Britain/US split?

["Michael Keaney" <Michael.Keaney@xxxxxx>]

Penners

My apologies for the earlier duplication. However, you can get a taste
of the Policy Network and its oeuvre if you check out

http://www.policy-network.org/main.phtml

The backers are among the cream of the European third way fraternity,
with a strong input from the ex-CP Demos think-tankers like Geoff Mulgan
and Charles Leadbeater. The prominence of the British input suggests
confirming evidence of the UK's "leadership" role in Europe, and in
projecting "European" interests further afield, as we see below.
Apparently Leadbeater has been using this forum (among others) to
challenge companies to offer better facilities so that their employees
may enjoy a proper "work-life balance". Interestingly this is exactly
the project that former CIA agent, Shell economist and Bank of England
Monetary Policy Committee member DeAnne Julius is now working on, as she
revealed in a Financial Times interview last week, offering an extended
plug for her book expected out some time next year. Perhaps this is
indicative of a dawning recognition on the part of the global policy
elites that the global anticapitalist movement may be winning too much
sympathy for comfort among hard pressed white collar staff. One
sincerely doubts Julius, Leadbeater & co will be worrying too much about
the employees of Nike contractors in Indonesia, for example.

The Policy Network has launched its own journal. Perhaps the best
analogue for it is the British journal "New Economy", published by
Blackwell. Established in 1993, it started as a kind of Will
Hutton-esque outlet for "sensible" social democrats concerned to give
intellectual momentum to a British "left" that had unexpectedly lost the
1992 general election. It attracts contributors from the centre right
(e.g. Alan Maynard, University of York health economist) to the non- or
possibly quasi-Marxist left (e.g. David Coats, Jonathan Michie), and, as
well as feeding the academic appetite for publishing, acts as a sounding
board from which policy wonks can pick and choose (perhaps even as a
springboard for the outsiders to become insiders). The establishment
around that period of the Institute for Public Policy Research was part
of this effort to replicate the New Right's success via the use of think
tanks and publishing outlets. Of course the IPPR has travelled a New
Labour path, and is now identifiably more rightwing than Hutton, who
remains a curious amalgam of unreconstructed Keynesian and quasi-New
Labour (in the sense that he does not support Old Labour policies, but
cannot bring himself to support New Labour policies either). Ken
Livingstone's shrewd appointment of Hutton to a committee of inquiry
into the London Underground PPP yielded an authoritative thumbs down to
the preposterous project, while the IPPR, of course, is at the forefront
of popularising the infusion of private finance into public investment
projects. The last edition of Private Eye featured an extensive expose
of the IPPR's "commission on public private partnerships", highlighting
the links between its members and companies that stand to benefit from
PPPs. But, despite these contortions and hiccups, clearly, the third way
has accumulated significant establishment support spanning big business,
the media, academia and the voluntary sector. There is now sufficient
critical mass for the third wayers to continue developing their policy
rationale, just like outfits like the Institute for Economic Affairs,
the Adam Smith Institute and the Centre for Policy Studies did for the
Conservative Party of the 1970s and 80s. Of course New Labour even
reaches into these fields now, as in Frank Field's close association
with the IEA. It truly is a broad church, thanks largely to the European
issue which has placed many otherwise rightwing conservatives into the
supposedly "left" pro-Europe camp (e.g. Chris Patten, John Major,
Kenneth Clarke). And now it's expanding beyond the UK and into Europe,
where its original backers have, in the main, always regarded Britain's
involvement as essential. Hutton's occasional published diatribes
against slavish adherence to US diktats by British governments provide a
useful clue to a major driving force behind such developments.

And while the focus of this mainly British-sponsored effort is primarily
European, of course other similarly-minded folks (as Dubya would say)
are welcome to join, as this author, possibly familiar to Rob
especially, demonstrates.


The Rise of Social Entrepreneurs

Society's most entrenched problems require the creativity and resources
of the public, social and business sectors

by: Mark Latham MP

date: 14 Jun 2001

         Society's most entrenched problems require the creativity and
resources of the public, social and
         business sectors.


         My interest in welfare reform comes from 35 years of experience
with public housing estates, first as a
         resident and now as a Member of Parliament. I represent several
broadacre public housing areas in
         Sydney's South-West with unemployment rates of 50 per cent and
welfare dependency rates of 80 per
         cent.

         My main purpose in public life is to do something about this
problem. I visit the estates as often as
         possible and try to learn as much as I can from the people who
live and work there. This has given me
         a different attitude to poverty from most people in politics.
My conclusion is that we should forget
         about the grand theories of sociology and the ideologies of the
old politics and pursue an
         evidence-based approach to welfare reform. Poor communities
have more to teach us than we have to
         teach them.

