FAQ: Why was the definition of a Social Firm broadened to the 'severely disadvantaged' in 2006?

The following text explains why Social Firms UK expanded the definition of Social Firms in December 2006 from ‘creating employment for disabled people’ to ‘people severely disadvantaged in the labour market’.

The Historical Context

In fact, when Social Firms UK was set up as an organisation in 1999, the original definition did encompass people disadvantaged in the labour market as well as people with disabilities (ref. CEFEC definition that ours was originally based upon at www.socialfirmseurope.org). However, when Social Firms UK set up we were also not aware of the other types of social enterprise that existed in the UK e.g. development trusts, community businesses, credit unions etc. Pretty soon, as interest in the social enterprise sector started to grow, we became conscious of potentially overlapping with other types of social enterprise when the target group for Social Firm employment creation was expressed so broadly, for example we felt that community businesses were set up potentially to create jobs for people in long term unemployment. At the same time, services for people with mental health problems and learning disabilities were going through significant changes in the UK and Social Firms were being considered as a serious option by many service providers as a result. In acknowledgement that people with mental health problems and learning disabilities were furthest away from the labour market, therefore, and combined with a desire not to tread on others’ toes within the broader social enterprise sector, Social Firms UK restricted its definition for Social Firms to just creation of jobs for ‘disabled people’ from the end of the 1990’s.

Modern Day Changing Needs

Towards the middle of 2006, however, as our mapping of the sector became more sophisticated and we were able to identify the organisations developing Social Firms, Social Firms UK began to recognise that businesses were being set up to create jobs for people far away from the labour market, but who were not being categorised by their service providers as disabled people. And, furthermore, there was no particular type of social enterprise that these businesses were able to identify with; certainly the initial anxieties that Social Firms UK had had about stepping on others toes would probably not have become an issue after all because there was no other umbrella body stepping in to help these businesses to develop. The common denominator amongst most groups furthest away from the labour market is actually mental health. Just because a service provider developing a business categorised its target group as ‘homeless’ for example did not mean that those individuals do not have a disability; it is simply that ‘disability’ is not their primary disadvantage. In fact, it’s been estimated that 80% of ex-offenders have mental health problems, and the other disadvantages also often go hand in hand e.g. homelessness and drug or alcohol addition. So, rather than be pedantic about terminology and choose not to include or support these enterprises as Social Firms, Social Firms UK took advice from its board, its membership, its funders and follow agencies within the social enterprise sector as to whether it made sense to broaden the definition of Social Firms to be ‘employment for people severely disadvantaged in the open labour market’. The outcome of this consultation was that people favoured the wider definition, and hence we changed the definition of Social Firms in December 2006.

Why ‘severely’ disadvantaged?

We opted to include the word ‘severely’ before ‘disadvantaged’ because Social Firms remain a model that is set up to create employment for those furthest away from the labour market and we needed a way to reflect this still in the definition. When we researched the European Social Fund (ESF) definition of ‘disadvantage’ for example, we found that it includes a whole range that we wouldn’t consider relevant for Social Firms, e.g. women in an area where there are more jobs for men than women. Without wanting to list examples of what we mean by ‘severely disadvantaged’, we needed to convey the fact that Social Firms wouldn’t be started unless there was a real need to create jobs for people who otherwise wouldn’t get them because of their particular disadvantage, and that is why we use the word ‘severely’. We are also not prescriptive about what is viewed as a ‘severe disadvantage’, but the more common disadvantages where individuals face one or more barriers to the labour market are, for instance, homelessness, being an ex-offender, being a drug or alcohol addict, having a mental health problem and having another kind of disability. The focus of the disadvantage is the individual, rather than the geographic area in which they live, i.e. it does not matter where they live they would still face the same barriers to employment. We believe that listing the types of severe disadvantage we mean within, or as a footnote to, the definition, would be too over-prescriptive and potentially limiting to how the employment model can be used in the future to tackle worklessness.

This is a bit of the background to why and how the definition got broadened to ‘severe disadvantage’ at the end of 2006. To date we have discovered organisations creating Social Firms for homeless people, addicts and ex-offenders as well as the majority who are focusing on disability and mental health. We welcome the opportunity to work across a broader range of interest with the ultimate common aim of creating employment for people who otherwise would have significant difficulties in getting and/or retaining a job in the open labour market. If you are such an organisation and haven’t yet made contact with us about the potential that Social Firms might hold for your target group, then please – we’d be delighted to hear from you.