Environment and Planning C: Government and Policy 2015, volume 33, pages 1585 – 1599

doi: 10.1177/0263774X15614151

Adaptive utilitarianism, social enterprises and urban

regeneration

Brendan Murtagh and Kathryn McFerran

SPACE, Queen’s University Belfast, David Keir Building, 39 Stranmillis Road, Belfast,
BT9 5AG, UK; e-mail: b.murtagh@qub.ac.uk

Abstract: Social enterprises have been placed at the centre of Big Society politics and an
emphasis on the local as a site for experimentation and service delivery. Nationally, this has
been supported by legislation in community transfer and procurement, social finance and
new intermediaries to strengthen skills and loan readiness. This paper examines the role of
social enterprises involved in urban development in Northern Ireland and highlights the
multiple ethics, legitimation strategies and modalities that are necessary for sustainable
forms of progressive regeneration. The paper concludes by stressing the possibilities of
a more independent and reformist social economy and how this offers some practical
alternatives to the enthusiasm for neoliberal policies in the local state.

Keywords: social enterprise, regeneration, localism, utilitarianism, social finance,

neoliberalism

Introduction
The Big Society and a shift to new localism place increasing emphasis on social enterprises to
deliver a range of services and programmes previously associated with the state and especially
local government. For critics, this is a form of ‘austerity localism’ in which a new round of
roll-back neoliberalism is enabled by public sector cuts, dismantling state institutions and
the privatisation of health services (Mackinnon and Driscoll-Derickson, 2012). Concepts
such as resilience, vulnerability and adaptation are designed to push social risks down
to the community and to make them responsible for sorting out their own economic and
environmental crises (Sullivan, 2012). In this context, social enterprises both facilitate the
transfer of services out from the state and provide vaguely defined communities with the
assets to increasingly manage their own welfare. For Amin et al. (2002), the marketisation of
the social economy corrupts its ethical base, stunts its growth and residualises its functions
to social repair and public (not private) service displacement. Featherstone et al. (2012) also
emphasise the capacity of neoliberalism to incorporate apparently reformist movements in
its own interests but social economics is also pre-paradigmatic; there to be negotiated and
shaped in different ways. Certainly, the narrow focus of the Big Society version of localism
stresses entrepreneurship, service competition and profitable social enterprises working in
a mixed economy of providers to offer the best (or more appropriately low cost) service
(Hildreth, 2011: 712). However, social economics can also offer alternative political
and social arenas for communities, in even the poorest places to mobilise and exercise
some control over the resources that affect their lives (Billis, 2010a). NEF (2008) showed
that social enterprises can: deliver services that respond to locally defined, not state
contrived, needs; provide jobs and careers; resist market exploitation; recycle circuits of
money and prevent financial leakage; and build social solidarity locally, across places and
even globally.
This paper looks at the experiences of social enterprises involved in urban regeneration
in Northern Ireland where a neoliberal fix is now offered by the Democratic Unionist Party
(DUP) and Sinn Fein largely rooted in working class Unionist and Nationalist communities,
1586 B Murtagh, K McFerran

respectively (Murtagh and Shirlow, 2012). The Northern Ireland Assembly recently announced
significant cuts in welfare, dismantled the regional and highly effective social housing agency,
pushed for reduced Corporation Tax and for legislation to give greater weight to economic
considerations in land use planning. Yet, there has been little progress on social finance, social
clauses in public procurement or new legislation on community asset transfer. For critics,
such developments, in any case, merely condition the social economy to take on greater
responsibility for welfare and is simply part of the roll-out of neoliberalism across the global
North (Harvey, 2012). The paper argues that social enterprises are inevitably implicated in
compromises about their market and ethical purposes, their viability and capacity to deliver
social value, and between their need to seek legitimacy from both those with resources and
the people they aim to serve. There is no single pure form of resistance, only the messy
trade-offs that create and use surplus in socially useful and redistributive ways. The paper is
based on survey and case study data to show how adaptive utilitarian strategies help to steer
social enterprises through various legitimation crises in an attempt to pursue progressive
regeneration practices. It concludes by highlighting the need to look beyond the superficial
performance of social enterprises to see recognise the tactics, modalities and trade-offs
necessary in any meaningful resistance to state and sectarian hegemonies.