         One of the problems of modern politics is its disconnection
from the poor. The people who work in the
         political system lead a lifestyle totally removed from the
experiences of disadvantaged suburbs.
         Machine politicians - the spin doctors, opinion pollsters and
party bosses who dominate the system -
         have no interest in public housing estates as these suburbs are
not within marginal seats. Politicians of
         this kind are more comfortable talking about poll-driven
subjects, such as so-called family values.

         In recent decades, Left-wing politics has become associated
with an abstract rights agenda. This has
         been a middle class movement, with affluent people making laws
and running programs on behalf of
         the poor. In disadvantaged areas, however, social
responsibilities are regarded as more important than
         legal rights.

         The other side of politics is just as bad. The libertarian
Right is obsessed with individual freedom. Yet
         for people outside the main centres of economic and political
power in our society, all they have is the
         freedom to be poor. The rhetoric of a free society rings hollow
in the poorest parts of my electorate.

         The disconnection of the political system is also evident in
the work of its opinion makers: the media,
         the academy and the bureaucracy. Journalists, academics and
senior public servants do not live in
         public housing estates and rarely have cause to visit them. I
have never read a newspaper editorial or
         journal article about the welfare system based on the author's
first-hand experience with poverty.

         Against this background, it is not surprising that Australia's
welfare debate has become surreal. It bears
         no relation to the things I see or hear in my electorate. This
confirms one of the golden rules of
         Australian politics: the things that people say in poor suburbs
are completely different to the way in
         which the issues are debated in parliament and the media. Our
public life has become abstracted from
         the day-to-day practice of poverty.

         As a result, welfare has become an exercise in political
mythology. It gives people on the Left a warm
         inner glow, even though they have little understanding of how
the system works in practice. It gives
         people on the Right something to demonise, even though they
have no understanding of what might
         take its place.

         The welfare state is good at mythology but not so good at
ending the problems of poverty. To do this
         we need to take different approach: to learn from the poor, to
ground all aspects of welfare policy in
         the experiences of poor communities. Inevitably, this is an
uncomfortable process: it challenges our
         preconceived political views; it by-passes the elitism of
modern politics.

         My objective today is to make you feel uncomfortable. I want to
outline the evidence from my
         electorate and to puncture the many myths of the welfare state.
But most of all, I want to talk about the
         things which work in practice - the evidence-based policies by
which we can end the human tragedy of
         poverty.


         The Myth of Government Spending

         The welfare debate in Australia primarily involves an argument
about government spending. It is a
         myth, however, to believe that governments have the capacity to
spend their way out of the welfare
         problem. The era of tax and spend politics has ended. There are
binding limits on the size and
         effectiveness of the public sector.

         Policy makers now face the dilemma of overloaded government: so
many funding demands on the
         welfare state, yet so few funding sources in the globalised
economy. Footloose capital has forced
         governments to bid against each other for jobs and investment.
Whereas companies used to pay
         money to governments, the reverse is now true.

         At the next Federal election, for instance, Labor is committed
to spending less and taxing less than the
         Howard Government. We accept the realities of an open economy
and the limits this places on
         government budgeting. At the bottom line, Labor stands for a
smaller public sector.

         Anyone who believes in the likelihood of huge increases in
welfare spending is off with the pixies.
         Alternative strategies need to be found. Government alone
cannot solve the problems of poverty.
         Increasingly, welfare reformers need to look beyond the limits
of the welfare state. Society's most
         entrenched problems require a cross-sectoral approach -
harnessing the creativity and resources of the
         public, social and business sectors.

         These social partnerships are the best way of creating
successful communities. They adopt a policy of
         "all shoulders to the wheel" - governments, corporations,
community organisations and welfare
         recipients, all doing more to end the curse of social
exclusion.

         In Werriwa's public housing estates this is seen as a
commonsense strategy. Contrary to the rhetoric of
         Left-wing politics, poor people have little faith in the role
of government. They already live in the
         equivalent of socialist suburbs, with 90 percent of the income
and assets owned by government. Yet
         unhappily, this is a sign of their poverty rather than a
solution to it. The hatred of the bureaucratic
         failings of the Department of Housing, Social Security and the
Child Support Agency is palpable.

         The organisations with the greatest public support lie outside
the public sector. Non-government
         agencies such as St Vincent de Paul and Anglicare are well
respected for their pastoral role. Based on
         the evidence, we need to mobilise more resources of this kind.
Government-first welfare strategies are
         a recipe for failure.


         The Myth of Government Intervention

         Even if governments had more money to spend on welfare, this is
not necessarily a good starting point
         for poverty alleviation. The debate between Left and Right has
overlooked the social or moral
         dimension of poverty.

         In my experience, the chief demand in public housing estates is
not for more government intervention
         or more market forces. It is to normalise the neighbourhood -
to give people a stronger sense of
         community and cooperation in their relationship with others.
People want to feel safe and secure on
         the streets; they want to be able to trust their neighbours and
work together with a feeling of common
         purpose.

