1997).
13
The Social economy Unit in Tallaght in south Dublin is exceptional in being the only
dedicated body set up specifically to provide support and advice to new Social economy
initiatives. The context and circumstances of its establishment reflect the link between local
development recent promotion of the Social economy in Ireland by those involved.
In considering the question of which form of public support is most appropriate for the Social
economy, the Social economy Working Group concluded that « it would not make sense for a
Government Department directly to operate a Social economy programme or to operate an
advice or practical support basis for Social economy type enterprise » (1998: 54). Instead the
Group recommended that a Social economy support unit be established in FAS (the National
Training Authority) and that such a unit be assigned responsibility for providing technical
support for the development of the Social economy at national level. This should be
supplemented at local level by a strategy for the development of the Social economy which
would operate on the basis of a Social economy Framework Agreement. The Group
recommended that technical support to social enterprises should be delivered locally through
FAS in partnership with relevant local interests and all of these activities should be subject to
ongoing monitoring (Social economy Working Group, 1998).
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IV
PUBLIC POLICY SUPPORT MEASURES FOR THIRD SYSTEM /
SOCIAL ECONOMY ORGANIZATIONS
Nine public policy support measures were identified for the Inventory and these represent the
policy measures which provide the most direct support to Social economy organizations.
However, none of these measures have support for the sector as an explicit or primary
objective. They are either labour market integration programmes such as Community
Employment, Job Initiative or Employment Initiative, or are programmes aimed at
encouraging community or local development such as the Local Development Programme,
Community Enterprise, or equal opportunities such as the Equal Opportunities Childcare
Programme. Social economy projects often access funding from several different programmes
simultaneously.
By far the most significant source of support for the Social economy is from the Community
Employment (CE) programme which operates as a form of labour subsidy to the sector. CE is
the largest and most important direct labour market intervention measure in operation in
Ireland accounting for around 40 000 persons who comprise around 3% of the labour force.
In 1997, 81% of participants were working on projects in voluntary/community bodies and
CE workers are the main source of labour for many Social economy organizations. Other
employment integration programmes included in the Inventory, such as the Employment
Initiative, also have a high involvement from the community/voluntary sector.
The other main group of support measures which provide support to the Social economy are
those concerned with local and community development, particularly programmes to counter
disadvantage and social exclusion. Indeed, the Social economy Working Group pointed out
that the latter programmes as well as labour market intervention measures have proven to be
more adaptable to Social economy type projects than programmes designed to support the
development of micro-enterprises which have mainly benefited individual private promoters.
The Group also referred to the fact that such programmes benefit substantially from EU
Structural Funds due to the priority given to combating social exclusion and to local
development in the 1994-1999 Community Support Framework and the involvement of
NGOs in the implementation of EU co-funded projects. Clearly this raises the issue of the
long-term viability of such projects. Besides, many of the projects are funded for a pilot
period of around two years, raising the problem for social enterprise of sourcing continuing
support after the pilot period is over.
Support for the « new » Social economy would probably be more effective if a specific set of
dedicated measures were put in place to support social enterprises. The existing set of indirect
measures, although they do recognize and promote the development of Social economy
organizations may be more effective if more directly and explicitly targeted to the sector. The
potential advantages of a Social economy programme include the provision of new services to
communities, particularly in disadvantaged areas, improved job opportunities for the longterm unemployed and other socially excluded people and the introduction of an
entrepreneurial dimension to local service provision (Social economy Working Group, 1998).
V
15
GENERAL CONCLUSION
In Ireland we have, as yet, no reliable quantitative assessment of the significance of the Third
sector for employment. The sector does not have a distinct identity in policy and public
discourse or in labour or sectoral statistics. Knowledge is therefore scanty, piecemeal and
mainly qualitative. The concept of the « Social economy » has recently become part of policy
discourse primarily in the context of the search for effective responses to social exclusion,
particularly long-term unemployment. The most dynamic aspect of the new Social economy
is associated with local and community development.
State policy measures have been quite effective in supporting social enterprises, mainly in the
form of labour subsidies via various labour market integration programmes. In practice this
has meant that most recently established social enterprises are heavily dependent on state
funding. It also means that recent development of the Social economy has been a by-product
of labour market and local and community development policies. The emphasis in these
policies has been either on the individual who is unemployed, or on a disadvantaged local
area or community. In examining the case for state support for the Social economy, in the
light of Ireland’s recent exceptional growth and forecast of continued growth over the next
few years, the Social economy Working Group concluded that « there is a clear case for
developing the Social economy in the context of combating disadvantage and with the aim of
regenerating communities » (1998, p. 52). It is worth highlighting the key points of the
Group’s recommendations here since they represent a consensus of views of senior policymakers, business, trade unions, farmers, relevant NGOs as well as other agencies such as
ADM who were represented on it.
In brief, the Group recommended:
• that developing the Social economy should be a specific policy objective;
• the introduction of a dedicated Social economy programme to be funded mainly from
existing resources at around EUR 52 million per annum. Funding would come from
adaptation of the existing Community Employment programme (around 5 000 job places)
to provide a dedicated support strand to the Social economy. The existing Community
Enterprise programme would also be refocused more explicitly on the Social economy and
additional resources would be provided to help social enterprises to develop and
implement business plans;
• that the provision of employment opportunities, experience and training will continue to be
seen as key objectives of the Social economy programme;
• that technical support to social enterprises should be provided at national and local levels;
• that local government and other local development structures should provide more
strategic support for the Social economy.
Given the extent of the sector’s reliance on state support to date, future development of the
« new » Social economy will significantly depend on a positive policy response to these
recommendations. It is notable that the Working Group did not address the issue of state
contracts to the Social economy, even though, as in other European countries, this is a likely
future trend. This is, in itself, an indication of the degree to which discourse and policy
regarding the sector is still in a formative stage.
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VI
BIBLIOGRAPHY
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Commission of the European Communities, 1994, European Social Policy: A Way Forward
for the Union, Brussels.
Commission of the European Communities, 1995, Local Development and Employment
Initiatives, Brussels.
Community Workers Co-operative, 1998, Strategies to Develop the Social economy, Strategy
Guide No. 2,Galway, Community Workers Co-operative.
Department of Social Welfare, 1997, Supporting Voluntary Activity, Dublin, Stationary
Office.
MALLAGHAN A., HART M., MACFARLANE R. and Connolly, E., 1996, A Study of
Community Business within the Social economy in Ireland, Report of a Study for Area
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National Economic and Social Forum, 1995, Jobs Potential of the Services Sector, Dublin:
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SALAMON L.M. and ANHEIER H.K. and Associates, 1998, The Emerging Sector Revisited,
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WALSH J., CRAIG, S. and McCAFFERTY D.,1998, Local Partnerships for Social
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