The social economy and urban regeneration

Peck and Tickell (2002) map out the spatial characteristics of neoliberalism in a preference
for market solutions, property speculation, de-risking private capital and displacing state-
led local regeneration models. Social housing agencies and planning policies that disrupt
accumulation need to be bypassed, marginalised or removed altogether. Urban Development
Corporations grant incentives that respond to ‘market failure’ and deregulation (of credit,
planning controls and design standards) were part of the early roll-back phase. More recently,
quarterisation, stimulating creativity and inter-local competition based on concepts of small
firm competiveness, marks its reformation in the 1990s and early 2000s (Pike et al., 2007). Its
softer mutation under, Blair and Clinton, demonstrated a concern for community cohesion,
social exclusion and new forms of partnership governance that allow communities to take
greater control over their development but also enabled the state to make them responsible
for more intensive forms of social polarisation and poverty. Peck and Theodore (2012) see
these reformations as a makeover or necessary adjustment to ease the path of neoliberalism
in locally contingent ways.
This path dependency is reflected in actually existing forms that respond to regional
institutional, social and cultural contexts but the basic framework is intact and this is best
demonstrated in the latest financial crisis in which neoliberalism has reasserted itself in more
aggressive ways (Peck, 2011). An important feature of this phase has been to relocalise policy
and involve citizens and communities in their own risk management (Mackinnon and Driscoll-
Derickson, 2012: 257). Here, the local is socially constructed to enable simplified, homogenised
and competent communities to deliver a whole range of services, manage state-owned facilities
and even operate their own economies (Bailey and Pill, 2011). For Featherstone et al. (2012: 117)
this is a form of ‘austerity localism’ characterised by attacks on public institutions, collective
entitlements and naturalising economic crises as inevitable but ultimately manageable. Social
enterprises are implicated in that management as both part of the infrastructure to facilitate
welfare reform and as a way of disciplining the third sector (NESTA, 2012).
However, for a number of writers on urban resistance, the local is a meaningful arena for
neighbourhood activism, community accumulation strategies and the creation of alternatives
to failing private and public markets. Featherstone et al. (2012: 177) for example, call for
‘progressive localism’ characterised by specific struggles over gentrification or factory
closures, the development of political links between place-based resistance and the creation
Adaptive utilitarianism, social enteprises and urban regeneration 1587

of ‘new inter-local spaces of engagement’. This progressive localism specifically relates to

the flow of resources within and between communities and how the local can exercise some
control over exploitative private or vulnerable public markets. Political economists see such
strategies as inevitably captive and ultimately facilitate the very processes they purport to
resist. And, some do, but some do not and can use assets money, profits and market metrics in
more explicitly inclusive ways (Ferguson, 2011). Billis (2010b: 251) dismisses the ‘Faustian
pact in which the (social enterprise) sector losses its distinctive characteristics in return for
private and public resources’ but also highlights the need to critically evaluate decisions around
trading. This includes: rethinking organisational roots and where legitimacy comes from, who
are the owners and do they all share the same vision or are we likely to see a dilution of social
purpose and how does the enterprise respond to opportunities or react to crises.
In this respect, the definitional scope of the social economy is important. Most writers on
the sector agree on some broad characteristics in the concern for trading goods and services
for a social purpose, democratic modes of governance, community ownership and control and
clearly defined ethical objectives (Bridge et al., 2013). The scope is extensive as indicated by
Murray et al. (2010: 142):
““The social economy is a hybrid. It cuts across the four sub-economies: the market, the
state, the grant economy, and the households. Each of these sectors has its own logics
and rhythms, its own means of obtaining resources, its own structures of control and
allocation, and its own rules and customs for the distribution of its outputs. But the parts
of these economies which we term the social economy are united by their four goals, by
the importance given to ethics and their multiple threads of reciprocity. Their production
ranges from the micro scale of domestic care in the household to the universal services
of a national welfare state. Although analytically distinct from the private market, it
includes social enterprises engaging in the market, as well as some of the activities of
private companies that have primarily social goals.
This definition stresses a relational approach rather than seeing the social economy as an
essentialist, separate or self-contained category. The state, market, households and the
third sector are in a constant state of negotiation, making it hard to define but also easier to
select politically preferential versions of its role. Amin et al. (2002) identified international
differences between an Anglo-Saxon model with its emphasis on entrepreneurship and
enterprises and a close relation with market processes; and a European tradition which is
more likely to challenge the hegemony of the market and take a ‘whole society’ approach
instead of a business-focused one. Defourny and Nyssens (2012: 78) also highlight the
central features of this more politically conscious version of social economics by stressing
the range of activities, engaged local practices and reciprocation created by intra-community
exchanges. In particular, their features include:
●●A continuous activity producing goods and/or selling services;
●●A significant level of economic risk;
●●A minimum amount of paid work;
●●An explicit benefit to the community;
●●An initiative launched by a group of citizens or civil society organisations;
●●A limited profit distribution;
●●A high degree of autonomy;
●●A decision-making power not based on capital ownership; and
●●A participatory nature, which involves various parties affected by the activity.
Graefe (2002) was especially concerned with the political scope of the social economy and
how and in whose interests, it would be shaped by considering three development scenarios.
In the entrepreneurial model, the social economy focuses on businesses that can operate in
the spaces where the private sector cannot or will not, at least until pump priming make them
1588 B Murtagh, K McFerran