         These social foundations are vital to the success of the public
sector. All the evidence shows that when
         people have a high level of trust and self-esteem they are more
likely to make good use of government
         support, such as training programs and welfare payments. There
is a thing called society. And without
         it, there can be no end to the poverty cycle.

         Some skeptics, of course, will say that the first priority for
poor people is employment. While jobs are
         crucial, it is also true that the first step towards labour
market success is a normal social environment.
         When I grew up in the Green Valley housing estate in the 1960s,
for instance, most of the dads were in
         work. This provided effective role models and mentoring.

         The emergence of long term and inter-generational unemployment
in the 1980s, however, has had a
         crippling social impact. My most depressing experience in
public life has been to hear the principals of
         disadvantaged schools report on their career counseling
sessions. When asked about their career
         aspirations, some students say: "I'm going to do what my dad
and grand-dad do - go on the dole."

         With the loss of the regular habits and dignity of work,
society's norms and standards have fragmented.
         This phenomenon has eroded self-esteem and given people a
perverse sense of their own interests. It
         is not possible to get people back into work without first
fixing the social dimension.

         This insight exposes the problem with traditional welfare
strategies. Governments usually think of
         exclusion in terms of financial capital, through finely
calibrated measures such as the Henderson
         poverty line. It is assumed that the machinery of the state can
dispense enough money to lift people
         above the line.

         The key step in dealing with poverty, however, involves the
creation of strong lines and relationships
         between people. We need to put the social back into social
justice. Unfortunately, this task is beyond
         the reach of government agencies. While the state is skilled in
the redistribution of financial resources,
         its community development projects are rarely successful. I am
yet to come across a bureaucracy that is
         capable of creating social capital.

         In some respects, this is hardly surprising. Bureaucracies rely
on standardised structures and procedures.
         Communities rely on a diffuse set of social relationships. It
is impossible to standardise trust and
         self-esteem. Whenever bureaucracies intervene in community life
they tend to smother the essential
         sparks of social capital and creativity.

         This has produced a crippling paradox within the politics of
the Left. Its flagship welfare policies, such
         as transfer payments and training programs, are directed at
individuals rather than communities. No
         less than the libertarian Right, it has eroded the collective
bonds of civil society.

         For many in the welfare sector, this is bound to be an
uncomfortable conclusion. The evidence,
         however, demonstrates the need for a new approach to welfare
support. This is not a question of
         abandoning the welfare state but rather, redefining its
strategic role. The public sector still needs to
         provide basic services and support, but in a different sequence
to the traditional approach.

         It needs to act as a junior partner to communities, intervening
with special programs and resources
         only once the foundations of social capital have been laid. In
the past, government expected civil
         society to fit the bureaucratic mould of the welfare state. Its
new role is to identify and nurture
         successful community projects. This is what we call the
enabling state.


         The Myth of "Pity the Poor"

         Australia's welfare system is plagued by false expectations. It
is assumed that good welfare policy relies
         on increased public spending and greater government
intervention. On both counts, this is an illusion.

         Unhappily, these assumptions have created a culture of
paternalism within the welfare state. It
         operates under the suspicion that the poor are hopeless. It
gives little credence to the idea that the
         poor actually have the capacity to help themselves. It
positions the poor as the problem and
         government as the only solution.

         In practice, however, this "pity the poor" attitude is the real
problem. It under-rates the capacity of poor
         communities to fight back from adversity. It under-estimates
the ability of poor people to develop their
         talents and creativity. In the public housing estates in my
electorate, the communities are always trying
         to fight back. Setbacks are invariably followed by a burst of
energy and effort, a collective desire to
         improve the neighbourhood. There is no shortage of leadership
and bold plans in these suburbs.

         Unfortunately, the public sector is not very good at
identifying and supporting this process. It lacks an
         antenna for bursts of innovation at a local level. Very often
it treats the people involved as nuisances
         or troublemakers - residents who are unwilling to follow the
bureaucratic mould and do things the
         conventional way. As a result, the sparks of creativity in poor
suburbs tend to be smothered by the
         government-first agenda.

         This is one of the reasons why inequality and social exclusion
have become so entrenched in our
         society, despite high levels of welfare spending. The welfare
state has been built around bureaucratic
         structures instead of the capacities of people. It has placed a
dead hand on innovation and self-help in
         disadvantaged neighbourhoods.

         The paternalism of welfare policy needs to end. We need to back
people, not structures. We need to
         work on the assumption that, in each poor area, the answers to
poverty lie within the community itself.
         In most cases, the things that are wrong with poor people can
be fixed by the things that are right and
         promising in their lives.


