improving social inclusion at the local economy level ... · services persists (impact on social...

Improving Social

Inclusion at the Local

Economy Level through

the Social Economy

Report for Slovenia

Antonella Noya

Senior Policy Analyst OECD /LEED

Overview

• Mission and Methodology

• Context and Evolution of the Social Economy

• Contribution of the Social Economy to Social Cohesion

• Current Policy Environment and Supporting Strategies for the Social Economy

• Key Issues and Policy Requirements to Support the Social Economy

• Recommendations

Mission and Methodology

Mission

• Examine the role, real and potential, of the social economy in Slovenia

• Examine the support required for the social economy in Slovenia to realise its potential

Methodology

• Study visit by OECD LEED Secretariat members and external experts in Jan 2010 and Apr 2010

• Available statistics and research conducted prior to and after study visit

Slovenian Context: Evolution of the

Social Economy #1

Broad Context

• Economic and political transition

• Dominant state role in provision of public goods and services persists (impact on social economy development)

• High level of social and employment security but with some gaps in provision

• State of welfare dependency, growing social exclusion and labour market divisions (reforms undertaken to tackle these issues)

• Despite anti-crisis measures, employment and economic activity have declined sharply during the economic crisis

Slovenian Context: Evolution of the

Social Economy # 2

History

• Rich tradition of civil society organisations dating back to 13th century

• First law on cooperatives introduced in 1873

• By WW1 extensive network of associations, co-operatives, charities, and trade unions throughout Slovenia

• End of WW2 introduction of communist socialism broke tradition of strong social economy

• For 50 years, socialist welfare system largely replaced functions of the social economy

Slovenian Context: Evolution of the

Social Economy # 3

Current Landscape

• 22,000 civil society organisations

• 1.02 civil society organisations per 1000 inhabitants – one of the highest in the world

Organisations Detail

Inherited Co-operatives 437 organisations (2008)

Companies for the Disabled

168 organisations, 13,704 employees (2008)

Recently established

Zavods (Institutes) Largest number of employees and most entrepreneurial approach

Associations 94% of all civil society organisations, 1 million members

Other non-profit organisations

e.g. Foundations, church organisations, e.t.c.

Slovenian Context: Evolution of the

Social Economy # 4

However…

• Contribution of social economy to GDP is x4 below the EU average

• Contribution of social economy to employment creation is even less significant

Why?

• Concept of “Social Economy” not widely accepted in Slovenia

• Social economy initiatives lack visibility, are fragmented and sometimes over-looked

• Lack of understanding of their role and potential, but increasing political interest and will…

Contribution of the Social Economy to

Social Cohesion # 1

Current Contribution

• Mixed in composition and impact but examples of good practice

• Typical roles include service provision, work force integration, advocacy and self-help groups

Social Exclusion Themes Addressed

• Disability

• Disadvantage

• Urban socio-economic decline

• Rural socio-economic decline

• Community cohesion

Contribution of the Social Economy to

Social Cohesion# 2

Social Exclusion Theme

Role(s) of Social Economy Constraints / Opportunities

Disability • Provision of system of work integration

• Well developed funded but relatively closed system

Disadvantage • Develop relationships with SWCs and tenders via public works programme

• Lacks coherent and consistent policy framework

• Delivery of projects financed by temporary funding streams

• Social enterprises have funding access but may have cash flow or financial sustainability issues

Community cohesion

• Integration through sport and cultural initiatives

• Municipal youth culture and sports centres are quasi forms of social enterprise

• Advocacy with government policy-makers about public interests

• Enhanced role for social enterprises

Contribution of the Social Economy to

Social Cohesion # 3 Social Exclusion Theme

Role(s) of Social Economy Constraints / Opportunities

Urban socio-economic decline

• Provision of services to support local economic regeneration strategies

• Effective esp with environmental services, small Work Funds, business incubators and employment centres

• Restricted revenue and diverse set of small municipalities

• Reconstructing failed capitalist businesses

Rural socio-economic decline

• Service provision to reduce under-employment and stimulate regeneration

• Employment generation through effective training. Products sold to increase sustainability

Social exclusion

• Service provision • State major provider, few elements of mixed economy, no consistent capacity to develop service provision

Current Policy Environment # 1

Labour market policy

• Employment Service (ESS) e.g. Local and regional offices

deliver counselling, training and support

• Social protection benefit system e.g. Unemployment

insurance benefit

• Simplification of the business registration process

• Liberalisation of fixed-term contracts to support temporary working

• Growing emphasis on active labour market programmes e.g. “Public Works”

Current Policy Environment # 2

Labour market policy

• Minimum wage increase e.g. From EUR 597.43 to EUR

734.15 per month in 2010

• System of tax allowance for students in particular jobs

• Youth worker reintegration e.g. Second Chance Education

Programme

• Disability support e.g. Vocational, Rehabilitation and

Employment of Disabled Persons Act and associated fund

• Employment Centres

Current Policy Environment # 3

Welfare service policies

• Social Work Centres e.g. Administer welfare benefits

• Elderly and Disability support e.g. Homecare and Personal

Services Programme, EUR 8.4 million (2010)

• Child and family benefits well designed

• New Legislation e.g. Draft law on Long-Term Care and

Long-Term Care Insurance ( possible market for SE)

• Voucher system e.g. Voucher system for home care under

development

Current Policy Environment # 4

Social inclusion policies

• Ministry of Labour, Family and Social Affairs support e.g.