more attractive. In the socio-economic model it is there to patch up the welfare state and
provide services to the most difficult to reach neighbourhoods in more cost-efficient ways.
Finally, Graefe sees an ideological paradigm in which in which citizen ownership, local
control and solidarity provide the sector with a distinct critical edge. Nicholls (2012: 223)
argues that social economy in the UK is in a pre-paradigm stage, which contains opportunities
but also ‘a fluid institutional space for dominant actors to shape and exploit’. It is this ‘actually
existing’ characteristic which in part, explains which scenario emerges. Powerful enterprises
and a politically engaged sector, capable of generating more independent financial, social
and community control, have the capacity to resist incorporation and develop more socially
relevant economic responses to crises. So, whilst the dominant view of the Big Society sees
social enterprise as part of the enabling technologies of state reform, through fair trade, micro-
finance and cooperative factory takeovers ‘social enterprises can act to limit the effects of
globalisation and relocalise political and economic control’ (Ridley-Duff and Bull, 2011:
103).
The issue of local control has also strengthened interest in concepts of community
ownership and how to use more democratic forms of social finance to make enterprises
work. For example, the cooperative movement has supported Community Shares to enable
the public to directly invest in enterprises, properties and services that respond to locally
defined needs (Brown, 2011). This version of social finance is also reflected in a growth in
the number of Community Development Finance Institutions (CDFI) such as Tridos, Charity
Bank and the Cooperative Bank. These lend to social enterprises and charities on preferential
terms, competitive rates and support businesses with technical assistance as well as finance.
Henry and Craig (2013) showed that there were 74 CDFIs in the UK and the value of lending
had increased from £201m in 2006/7 to £246m in 2008/9.
However, the growth of social finance both enables social enterprises access to capital but
is also part of the assemblages necessary to render the sector as governable terrain. Thus, there
are alternatives and the pre-paradigmatic condition of the social economy, the contradictory and
crises laden nature of roll-out neoliberalism and its particular path dependency suggests that it
can be made and remade in different ways. Graefe’s (2002) three development scenarios are
conceptually and empirically useful in evaluating which future is likely and in identifying what
steering mechanisms can direct social enterprises in more progressive ways. This forms the basis
of the evaluation of the empirical data but also serves to highlight the complex and interdependent
relationship between all three in the actual practice of more radical forms of social economics.

The social economy nationally

Social Enterprise UK (SEUK, 2011) estimates that there are 62,000 social enterprises in the UK
and that they contribute £24bn Gross Value Added to the national economy. The median annual
turnover has increased from £175,000 in 2009 to £240,000 in 2011. Moreover, 29% of all social
enterprises are in the top 20% most deprived areas compared to 13% of standard business and
83% of their products are reinvested in the communities from which they are earned. SEUK
also show that social enterprises grow faster than SMEs, are more likely to launch a new service
or product and to employ more people than private businesses. As noted earlier, national policy
has grown considerably under the current government in terms of finance, technical support
and new legislation on asset transfer and procurement. Big Society Capital aims to strengthen
wholesale finance to CDFIs and the Social Investment Finance Team has prioritised Investment
Readiness skills especially to help enterprises access government contracts.
Scotland has an especially well-developed policy architecture for the social economy and
urban regeneration. The Enterprise Third Sector Action Plan sets out an integrated framework
to support the social economy, which includes opening up and protecting markets, most
recently through the Procurement Reform Bill 2013 that makes it easier for social enterprises
Adaptive utilitarianism, social enteprises and urban regeneration 1589

to compete for government contracts. It has also established grant programmes for start-up
companies, social entrepreneurs, high-growth enterprises as well as investment in research,
skills and technical support. This has enabled the creation of a dedicated £30m Social
Investment Fund with a mix of loans and grants, a £12m Enterprise Growth Fund aimed
at new starts and a £1m Social Enterprise Fund, which makes small (under £5000) awards
to individuals to explore new markets or business concepts. There is also extensive support
for intermediaries involved in training, investment readiness, community asset transfer and
social enterprise start-ups in the Highlands and Islands.
The first Welsh Social Enterprise Strategy was launched in 2005 and currently the Welsh
Assembly Government supports a range of intermediaries to support social firms, asset
transfer schemes and the expanding cooperative movement. More recently, social enterprises
have been strengthened to build market share in health, disability and older peoples care.
The Community Investment Fund administered by the Welsh Council for Voluntary Action
has provided £2.65m in loans and £353,000 in development grants to help social enterprises
become investment ready and compete for public procurement contracts.
These regional responses are characterised by an integrated approach that include high-
level political outcomes, preferential legislation and direct financial investment. Technical
support aims to make organisations more loan ready and better positioned to bid for
contracts. The supply of social finance has been extended to embrace mixed loan and grant
funding, growth and consolidation programmes, new intermediaries and large-scale financial
wholesalers. These do not necessarily mean, of course, that the architects desire a radical
social economy but in shaping the paradigm, the possibilities exist to exploit it, reform it or
incorporate it in conservative ways.