         The Myth of Static Poverty

         It is also important to appreciate the dynamic nature of
disadvantaged communities. Traditionally,
         welfare policy has taken a snapshot view of poverty, measuring
the number of people below the
         poverty line at a particular point in time. Governments have
concentrated on the recurrent payment of
         income support as a way of responding to this problem.

         This static analysis, however, takes no account of variations
in economic and social circumstances over
         time. For most people, poverty is not a permanent condition. It
is estimated that 30 percent of society
         experiences occasional bouts of exclusion - falling in and out
of the workforce, struggling with
         workplace restructuring, adjusting to changes in family and
community life and so forth.

         A recent study in the United Kingdom, for instance, revealed
that while one-third of families suffered
         episodes of low income, only four per cent were persistently
poor. From my experience, I would expect
         the situation in Australia to be similar, with five to 10
percent of people experiencing long-term
         poverty. Unfortunately, the welfare research in this country is
devoid of longitudinal studies.

         Most of the trends in our society, especially the emergence of
a new economy, point to greater
         fluctuations in life's circumstances. We now live in an era of
relentless insecurity. Whereas the post-war
         welfare state was designed to give people economic security and
greater peace of mind, this objective
         seems increasingly remote.

         Compared to the relative certainty of the 1950s and 60s, an
average working family is now 50 percent
         more likely to experience an unexpected decline in its living
standards. This reflects the pace of
         economic and social restructuring, with the rise of job
insecurity and family and community
         fragmentation. It also presents a more realistic view of
economic exclusion, with people moving above
         and below the poverty line on a regular basis.

         For people in these circumstances, the welfare state is
inadequate. Recurrent transfer payments were
         never designed to deal with continuous variations in life's
conditions and the insecurity this brings. The
         benefits system was developed at a time when society was more
stable and predictable. We need to
         find new ways of ensuring that people at-risk of poverty can
cope with the inevitability of change. New
         welfare strategies are needed to give society a stronger sense
of security.


         The Myth of Public Administration

         One of the consequences of rapid economic and social change has
been a new geography of poverty.
         As people move up and down the income ladder they more readily
change their place of residence.
         Society has become more mobile and communities less stable.

         This process has generated a significant level of population
churning, with people moving in and out
         of poor suburbs as their economic circumstances dictate. It has
also produced something of a paradox:
         even though a limited proportion of society is permanently
trapped below the poverty line, a large and
         growing number of neighbourhoods display the characteristics of
permanent poverty.

         In short, the incidence of poverty has become more
geographically concentrated. The social atlas of
         Australia's major cities shows that the most reliable guide to
someone's socio-economic status is their
         postcode. This is not just a matter of disadvantaged
individuals clustering in certain suburbs. The
         places themselves have become part of the problem.

         Research has shown that the problems of disadvantaged
neighbourhoods are much greater than the
         personal characteristics of their residents. Networks of social
exclusion feed off each other and
         compound the problems of poor areas. Significantly, the new
geography of poverty has a multiplier
         effect.

         The evidence indicates that welfare policies need to be
place-specific. This explains the growing
         interest in the concept of place management - an attempt by
policy makers to focus the work of
         government agencies on particular locations. While this work is
still at an early stage of development,
         it nonetheless recognises the need for new responses to
poverty.

         Traditionally, the public sector has been organised like a
series of silos or stove-pipes. Departments
         have been structured around functional responsibilities - such
as transport, education, health and
         family services - rather than the needs of locations. What we
call "public administration" has not been
         very public at all. It has been disconnected from the way in
which people lead their lives, especially in
         poor areas.

         Unfortunately for disadvantaged people and places, their
problems do not easily fall into each
         segment of government. A poor education, unemployment, health
issues, domestic violence and other
         social problems invariably overlap and reinforce each other.
Poverty needs to be understood as a
         process, rather than a series of segmented events.

         The welfare state has struggled to respond to this reality. It
does not have a "Department of Poverty" or
         other mechanisms by which its programs can be closely
coordinated at a local level. The public
         housing estates in my electorate, for instance, feature 17
different government agencies providing 23
         different programs and support schemes.

         While each agency is significant in its own right, no one has
responsibility for the neighbourhood as a
         whole. This produces a high level of buck-passing and
frustration within the agencies themselves.
         There can be few things worse in the public sector than working
in poor areas but not having the power
         to solve poverty. Overcoming this deficiency is one of the key
tasks for welfare reform.


         The Myth of Abstract Rights

         Whenever I visit the disadvantaged schools in my electorate, I
always put the following question to the
         school principals: if you could change one thing about the
school what would it be? Significantly, they
         never nominate the need for more recurrent funding or better
buildings. What they really want is to
         "get the parents more involved in the things we do, to have
education appreciated in the home as well
         as at school." This verifies one of the basic principles of
disadvantaged areas: socially responsible
         behaviour is valued ahead of social rights.