Co-finances social protection programmes for vulnerable groups often delivered by social economy organisations

• Specific Directorate of Social Affairs support e.g. National

Action Plan for Social Protection and Social Inclusion

• The Government office for Development and European Affairs plays a key role in development policy

• Need of policy coordination among Ministries

Current Supporting Strategies and

Policy Environment # 1

Supporting strategy

Constraints / Opportunities

Examples

Umbrella bodies

• Some established channels for representation

• Generally underdeveloped and lack recognition

• Lack of networking among the social economy “families”

• Chamber of Commerce, Co-operative Union, Trade Unions, Council for the Disabled

Fiscal and Financial

• Special funds and finance initiatives underdeveloped

• Lack of tax breaks • Strict fiscal rules limit

philanthropic activity • Some promising new activities

• Companies for disabled can make profit but must reinvest 60%

• National Lottery Funding • New gift-aid system (0.5% for

contributions) • Established culture of fundraising

Current Supporting Strategies and

Policy Environment # 2 Supporting strategy

Constraints / Opportunities

Examples

Business support

• Orientated to medium and larger rather than small business

• Focus on conventional not social entrepreneurship

• Potential to refocus traditional mechanisms to social economy

• JAPTI agency – one-stop shop for conventional entrepreneurs

Legislative frameworks

• Not major issues with legal structures

• Possible developments

• Co-operatives, associations, etc

• Law on soc entrship

Volunteering • Underdeveloped, but law now prepared for approval

• 7,000 volunteers per year as a result of public tender system

Capacity building

• Significant issue in Slovenia • Strong potential to transfer

international experience

• EUR 2 million project for social enterprise work integration activities

Key Issues and Policy Requirements

Opportunity

• New interest and political will could reinvigorate the social economy

• Potential to deliver public services more efficiently in light on budget constraints and rising costs

• Examples of excellent practice on which to build

Imperative

• the social economy:

– and its value-added are not well-understood

– sometimes has a negative image due to its socialist past

– and its drivers are not well focussed and coherently supported

• Requires reform, development and co-ordination of existing structures as well as capacity building and leadership

Recommendations # 1

Broad Recommendations

• Ensure legal and fiscal frameworks are not over-complicated or burdensome

• Better recognise and measure the costs of activities undertaken by social enterprises and the positive externalities they generate

• Ensure the institutional framework provides access to markets, particularly public procurement markets

• Draft legislation specific to social enterprises

• Implement a set of entrepreneurial policies consistent with distinctive features of social enterprise

Recommendations # 2

Broad Recommendations

• Develop a strategy to support the social economy sector in similar ways to the SME sector

• Allow the social economy to create its own representative structure

• Develop a system of partnerships and co-governance to support the design and delivery of policies

• Consider the introduction of a temporary quota for social economy organisations in the tender system

Recommendations # 3

Co-operatives

• Deliver modernisation measures to build capacity, assist in independence and strengthen trust

• Develop programme to promote new work integration co-operatives and user-based welfare services

• Improve information about and access to tenders and support structures

Not-for-profit organisations

• Address lack of seed capital and cash flow support

• Develop a programme to support NGOs to become social enterprises and encourage NGO and non-profit mergers

• Support the development of an asset transfer system

Recommendations # 4

• Support the development of philanthropic foundations, such as with US-type tax breaks, etc., with an appropriate regulatory system;

• Develop programmes for strengthening volunteer involvement, and facilitate this as a transitional arrangement for work integration, ensuring that such activities are compatible with the benefits system.

• Equalise the status of public and private institutes (zavods) in procurement systems such as tenders.

Recommendations # 5

Social enterprises

• Improve sustainability within the tender regime

• Ensure that any proposed law is well-communicated and “owned” by the social economy

• Use EU funding to develop a social enterprise strategy

• Develop a supporting environment through seed money, incubators, loan funds and new networks

• Develop a new WISE strategy for transitional employment

• Promote the development and adoption of measurement systems to show the added value of social enterprises (such as “Social Return on Investment” – or simpler tools

Recommendations # 6

Business partnership, CSR and other bodies

• New incentives for philanthropy and CSR

Policy Process

• Pursue processes of co-governance and co-construction

• Thanks!

• antonella.noya@oecd.org

• www.oecd.org/cfe/leed