Social enterprises and community-based regeneration in Northern Ireland

This research is based on research part funded by the Office of the First and Deputy First
Minister in the Northern Ireland government and seeks to understand the dynamics, impacts
and contradictions of urban-based social enterprises in the region. It draws on three sources.
First, published data on the social enterprise sector is evaluated and shows that the sector
has not experienced the same levels of development as the rest of the UK. The second stage
therefore aims to look, via a quantitative survey, at the experiences of urban-based social
enterprises, especially to understand obstacles to growth, their priorities and how they access
support. This sets the context for three case studies that aim, in particular, to evaluate the
context of market processes and the contradiction in ethics and practice that are an inevitable,
even necessary part of their work.
Secondary data on the profile of the sector
The social economy in Northern Ireland is not new. Community economic development
has been at the heart of strategies in a range of (mainly Catholic) working class areas,
throughout the history of the Northern Ireland state (Molloy et al., 1999). The credit union
movement, community cooperatives, especially in rural areas and charitable businesses,
particularly supported by the Catholic church, have a long history but so too have social
firms in Protestant neighbourhoods characterised by deindustrialisation, such as east Belfast.
PricewaterhouseCoopers (PwC, 2013) published the results of its 2013 mapping exercise into
the profile of the social enterprise sector in Northern Ireland and updated a similar survey
conducted in 2007 (DETI, 2007). A number of databases were brought together and they
estimated that there were 3348 community and voluntary sector organisations and 473 social
enterprises (of which 153 social enterprises responded to the PwC survey).
The study showed that 32% of social enterprises had turnover of between £100,000 and
£499,999 but only 2% had more than £10m. It also revealed that 36% had a turnover of
1590 B Murtagh, K McFerran

less than £100,000. Table 1 shows that the turnover levels have not changed significantly,
so the proportion of smaller enterprises has grown by 3% and there is only a 1% increase
in the proportion of larger social businesses. A total of 68% of social enterprises reported
that they made a profit in 2010/11, compared to 54% of all community and voluntary sector
organisations. Nineteen per cent of social enterprises reported a profit of over £100,000,
while 27% recorded profits of less than £5,000. A total of 17% of social enterprises employ
16 or more employees but 48% employ less than six people.
Survey dat™a
Establishing reliable population data or sample frames for surveying the social economy has
been problematic, even for official surveys but the DETI (2007) survey estimated that there
were 240 community businesses operating at the neighbourhood level and using the Northern
Ireland Council for Voluntary Action data set, it was possible to flag their contact details yielding
a gross sample of 232 organisations. Of these, 21 (9%) were no longer in operation or had
incomplete records but a valid list of 211 organisations had e-mail addresses for the purposes of
sampling. The e-survey produced 81 full responses or one in 2.6 community businesses in the
region. The quantitative data have also been complemented by an analysis of three community-
based case study organisations to draw out wider lessons for policy and practice. Table 2 shows
that most social enterprises operating at a community level are small and receive less than 10%
of their income from trading; as only 12% have more than three-quarters from such sources. Joy
et al. (2011: 39) have been especially critical of the over-reliance on grants as social enterprises
inevitably build a dependence on the funder, lack the freedom to advocate and because it
reduces grant aid from organisations that really need support.
Table 3 shows that the most important barrier to development was access to capital to
grow the business (80%) but a significant proportion (48%) also experienced problems with
skills and learning opportunities, especially on the problems of social enterprise management.
One respondent pointed out that ‘the need for income through trading is essential for the
organisation to survive as it provides unrestricted funding that is needed for bank charges and
other sundries’. The need, not just for funding, but for free funds that allow the organisation to
Table 1. Turnover levels of social enterprises in Northern Ireland.
Turnover 2007 (%) 2013 (%)
Less than £100,000 33 36
£100,000–£499,000 40 32
£500,000–£999,000 14 19
£1,000,000 and over 12 13
Total 100 100
Source: Based on DETI (2007: 14) and (PWC, 2013: 45).

Table 2. Proportion of income from trading sources.

Range Percentage
Less than 10% 59%
10–25% 16%
26–50% 10%
51–75% 4%
76–90% 6%
More than 90% 6%
Total 100%
N 81
Adaptive utilitarianism, social enteprises and urban regeneration 1591

Table 3. Barriers to social enterprise development.

Barrier %
Getting advice to start up the project 40
Getting the right staff to develop and manage an enterprise 45
Getting access to finance to grow the project 80
Finding premises or facilities 14
Lack of information on the problems and pitfalls 48
Support from the public sector 63
Support from volunteers 23
Equipment or IT systems 23
Marketing 43
N 81