         Among the many myths of the welfare state, this is the most
pervasive. While millionaire media
         commentators such as Phillip Adams and trendy Left politicians
such as Natasha Stott Despoja focus
         solely on the rights agenda, the people who live and work in
poor areas have a different set of
         priorities. They know that there can be no end to the poverty
cycle without effort and responsibility.

         Social rights and freedoms can only be exercised in the context
of a mutually responsible society.
         People can be well off financially, yet they will not be free
if they cannot walk the streets with a sense
         of safety. People can benefit from a strong social safety net,
but they will not be free to achieve in
         society unless they are willing to seek new skills and work
opportunities. And as the principals in
         Werriwa understand, children can spend a lot of time at school,
but they will not be free to realise their
         potential in life unless work and education are valued in the
home by their parents.

         Rights alone are not enough. They need to be matched by
responsibilities. This is the central failing
         of contemporary Left-wing politics. It has dished out a
plethora of rights without demanding a
         corresponding set of social responsibilities. It continues to
talk about a good society but without any
         reference to the relationships and morality between people.
Notions of community and shared
         obligation are external to its abstracted world.

         Yet, in practice, this is all the poor themselves want to talk
about. The core demand in disadvantaged
         areas does not involve the extension of social rights. It is to
make the neighbourhood normal - to
         ensure that people act responsibly and respect each other's
interests.

         For decades I have been involved with these areas and not once
have I seen people embrace the
         rights agenda. Not once, whether in the form of feminist,
environmental, ethnic or welfare rights. Poor
         communities have little time for abstract politics. They are
too busy trying to get the basics right:
         protecting their property, making ends meet and fighting back
against poverty.

         It is a fallacy to believe that poor people are opposed to the
mutual responsibility agenda. In fact,
         more than any other part of society, they appreciate its
benefits. This does not have to be a top-down
         process. Instead of imposing programs like Work For The Dole in
an authoritarian fashion, the Federal
         Government should ask poor neighbours to develop their own
programs of mutual responsibility. This
         act of empowerment would not only achieve significant results;
it would help to expose the myth of
         abstract rights.


         Evidence-Based Solutions

         Once the myths of the welfare state have been dealt with, the
pressing need for policy reform is
         evident. The welfare strategies developed in the post-war
decades are not suited to the modern
         challenges of poverty. If we could start a fresh, if the
welfare state was being created today, it would
         need to respond to a vastly different set of economic and
social circumstances. Based on the evidence,
         it would need to:

         - form partnerships and mobilise resources from across society;


         - create social capital as a necessary precondition for poverty
alleviation;

         - bypass bureaucratic structures and back the capacity of poor
communities to fight back;

         - develop a new system of welfare support in response to the
growth of economic insecurity;

         - focus on the unique problems of disadvantaged places; and

         - get serious about the fulfillment of social responsibility.

         These issues sit outside the boundaries of the old politics. In
the second half of the 20th Century, the
         welfare debate involved a struggle between government-first and
market-first policies. It is now clear
         that both strategies are flawed. We need to look beyond the old
Left and the new Right for welfare
         solutions.

         This is the advantage of an evidence-based approach. It uses
the skills of observation and logic to
         identify relevant welfare policies. Solutions to poverty are
available, once we lift our eyes and ideas
         beyond the old ideological parameters.


         Social Entrepreneurship

         Like most people in politics, I started out with a fairly
doctrinaire approach to welfare policy. I believed
         in the capacity of state intervention to remake people's lives
and clear away the problems of poverty.
         The seat of Werriwa, however, has shown me that this is a
delusion. The bureaucratic machinery of
         government is poorly suited to the complex and diverse nature
of poor communities.

         Indeed, the only sustainable progress in tackling the problems
of disadvantage in my electorate has
         come from outside the bureaucracy. We have been fortunate to
benefit from a special group of people
         and projects: two of which have improved the public housing
areas and another which has developed
         an innovative model of child care and education for
intellectually disabled children.

         A striking aspect of the three projects is that they fit the
description of what the welfare reform
         movement in Britain calls "social entrepreneurship". In the
past, the welfare and corporate sectors were
         regarded as mutually exclusive. Welfare workers were deeply
suspicious of the involvement of
         businesses in community development projects and likewise, the
corporate world had little time for the
         values of social work.

         The evidence suggests that social entrepreneurs have a unique
capacity for bridging this divide. In the
         process, they have been highly successful in dealing with the
new challenges of poverty. They have
         found fresh solutions to social exclusion, solutions that
appear to be beyond the capacity of the welfare
         and business sectors operating in isolation.

         So who are these special individuals and why have they been
successful? Social entrepreneurs come
         from a range of backgrounds, such as churches, welfare agencies
and community organisations. They
         can also emerge from the public sector - middle managers that
have been liberated from the
         bureaucratic rules and methods of government.

