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Social Enterprises need to be better utilised by local authorities to maximise their impact for the people and communities they serve

01 December 2022
  • Our report focuses on helping councils make the most of Social Enterprises and harness their potential

    Social Enterprises sit between the public and private sectors. They can benefit disadvantaged communities; create wealth where money is scarce; and help to tackle poverty and meet need.

    Social Enterprises take many forms including partnerships for-profit or non-profit, co-operatives, mutual organisations, social businesses, community interest company’s and charities. Social Enterprises can therefore work in every sector of the Welsh economy and in all parts of the country and are increasingly prominent in Welsh Parliament legislation.

    Our report considers the strategic approach of local authorities to working with Social Enterprises.  We look at the mechanisms local authorities have in place to ensure value for money of Social Enterprises and how they are being utilised across Wales.

    We found that because Social Enterprises focus on keeping wealth within communities, they can assist people who are in poverty. While there are good examples of how some local authorities effectively collaborate with Social Enterprises, most authorities are not effectively promoting opportunities to widen the role of Social Enterprises to maximise their impact. A mixture of poor leadership and inadequate engagement and knowledge of the Social Enterprise sector by local authorities means that their potential is not being realised. While most local authorities provide grants for businesses and the third sector, they are not using them to specifically support Social Enterprises. In particular, local authorities need to do more to deliver their statutory social care responsibilities to social enterprises and effectively promote and develop the sector to deliver more services in communities.

    We did however find that some local authorities were promoting opportunities. The best local authority websites we found had a clear definition of what a Social Enterprise is. They had links to a wide variety of organisations to access further and more detailed information, particularly on legal issues, such as Social Business Wales, CWMPAS, Social Enterprise UK or the WCVA. They also provided contact details and information on local support programmes and grants administered by the local authority.

    Local authorities need to ensure they have the right arrangements and systems in place to get the best from their work with and funding of Social Enterprises. Given this we have focused our recommendations on supporting local authorities to take stock of current work and chart a new relationship with the Social Enterprise sector. We have created an evaluation tool to support officers and elected members to identify and agree how best to work with Social Enterprises going forward.

    Social Enterprises play an important role in meeting needs and helping people in communities across Wales. Local authorities could do more to maximise the impact of Social Enterprises, get better value for money from their work, and improve services for people and communities. Adrian Crompton, Auditor General

    Related Report

    ‘A missed opportunity’ – Social Enterprises

    View more