operate in more politically independent ways is at the heart of the type of social economy likely
to emerge in Northern Ireland. Specialist staff (45%) and advice around start-up (40%) and
marketing (43%) were also important barriers, although access to premises (14%), volunteers
(23%) and IT systems (23%) was not regarded as problems for most community businesses.
Sixty three per cent of respondents were critical of the lack of government support and
this covered financial, technical and programme development that would aid the sector and
individual enterprises in more meaningful ways. A number of respondents highlighted the
lack of tailored supports for social enterprises, the need for grants to incubate businesses and
for clearer objectives around the type of projects that should be prioritised:
““I think small organisations such as ours are hindered greatly by lack of support from the
statutory sector in terms of core funding. Although we are able to access funding what
we do could be done better and more cost effective if sectors would sit with us and help
us with strategic planning, offer core funding where our service would then be offered at
a much more affordable cost.
More importantly, the grants that were available from the EU are declining as the structural
funds are reallocated to the accession countries and the capital available is insufficient to
grow the sector to anything like a sustainable basis:
““There is no financial support currently available to establish social enterprises at local
disadvantaged community level. The sizable investments/grants available through the
(EU) PEACE Programme have now dried up, although the second round of funding was
more focused in Belfast on training rather than on setting up social enterprises.
The lack of support infrastructure is also highlighted in Table 4 which indicates where social
enterprises get support to form in order to start-up and develop their business. Most support
is internalised and within the organisational team (71%) but peer network (64%) as well as
specialist advice (58%) are also important. Statutory help is again weak (36%) but so too
is voluntary sector support (45%) and there is reliance on individual entrepreneurs (27%),
funding agency staff (36%) and friendly finance (24%) to enable growth.
For a number of respondents, confusion over the social economy itself and how it is
best supported is part of the problem. The barriers to growth include: a lack of financial
skills; competent staff, experienced board members and volunteers; and a struggle to find
appropriate support organisations. This is highlighted by two respondents to the survey:
““Our organisation has not been able to recruit adequate board members with business
skills which have inhibited business development.
““As a community organisation developing in the social economy, we aren’t aware of how
much we don’t know business-wise and how much of a jack of all trades staff need to be.
1592 B Murtagh, K McFerran

Table 4. Sources of support in social enterprise development.

Support %
An individual entrepreneur 27
Our organisations team and members 71
Networks and peer support 64
Specialist advice and support 58
Key individuals in funding organisations 36
The private sector 7
Friendly finance 24
Statutory agency 36
Voluntary sector support 45
Training organisations 24
N 81

These barriers are best understood in the experiences of individual community businesses
and three larger organisations operating in east Belfast are analysed in greater detail. This
part of the city has suffered from deindustrialisation and especially the loss of the shipyard;
depopulation linked to redevelopment and the inner-city roads programme; and violence,
particularly at the interface between the mainly Protestant lower Newtownards Road and
the mainly Catholic Short Strand enclave. Capital flight has enabled the former shipyard
to be transformed into a major waterfront Titanic Quarter centred on the predictable mix of
apartments, hotels, office space, a Science Park and a new Titanic Museum. Knowledge-
intensive jobs, public sector subsidies and an absence of social housing shape the project
with concerns already expressed about how it will connect to working class communities
in inner east Belfast (Murtagh, 2011). Three projects including faith-based, information
technology services and property regeneration reflect an alternative development paradigm
and demonstrate the capability of community businesses to respond to local needs and
challenges in the context of rapid economic and social restructuring.
Case 1: East Belfast Mission (EBM)
It was noted earlier that social economy and especially urban regeneration-based social
enterprises are characterised by a degree of polarity; a large number of smaller under-
capitalised organisations at one end; and a small number of large multi-service agencies at
the other. EBM indicates the scale effects of community businesses on regeneration, social
inclusion and maintaining a sustainable, less grant reliant sector. EBM was established in
1985 by the local Methodist Church and has now built up a portfolio of companies under the
re brand including:
●●eight re:store charity shops selling donated second hand furniture and household goods;
●●a Vintage shop with bridal department selling vintage and ‘high end’ donated goods;
●●re:fresh café on the Newtownards Road which also operates a meals on wheels service;
●●re:furb which is a furniture restoration project;
●●re:cycle which repairs and resells second-hand bikes; and
●●two re:beebies shops which refurbish and resell children’s furniture and equipment.
The 11 retail outlets generate a net income of £420,000 per annum and this contributes
to EBM’s annual unrestricted income of £1.13m. A further £1.56m is from grant aid and
charitable donations used for specific (and restricted) purposes including childcare and
support for older people. EBM currently has 60 trainees on placement across their social
enterprises and a team of 100 volunteers supporting 56 full-time and 10 part-time employees.
An additional 35 staff work in the new Skainos Centre opened in 2012, which is an integrated
facility containing business units, community meeting space, social housing and a homeless
Adaptive utilitarianism, social enteprises and urban regeneration 1593