         Social entrepreneurs combine the best of social practice,
forging new connections and support
         between people, with the best of business practice, encouraging
risk-taking and creativity in poor
         neighbourhoods. They play the role of community brokers:
helping communities to fight back;
         nurturing small bursts of effort and achievement; linking these
projects to new partnerships and
         alliances; thereby creating a wider span of community success
and social capital.

         They are also capable of creating something out of nothing.
Social entrepreneurs are good at taking
         disused public assets (such as old buildings and land) and
turning them into community achievements.
         This is not just a matter of physical change; it also involves
social change, creating new networks of
         self-esteem and cooperation. At their formative stage, the
projects involve a community hand-up
         instead of a government hand-out.

         This is a critical distinction. Social entrepreneurs are
different to other parts of the social sector.
         Whereas social workers rely on government grants and social
enterprises rely on start-up capital, social
         entrepreneurs start out with nothing. Their only resources are
within the community itself, namely
         under-utilised people and buildings. As the British author
Charlie Leadbeater puts it, they are capable
         of "living on thin air."

         Social entrepreneurs are also likely to live and work within
the communities they serve. Whereas most
         social welfare organisations operate out of CBD offices, social
entrepreneurship has a neighourhood
         focus. Its projects are based on a high proportion of local
employment and local support. This is not
         the type of community work in which the workers come from
outside the community.

         In summary, social entrepreneurs are more interested in
developing people than structures. They place
         a premium on relationships of collaboration and partnership.
Importantly, they see the corporate sector
         as an ally in this task. In Britain, for instance, social
entrepreneurship functions under the catch-cry of
         "communities in business, not communities in committee."

         In the past, community projects have been managed on either a
top-down or bottom-up basis.
         Through the work of social entrepreneurs, however, communities
tend to grow inside-out. From small
         beginnings, networks of trust and cooperation are developed
over time. This is the best way of
         generating social capital and normalising poor neighbourhoods.

         With this social platform in place, the financial, employment
and training programs of government are
         likely to achieve their best results. Indeed, the social
entrepreneurs themselves are only willing to seek
         government support once the local community is ready for it.
They know that there is little point in
         pouring large amounts of public money into dysfunctional
neighbourhoods. The machinery of the
         state needs to be built on sound social foundations.

         There is nothing to be gained from doubting this approach. The
social entrepreneurs in my electorate
         and elsewhere are getting results. Forget about the textbooks
and grand theories of sociology. Throw
         away the scores of government reports on social exclusion. When
it comes to eliminating poverty, what
         matters is what works.

         At one level, it is not difficult to understand the success of
social entrepreneurship. It meets most of the
         criteria for modern welfare reform. It relies on partnership
formation rather than government spending.
         It focuses on the social dimension of poverty instead of
government intervention. It believes in backing
         the talents of local communities rather than pitying the poor.
It concentrates on the development of
         people and places ahead of the silos of public administration.

         This is the big idea in welfare reform. The big challenge, of
course, is to work out an effective role for
         public policy. It is not easy to reconcile the contrasting
cultures of the state and social entrepreneurs.
         To a large extent, social entrepreneurs aim to bypass the
traditional machinery of government. They
         avoid bureaucracy like the plague.

         Likewise, the public sector is not comfortable with an
independent approach to community
         development. Its politicians prefer a "big bang" style of
project implementation, with the visible gains
         of new buildings and services. The work of social
entrepreneurs, however, is incremental and mostly
         invisible to the political system.

         Government officials also have concerns about the
accountability of these projects. The risk-taking
         ethos of social entrepreneurs rubs up against the conventions
of public sector management. The
         bureaucracy is uncomfortable with unpredictable processes,
especially those that are hard to quantify
         in financial terms. Concepts such as social capital are
difficult to measure and incorporate into the
         budget bottom line.

         Until recently, I thought that it might be possible to change
the way in which government agencies
         function to more effectively match the social entrepreneurial
approach. This is why I have been
         advancing ideas like place management and public sector
flexibility. On reflection, however, this is an
         unrealistic goal.

         Social entrepreneurs are the ultimate networkers, operating
within flat, devolved and connected
         organisations. The machinery of government, by contrast, is an
insoluble hierarchy. It is organised such
         that power and information are concentrated at the top of
stand-alone institutions.

         In the world of nature, we know how hard it is to make
elephants move like tigers. So too, in the world
         of governance, we should not delude ourselves into believing
that bureaucracies can behave like
         social entrepreneurs. They are poles apart.

         Rather than reshaping the bureaucratic mould, we need to create
an alternative mechanism by which
         public sector resources can be used to support social
entrepreneurship. Just as the social entrepreneurs
         themselves seek to bypass bureaucracy, public policy needs to
bypass the traditional methods of
         government. In effect, we need to create an alternative welfare
state - one that harnesses the values
         and ethos of social entrepreneurship in its funding base.


