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Improving Social Inclusion at the Local Economy Level through the Social Economy Report for 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 • Overview • Mission and Methodology • Context and Evolution of the Social Economy • Contribution of the Social Economy to Social Exclusion • 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 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 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 Slovenian Context: Evolution of the Social Economy # 2 History • Rich tradition of civil society organisations dating back to 13 th century • First law on cooperatives introduced in 1873 • By WW 1 extensive network of associations, co-operatives, charities, and trade unions throughout Slovenia • End of WW 2 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 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 Recently established Co-operatives 437 organisations (2008) Companies for the Disabled Inherited Detail 168 organisations, 13, 704 employees (2008) 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 Slovenian Context: Evolution of the Social Economy # 4 However… • Contribution of social economy to GDP is x 4 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 Exclusion # 1 Current Contribution • Mixed Contribution of the Social Economy to Social Exclusion # 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 Exclusion # 2 Social Exclusion Role(s) of Contribution of the Social Economy to Social Exclusion # 2 Social Exclusion Role(s) of Social Economy Theme 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 • 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 Community cohesion

Contribution of the Social Economy to Social Exclusion # 3 Social Exclusion Theme Role(s) Contribution of the Social Economy to Social Exclusion # 3 Social Exclusion Theme Role(s) of Social Economy Urban socio- • Provision of services to support local economic regeneration strategies decline • Reconstructing failed capitalist businesses Constraints / Opportunities • Effective esp with environmental services, small Work Funds, business incubators and employment centres • Restricted revenue and diverse set of small municipalities Rural socioeconomic 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. 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. 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. 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 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 Constraints / Opportunities strategy Examples Current Supporting Strategies and Policy Environment # 1 Supporting Constraints / Opportunities strategy Examples Umbrella bodies • Some established channels for • Chamber of Commerce, Corepresentation operative Union, Trade Unions, • Generally underdeveloped and Council for the Disabled lack recognition • Lack of networking among the social economy “families” 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 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 Capacity building • Significant issue in Slovenia • Strong potential to transfer international experience • 7, 000 volunteers per year as a result of public tender system • EUR 2 million project for social enterprise work integration activities

Key Issues and Policy Requirements Opportunity • New interest and political will could reinvigorate 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 overcomplicated Recommendations # 1 Broad Recommendations • Ensure legal and fiscal frameworks are not overcomplicated 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 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 Recommendations # 3 Co-operatives • Deliver modernisation measures to build capacity, assist in independence and strengthen trust • Develop programme to promote new work integration cooperatives 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 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 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 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 • Thanks! • antonella. [email protected] org • www. oecd. org/cfe/leed