Social innovation and the crisis of national inequality

Can anything really be done about the fundamentals of social mobility and inequality? After reading ‘Poverty Tsar’ Alan Milburn’s recent ‘State of the Nation Report 2014’ (the Social Mobility and Child Poverty Commission, 20 October) I am pessimistic.

It documents in painful detail the attempts of the last 20 years to tackle child poverty in particular, and wider opportunity in general. There has been some progress, though much of it was derailed by the recession, and the authors say that ‘the challenge for 2020 is to prevent Britain becoming a permanently divided society’ – a two tier society.

Among all the statistical debates about whether child poverty targets are closer or further away from being hit, one area really jumped out: housing.

Making the poor poorer

It is not just that rising house prices mean that half as many under-25s now buy a house compared with 20 years ago (21 per cent instead of 45 per cent) but the link to rising rents and inadequate supply of social housing mean the cost of rental in the private sector consumes an ever higher proportion of family income. The proportion of families in the private rented sector has leapt from 8 per cent in 2002 to 21 per cent in 2013. Here the risk of poverty for children is 44 per cent compared with 13 per cent where parents own their own home. Housing is making the poor poorer.

Buried in this section of the report is a chilling little phrase: ‘High house prices also pose a more fundamental challenge for social mobility – a weakening of the link between effort and reward.’ For a significant proportion of our citizens, a reasonable question to ask is ‘What have they got to look forward to?’ Whether in education, entering the world of work or wondering about retirement, what will motivate us to work hard and contribute to society, if there is nothing in return?

Social entrepreneurs cannot stand by while policymakers wring their hands and debate tweaks to these Treasury-dominated areas of national wellbeing, or where, in the case of housing, the government seems to feel virtually powerless. There are parts of the country where it is hardly worth pretending any longer that an upturn in the economy, a rise in GDP or a reduction in average unemployment is going to result in changed fortunes.

The renewal of hope

Something needs to change in terms of the renewal of hope. Where are the social innovations that might show enough potential to migrate into national policies which make a systemic difference? We may as well try ideas like these:

• Innovation in affordable housing to increase supply (try affordable housing zones in every community), and to widen access, e.g. through youth construction schemes which enable participants to earn a stake sufficient for their deposit, benefit from cost-priced housing (that is protected from speculation) and move on after a fixed period once their deposit asset has built up through a linked savings and credits scheme.
• Use the imperative for retrofitting existing housing stock as a massive job creation opportunity
• Social enterprise zones – these have been proposed many times, and tried half-heartedly. But why not relax planning and taxation to stimulate incentives for job creation, training and social innovation – including getting schools engaging fully in (social) enterprise?
• Running innovation competitions for the most investable social enterprise propositions which address key national challenges and are then connected with substantial social investment: housebuilding, homelessness, mental health services. (And this could help address the criticism that there is so much more social investment than credible investment propositions)
• Creating social business centres that focus solely on addressing local challenges and opportunities (a declaration of interest – and intent – my organisation, Allia, is developing ‘Future Business Centres’ which support social and environmental businesses – we’d love to see these in every community in Britain).

Social entrepreneurs who want to create systemic change should be getting on with launching these and a thousand other ideas which may, just may, hold the key to wider national renewal. They should also be lobbying government to adopt a more entrepreneurial stance to encouraging and adopting the best ideas.

Thankfully the report acknowledges that ‘the next government will not be able to deliver a social recovery on its own: it will need to mobilise a new national effort involving employers, schools, colleges, universities, parents and charities’. An invitation to serious partnership, perhaps.

The consequences of living in an ever more entrenched two tier society, where inequality goes on widening dangerously, demand a better process for social innovation. To adapt a marketing phrase, we need to ‘Just try it’.