         Social Venture Capital

         In early April Brian Murnane, one of the social entrepreneurs
in my electorate, spoke to the Social
         Policy Committee of the Federal Labor Caucus. He set out the
Claymore story: how the worst suburb in
         Sydney had been transformed into a normal, functioning
neighbourhood. He then explained the next
         phase of this ambitious project: the purchase of the local
shopping centre and the development of
         community businesses and training programs.

         At this point Murnane said something unique. He said that "we
don't want a hand-out from government
         to do this, we want a low-interest loan, we want venture
capital." I have never heard anyone from the
         social sector talk this way in Canberra. Usually they come
cap-in-hand looking for government grants.
         Paying the money back to government with a return on
investment? Murnane was talking about a
         revolution.

         This demonstrates the distinctive nature of social
entrepreneurship. Having normalised the
         neighbourhood, Murnane now wants to get the community into
business, to reconnect Claymore with
         the real economy and to develop a culture of enterprise. In
their hunger for success, social
         entrepreneurs straddle the corporate and social sectors. They
think like businesspeople, yet they also
         practice the values of compassion and opportunity.

         As a consequence, these projects rarely comply with the silo
structure of public administration. No level
         of government - Federal, State or local - currently provides
venture capital of this kind. Unfortunately,
         Claymore's success is in danger of stalling as it tries to
progress to its next stage of development. The
         creation of social capital needs to be followed by improved
access to financial capital.

         This requires the establishment of social venture capital.
Governments need to replicate the success of
         the private sector in making long-term equity investment
available to entrepreneurs. This approach
         bypasses the bureaucracy; it matches the ideals of social
entrepreneurship. It forms the basis of an
         alternative welfare state: Social Venture Capital Funds
directly resourcing innovative projects at a
         local level.

         In the past, governments have provided a huge amount of money
to community development projects
         but with little success. These programs have followed a
familiar pattern of failure: the formation of
         local
         co-ordinating committees; the involvement of residents
enthusiastic about a new approach; some
         capital works and physical changes; skepticism and resistance
from central government agencies; a
         gradual loss of effort and enthusiasm at a local level; demands
for further government funding; and
         ultimately, the collapse of the program.

         Social entrepreneurs turn this process around. They operate on
the basis of increasing returns to
         investment, accumulating additional partners and social capital
as their projects develop. Social
         venture capital would aim to back this kind of success. It
would allow social entrepreneurs to move poor
         communities back into the real economy.

         Each year the Federal Government spends approximately $500
million on community development
         and other location-specific projects. A similar amount of
funding is provided under various State and
         local government programs. It should be possible, therefore, to
redirect at least $1 billion of public
         money into social venture capital.

         It is also important to mobilise private sector contributions.
Last year, as part of the Prime Minister's
         so-called social coalition, the Howard Government provided an
additional $71 million per annum in
         tax concessions for corporate philanthropy. Unfortunately, this
program perpetuates the worst aspects of
         passive charity. It encourages corporate executives to write
their cheques on the 25th floor and then
         wipe their hands of any direct contact with the poor. It
promotes a hand-out instead of a hands-on
         approach to poverty. Indeed, it is difficult to understand how
a social coalition can be formed without
         the development of social relationships.

         These tax concessions should be redirected to the facilitation
of social venture capital. It should be
         possible to leverage $1 billion of private sector investment,
bringing the total amount of start-up
         capital to $2 billion. Tax concessions of this kind are doubly
beneficial: not only do they increase the
         resources available to social entrepreneurs, they also
encourage firms to take a hands-on role. Once
         companies invest in social venture capital they have a clear
interest and reason to dedicate staff
         resources and know-how to the success of the projects. In this
fashion, social venture capital has the
         potential to close the social and economic gap between our
richest and poorest citizens.

         I envisage a network of ten Social Venture Capital Funds, each
carrying capital of $200 million. As
         with most venture capitalists, the funds
         would be small-scale units. Experts in social entrepreneurship
and business investment would staff
         them. They would also need to develop good contacts and
information for the identification of
         suitable projects. The newly formed Social Entrepreneurs
Network (SEN) should be able to assist this
         task.

         The SVCFs would compete against each other, aiming to deliver a
healthy rate of return to their
         public and private investors. The most successful funds would
undoubtedly attract further corporate
         contributions. I would also expect the funds to develop a range
of specialties. Social entrepreneurial
         projects tend to be quite diverse, depending on their geography
and purpose. The identification of
         successful projects, therefore, requires a high level of
expertise. Some funds, for instance, would carry
         a high proportion of Aboriginal projects in their portfolios,
while others would concentrate on inner city,
         outer suburban and rural projects.