hostel linked to a resettlement programme. Age Northern Ireland (AGENI), the Northern
Ireland Association for Mental Health and Belfast Metropolitan College deliver health
services, care for older people and education from the Centre. The programme manager is
aware of the implications of workfare and social care schemes for organisational ethics:
““These are important sources of income and they are valuable, someone needs to provide
these services and we do it better than others … we can use profits to do the things that
are really needed and that no one else will do.
Clearly enterprises see their services as a response to a form of public market failure rather
than a deliberative attempt to compete with current services but they also calculate, in
an imprecise way, the benefits of such programmes for organisational stability as well as
meeting local needs. EBM has now developed a new child care business (Bright Sparks)
which provides day care for 59 children at commercial rates.
The overall development cost of the Skainos Centre was £15.8 m, of which £1.4 m came
from EMB’s own reserves accumulated mainly through their trading companies. The grant
aid to build the centre reflects the availability of significant capital support from EU (PEACE)
and US (IFI) peace investment but also show the importance of central government (DSD)
funding for the project. The total investment was as follows:
●●SEUPB (EU) Peace III Programme, £6.1 m;
●●Department for Social Development, £5.4 m;
●●International Fund for Ireland, £2.9 m; and
●●nEBM, £1.4 m.
Williams et al. (2012e: 1481) argue that Faith Based Organisations are not on a predetermined
path but can ‘serve to subvert, resist and rework the performative assemblages of neoliberalism’.
They show, empirically, how FBOs have revised and modified government rationalities
because they have an autonomy and discretion informed by religiosity and ethical practice.
They can also prioritise their values and ideas, interpret polices in flexible and self-serving
ways and refuse obligations imposed on them by government. This is in, an albeit modest
way, what EBM attempt to do in its relations with the Catholic Short Strand community.
Here, they deliver cross-community programmes especially aimed at children, address the
criminalisation of young people involved in interface violence and develop joint service plans
around the needs of older people. EBM now operates its Meals On Wheels service in the
Short Strand and runs Irish Language classes which have been attended by people from both
communities. Women’s groups in the Newtownards Road and the Short Strand have also come
together to develop a range of programmes, especially around teenage pregnancy and support
for young mothers. Sepulveda et al. (2013) suggest that there has been an overemphasis
on race and social enterprises and that they are not necessarily overrepresented in ethnic
minority communities. Their role in expanding market share and profitability and potentially
addressing religious or racial segregation does require further analysis but it is clear, in the
case of EBM at least, that such service models have not developed in to more formal cross-
community (or political) alliances. Thus, Sepulveda et al. (2013) question whether the social
enterprise sector represents an essentialist process of radicalisation or resistance in ethnic
minority communities in London and the failure to mobilise politically, outside the Protestant
community in east Belfast, suggests similar limitations in Northern Ireland.
EBM plans to develop a new waste management facility on land it currently owns in east
Belfast. However, it requires significant start-up capital and has considered equity partners
and private investors as a source of funding. They see a sectoral opportunity in recycling paint
by-products but this requires specialist plant, beyond grant aid available from programmes in
community development and urban regeneration. In addition, EBM sees significant barriers
in waste management around local authority procurement as the Director commented that
‘at present tendering for contracts, for example with District Councils, takes no account of
1594 B Murtagh, K McFerran

the complex features of social economy companies’ nor the wider social and environmental
value chain in choosing one supplier over another.
Case 2: Avec Solutions
East Belfast Partnership (EBP) was established in 1997 as a community-led regeneration
charity with the aim of developing economic, social and environmental conditions in the
area. The Partnership identified financial ‘leakages’ from the community sector to the private
sector, especially in comparatively expensive areas such as rental space and IT services.
Moreover, they saw the development of profitable enterprises as a way of creating surpluses
to deliver social programmes, strengthen their sustainability and create jobs. The manager
explained that they wanted to avoid traditional sectors, such as community cafes and
identified higher growth markets, especially Information Technology in which to create new
companies.
ECOM Management was established in 1999 as not-for-profit social enterprise in order
to provide IT support, consultancy and training across sectors and it has also specialised in
web design and e-marketing. However, the organisation struggled to develop profitability
even though it was successful in growing both market share and turnover. EBP undertook
a significant restructuring that involved making staff redundant, more aggressive pursuit of
bad debt including legal proceedings against other charities and by setting a more realistic
approach to pricing. The organisation was rebranded as AVEC Solutions and attempted to
reduce their dependence on grants and be commercially viable in a competitive market place:
“Why should a funder give us capital to develop if those in the private sector are not getting
it? You are setting up one sector against another one … We should not view it as an obstacle”
(Director AVEC Solution).
Avec Solutions now has a turnover of approximately £350,000 and retains profits
of around £80,000 per annum. In 2009, Avec Solutions merged with a competitor social
enterprise, Computer Connections, to help grow the business and market sectors, especially
in hardware recycling. The company now employs six full-time and six associate engineers
offering IT support, web development, internet hosting and consultancy to nearly 200 clients
across Northern Ireland.
The Director argued that networks between social enterprises are important for peer
support as well as lobbying but that it is the cultures of public sector programme managers
that are most problematic. In particular, officials lack flexibility to support social enterprises,
grants often prohibit the retention of surpluses (and therefore reserves) and is too bound up
in bureaucratic procedures and excessive regulation:
““... there is little investing in people, and I don’t mean skills or training. You know the show
Dragons Den? Well those investors are not investing in the product but the entrepreneur;
they see potential in the product and the person. The funding does not allow for this …
We should be allowing people to identify good ideas and getting support to these people
not rewarding them for filling in a 42 page form correctly. (Director AVEC Solution)
Case 3: Landmark East
Landmark East was established in 1997 mainly in response to the physical dereliction of
the area including empty buildings, vacant sites and at the same time, the lack of suitably
priced accommodation for voluntary groups. The organisation has now developed an
extensive property portfolio that generates profits for reinvestment in new purchases and
refurbishments. Landmark East employs two full-time members of staff and owned assets
valued at £2m in late 2012. This includes two community hubs that offer rented space to
voluntary organisations, a shopping centre in a disadvantaged housing estate where there
were previously no retail services and a GP surgery on the Short Strand interface serving
both communities. The organisations’ most significant challenge is access to capital, punitive
Adaptive utilitarianism, social enteprises and urban regeneration 1595

