The impact of social policy on social enterprise failure

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A decade on from the 2008 crisis, austerity is changing the way public services are being delivered in rural areas in Scotland. As in the rest of the UK, there has been a marked shift in the delivery of some social welfare services to the third sector, and particularly to social enterprise (Sepulveda, 2015). The Scottish Government’s Social Enterprise Strategy 2016-2026 (Scottish Government, 2016) supports and encourages the growth of the social enterprise sector in Scotland. The rural social enterprise sector is proportionally much larger than in urban areas, with 34% of all Scottish enterprises located in rural areas despite just 18% of Scotland’s population living there (Social Value Lab, 2017). This paper presents evidence of social policies’ role in rural social enterprise failure which emerged during an investigation of the antecedents of social enterprise failure. This paper demonstrates how conflicting policy agendas have impacted local service provision through an in-depth analysis of the failure of a rural social enterprise that offered training and employment support to vulnerable and marginalised people across rural western Scotland. The findings are supplemented by emergent data from guided conversations with CEOs and managers of five other failed rural Scottish social enterprise initiatives. Analysis of this combined date suggests that wider Scottish and UK social policy can impact negatively upon social enterprise and contribute to such organisations’ failure. While some of these policies empower communities and rural organisations to take ownership of their economic development, others were found to be counterproductive and in fact undermine this same process.This paper concludes that a disconnect exists between national social policies and regional approaches to policy implementation which can constrain local regional economic development, and that this disconnect is encapsulated within the antecedents of social enterprise failure. ReferencesScottish Government (2016) Scotland’s Social Enterprise Strategy 2016-2026. Accessed 24 January 2018. Value Lab (2017) Social enterprise in Scotland. Accessed 24 January 2018., L. (2015) Social enterprise – A new phenomenon in the field of economic and social welfare? Social policy & Administration,49(7), pp.842-861
Original languageEnglish
Publication statusPublished - 12 Jul 2018


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