Stepping in when markets fail

There are more than 7,000 full time equivalent jobs in around 1,200 social businesses across the Highlands and Islands. Some are delivering focused services to meet need, others have wide strategic development plans. Target markets vary across the social spectrum with a focus on community centres and halls, property, housing, energy, utilities, land, tourism, culture and heritage, and creative industries. 

The highest driver for the creation of social business is market failure ­– a gap in local provision or an identified market. Customers for these enterprises are broken down as 42% public sector, 34% private sector, 31% third sector and 85% general public.

Highlands and Islands Enterprise

With over five decades of experience supporting community-led development in our region, Highlands and Islands Enterprise (HIE) has a unique perspective on the importance of the third sector in social and economic prosperity. Empowering local people to maximise the opportunities from assets, create sustainable opportunities and drive growth is a wide-reaching, long-term strategy for HIE.

But, if we fully want to put local people at the centre of place-based economic development, there’s no question it takes time. The specifics for each place are unique, but all share the principles of partnership, collaboration and investment in developing community skills and leadership, in building infrastructure, attracting new industries and diversification to create jobs. 

Show me some growing communities

Communities taking things into their own hands mean they’re not waiting for development to be done to them. Community ownership and subsequent income generation are key drivers in enabling communities to identify, prioritise and deliver sustainable projects which meet need and maximise community benefit.

The first Highlands and Islands community land buyouts in the 1990s and early 2000s were high profile: Assynt Crofters Trust, Eigg, and more recently North Harris. Today, over three quarters of people in the Outer Hebrides live on community owned land. 

For North Harris, it has been a real success story with local people running the estate and managing their own assets. A great feature has been the ability to bring local and external stakeholders and private businesses together.

In the first decade of community ownership North Harris released land for affordable housing development; built a trust office which included affordable flats for rent; created housing units in Scalpay; established grid connected wind and hydro-electric schemes; launched a small grants scheme for local organisations; investigated tourism projects, including the former whaling station; and carried out a feasibility study and explored local support for a potential first community-led designation as a National Park. 

More recently we’re seeing remarkable communities across the region design and deliver projects generating vital income to re-invest in community priorities. Inspiring examples include tourism, hydroenergy and housing projects at the west coast Morvern peninsula, community-led tourism responses to the pandemic in Unst and in the west Highlands, and net zero island pioneers in Vatersay and Barra. With the world looking at how to address the climate emergency, local communities are amongst the #netzeroheroes leading the way in transition.

The bottom line

Collectively the 2019 Social Enterprise census estimated gross value added to the Highlands and Islands economy was £165m, creating around 7,300 full-time jobs. That census also suggested key challenges ahead, in particular addressing financial sustainability in a climate of declining grant funding, lack of time and capacity to develop trading, and increasing costs.

The future

The community in its broadest sense is always looking for the next opportunity or challenge to apply its energies and resources to, with ever increasing ambition. Availability of capacity for a long enough period to progress projects of scale can be challenging. There is room for more collaborative and joint working to support multi-partner models of working to grow.

There are some inspiring examples of this short and long-term strategic community and public sector development across the region. One is in the heart of the Highlands. Tomintoul and Glenlivet Development Trust has been working with HIE, the Cairngorms National Park Authority, Crown Estate Scotland, Moray Council and others over the last 10 years. They’ve led the acquisition and development of tourism assets and services, delivered heritage projects, and are well on the way to providing a 12 unit, affordable housing complex in Tomintoul, three of which are live/work units.

The project has been supported by the Scottish Land Fund, the Rural Housing Fund, HIE, CARES (Scottish Government Community and Renewable Energy Scheme) and Social Investment Scotland. The completion of the new affordable housing development will help to unlock additional, sustainable accommodation provision for the community, with eight of the properties being retained as community-owned dwellings for let. Four properties will also be sold on the open market at a discounted rate, supporting other members of the community to get onto the property ladder.

We need more partnership like this as increasingly scale will be needed in some of our more rural and remote places.  

Over the decades the third sector has been a key driver of community and economic development and sustainability in the Highlands and Islands. In times of Covid, charities and social enterprises have unquestionably demonstrated their value, supporting community resilience and recovery in a time of emergency for our rural and island geographies. They will increasingly be a fundamental and leading player in generating and cycling wealth locally.

Margaret (Mags) McSporran is head of Social Enterprise Development at Highlands and Islands Enterprise