interest rates and a poor loan-to-value ratio on existing property making it harder to refinance
against the existing portfolio.
““The banks are a bit of non-starter, it is not at all easy to get lending rates … the banking
situation has changed; there is a totally different attitude now, the levels of interest they
are charging us for stuff! We are trying to look at alternative situations such as Ulster
Community Investment Trust and new banks coming in which have more of a trade
union sector, we are sourcing new monies for trading through different channels. (Chief
Executive, Landmark East)
Ulster Community Investment Trust (UCIT) is a CDFI that aims to strengthen lending to
the community and voluntary sector. However, for Landmark East, UCIT does not always
offer the best rates or the scale of finance needed to develop larger schemes and unsecured
projects. Again, for some social enterprises, the greater challenge is public sector cultures
and the lack of coherent policy framework in either urban regeneration or social economics:
““The reason we started was that we were so frustrated with the current urban regeneration
policy, we got nowhere. We were so fed up with what was happening, but sometimes a
lack of policy focuses people to do it for themselves. (Chief Executive, Landmark East)
For community businesses the skills deficit is as pronounced in the statutory sector as it
is in the social economy. The Chief Executive was critical of the lack of understanding of
businesses challenges, how best to fund flexibly and the need to treat their project as an
operating business not a grant to be managed against time-bound outputs. He was especially
critical of the urban regeneration programme (Neighbourhood Renewal) for its emphasis
on small-scale community development projects and a lack of engagement with underlying
economic problems.
““Neighbourhood Renewal has the potential to be good for the voluntary sector but it is not
robust enough to support and develop businesses … The problem is that there is a lack of
policy and social economy businesses are being treated as community groups and not as
part of the entrepreneurial community. (Chief Executive, Landmark East)

Adaptive utilitarianism
Figure 1 attempts to bring together the main themes in the analysis of the data within Graefe’s
three scenarios. It shows the case studies cannot be neatly placed into any one category
and that all enterprises engage in a mix of market and ideological practices. A number
are involved in workfare schemes, business start-up and property management, including
partnerships with the private sector. However, they are also engaged in more explicit social
programmes aimed at groups left behind by mainstream welfare including homeless people,
children failing at school and underinvested and underserved communities. Each enterprise
has a clear appreciation of surplus and what it is for and has created a range of innovative
practices including health facilities on the interface as well as programmes to deliver services
to segregated communities. They have also engaged various accumulation strategies including
property portfolios, rental income and working in growth sectors such as informatics. Some
have more explicitly recognised the value of creating the necessary assemblages by and for
the social economy. The creation of such enabling infrastructure has permitted a degree of
independent thinking and planning both by necessity and design.
In 2009, DETI (2009) produced a Social Economy Enterprise Strategy that focused on
the needs of community businesses but provided little new finance, programme investment,
intermediation or skills support. Moreover, the formal evaluation of the strategy was critical
of inter-departmental coordination and the performance of the Social Economy Network (of
social enterprises) which was initially funded by DETI (KPMG, 2011). KPMG also showed
that the Network failed to develop as a meaningful arena for social enterprise support or
even as a useful mechanism to transmit government priorities for the sector. DETI has
1596 B Murtagh, K McFerran

Figure 1. Modes of working and performance issues.

since funded a new network, Social Enterprise NI, which is more rooted in the sector but
has only started full operation in early 2013. The Department has decided not to produce a
new policy but to support social enterprises via mainstream private business programmes
and marketing assistance, especially for exporters (which most social enterprises are not).
This both misses the distinctive financial needs and investment readiness skills required by
community businesses but could also reveal deeper political uncertainties about the sector
and its potentially disruptive tendencies. Economic development policies pursued by the
DUP and aided by Sinn Fein aim to rebalance the economy towards business-led growth,
introduce tax incentives, deregulate of the planning system and reduce public spending,
especially in welfare, social housing and the voluntary sector (Murtagh and Shirlow, 2012).
In such a context the sector has created its own support networks, social finance supply
and skills development, independent of the local state. The Big Lottery has established the
Building Change Trust (BCT) as a consortium of voluntary organisations, led by Community
Foundation Northern Ireland, to support the long-term development of the sector. This
involved a £1m investment in Charity Bank to strengthen lending, the delivery of a new
Investment Readiness degree with the University of Ulster and a technical support programme
for organisations aiming to develop social enterprise or trading options. BCT also pilot test
social innovations including Time Banks, new methods of accounting for social value and
the potential of ethical development finance in Northern Ireland. Models such as ECOM are
developed, tested and adapted especially as their limitations became clear. The business was
reformed as AVEC but such learning confirmed the need for more commercial strategies not
more ideological ones. Adaptation can produce excessive privatisation and profiteering but
is can also strengthen the social enterprise, critically where it does not decouple it from its
neighbourhood or value base.
Such assemblages have enabled the sector to support its own learning and development
but they also entangle it in market logics, a greater dependence on social finance and a degree
of grant aid displacement. Inevitably, social enterprises work across all three logics set out
Adaptive utilitarianism, social enteprises and urban regeneration 1597

by Graefe and have done so with varying degrees of deliberation. Working on contracts has
legitimised the enterprise with the local state, provided resources and enabled surpluses to be
used in more socially explicit ways. In these conditions, social entrepreneurs are self-aware
and even manipulative about the trade-offs they are prepared to make in the various business
practices they engage. The market mode is necessary because it enables the ideological
to be resourced and such utilitarian tactics enable the most robust social entrepreneurs to
accumulate without risking delegitimation by their host community.
Buttle (2008: 2101) makes the point that the issue here is not about what economic value
is but what it is there to do, arguing that ‘at different times and spaces, negotiations have to
be made between incommensurable values and a hard edged need to maintain circuits of
value’. Relocalising economic relations via grassroots enterprises that provide new facilities
makes profit from IT services or provides housing with care ‘are often countercultural and
self-consciously formed in response to unsustainable regimes’ (Seyfang and Haxeltine,
2012: 396). Inevitably, sustainable social enterprises work across all three modes and the
most effective entrepreneurs are capable of managing competing (market and ideological)
legitimacies to pursue useful counterculture strategies.

Conclusions
The struggle to identify a meaningful response to neoliberalism has created a productive
debate about the nature of resistance, the threat of co-option and the alternative conceptions
of value (Harvey, 2012). The social economy is significant precisely because it is engaged
in public and private markets with uneven effects, questionable ethics and uncertainty about
whether it can be exclusively conservative or politically radicalised. It is suggested here
that a simple binary between creative and deviant social enterprises is as unhelpful as it is
inaccurate. Community businesses have developed meaningful local circuits of consumption,
produced new services in underserved communities and revalorised assets around notions of
solidarity rather than profit. To do this they have entered markets, undertaken quasi-welfare
work and are ultimately adaptive, in a utilitarian sense, by making compromises in some
programmes to create social value in others.
Where critics do have a point is about the level of collaborative commitment and political
leverage of such practices. Certainty, in Northern Ireland the sector is limited by the capacity
of social enterprises to connect to any meaningful political movement. The social economy
can accommodate the neoliberal tendencies of the local state, flank measures to promote
enterprise and broadly mimic market behaviours or it can adopt a more corporatist position
and develop stronger partnerships with both the public and private sectors. Alternatively,
it can build on the practices and the ethics of self-help, which are not simply read off the
neoliberal script. For the social economy to grow in this way it needs: bespoke forms of
social finance, more focused skills and knowledge, preferential legislation and a stronger
political ethic about what it stands for and what it stands against. The need for a deeper
understanding of the capacity for adaptive learning and the relationship between process and
product is raised by the limited data considered here.
Linked to this, the sector clearly needs to become more competent and focus skills
on financial planning and project management as well as effective brokering, negotiating
community ownership and building strategies that reflect local needs not just respond to
the priorities of funders. These are not all traditional capacities for the sector in Northern
Ireland but they are critical to repositioning its role and value base in more progressive ways.
Legislative gains that have helped open opportunities for social enterprises across Britain,
such as asset transfer and procurement, are unlikely to be made by the Assembly and whilst
they are double-edged, they also provide an opportunity for the sector to diversify income
streams, accumulate property and compete in new markets.
1598 B Murtagh, K McFerran

Politicians continue to discipline the voluntary sector through resources, dictates

about its efficiency and preferring the private sector often in areas of traditional voluntary
activity (increasingly in social care). The sector is uncertain, competitive and even, at
times, disorganised but social economics offer more than just freedom from a recalcitrant
government. Building solidarity and more independent forms of serving disadvantaged
communities could create opportunities to resist the toxic mix of neoliberalism and
sectarianism that increasingly informs the real politic of Northern Ireland. The strength of
community businesses, a capacity to capitalise social finance and a desire to build alliances
across the religious divides offer some hope that such an agenda has potential for the sector
as well as for politics.

Declaration of conflicting interests: The author(s) declared no potential conflicts of

interest with respect to the research, authorship, and/or publication of this article.

Funding: This paper is, in part, based on research funded by the Office of the First and
Deputy First Minister, Northern Ireland. The views expressed are entirely those of the
authors.

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