         Based on the experience in my electorate, I would anticipate
two to three hundred projects
         nationwide. Social entrepreneurship, of course, cannot be
manufactured or franchised. It lies within
         the skills of community leaders. I have no doubt, however, that
this type of leadership is available
         across the nation. In many cases, it has been lying dormant,
under-utilised by the welfare state. Social
         venture capital would overcome this deficiency.

         This is a new way of thinking about public policy: actively
bypassing the formal institutions of
         government. Traditionally, welfare has only been of use to
people as long as they remain poor. Social
         venture capital aims to tap into the wealth that lies beyond
the welfare state. Welfare policy needs to
         provide more than just compensation; it needs to reconnect
disadvantaged people and places with the
         real economy. This approach has several advantages:

         - Most importantly, it harnesses additional resources to the
welfare task. Given the limitations on
         government funding, social partnerships and improved capital
access have become all-important.
         Social entrepreneurship is the best way of maximising the
financial, human and social capital
         available to poor communities.

         - Social venture capital is perfectly suited to the work of
social entrepreneurs. It complements their
         culture of creativity and risk-taking. It also meets their
requirement for patient capital. Just as social
         entrepreneurs take a long-term approach to the development of
social capital, they need access to
         long-term investment funds.

         - The SVCFs are also likely to attract a higher level of
corporate support than the traditional
         philanthropic approach. Businesspeople want to deal with
organisations that talk their language and
         share their ethos. The funds are ideally suited to this role.
They are also well placed to take advantage
         of the emerging trend towards socially responsible investment,
especially among Australia's
         superannuation funds.

         - Social venture capital addresses one of the chief inequities
of the new economy: the hollowing out of
         investment and employment opportunities in disadvantaged
neighbourhoods. These areas have
         become enclaves of exclusion, with a downward spiral of low
consumption, low investment and social
         stigmatisation. The SCVFs would break this cycle. The Federal
Government needs to provide
         mechanisms and incentives for business investment in theresponsibility works. Participants in the
         Work For The Dole scheme, for instance, cannot understand why
they need to be put on buses and
         sent to projects 10 to 20 kilometres away when there is so much
work to be done in their own patch.
         The first and most important obligation of welfare recipients
is to their own communities. The creation
         of social capital starts at home.

         Accordingly, the Federal Government should devolve the
authority for mutual responsibility to a local
         level. Social entrepreneurs should be empowered to determine
these arrangements, in consultation
         with local residents. This would add substantially to the
social and economic resources available to
         their projects.

         The Aboriginal activist, Noel Pearson, has given an example of
this approach within the Cape York
         community. Pearson wants his people to take responsibility for
fighting back against poverty. He
         believes that Aboriginal welfare should be paid into trust
funds administered by tribal elders. The
         money would only be released once Aboriginal men had taken
proper responsibility for their actions
         and caring for their families.

         This policy combines the best features of government support,
Aboriginal self-determination and
         personal responsibility. It highlights the benefits of a
devolutionary approach to welfare policy.
         Incredibly, both sides of Federal politics have been reluctant
to move down this path.

         I would expect other social entrepreneurs to devise equally
innovative proposals. This is the best way
         of broadening the coverage and success of mutual
responsibility. This issue is still in its formative stage
         in Australia. In particular, it is yet to impact on education
and health care outcomes.

         In some parts of the United States, for instance, public
housing tenants are required to undertake
         education and training courses as a condition of their rental
leases. This not only creates new labour
         market skills, it improves the capacity of parents as
educators. Governments have an obligation to
         provide housing and training for poor people. But so too,
parents have a responsibility to develop the
         skills by which they can be effective educators in the home. At
a time when educational qualifications
         have become all-important, there can be no excuse for poor
parenting.

         Equally, there can be no excuse for the poor management of
health and lifestyle issues. The huge
         public costs of health care are a consequence of personal
irresponsibility - in dietary, drinking,
         smoking and exercise habits. Some doctors are now making
expensive medical treatments conditional
         on changes to personal behaviour. Public policy should not be
afraid to assist this process.

         Finally, this model of mutual responsibility would also act as
an alternative to the Federal
         Government's Job Network. Currently the network suffers from
the problems of monopsony - where the
         government acts as a single buyer of employment services. This
has led to a series of anomalies in the
         pricing and quality of services.

         Under a policy of devolution, social entrepreneurs would play a
role in the provision of labour market
         programs and the application of mutual responsibility. Social
venture capital would serve as an
         alternative source of funding, allowing social entrepreneurial
projects to buy-in a range of employment
         services, in competition with the Job Network. This confirms
the benefits of an alternative welfare state:
         it breaks up the government monopsony and creates greater
competition for the cost-effective use of
         public funds.


         Stakeholder Welfare

         A reformed welfare state must also respond to the growth of
social and economic insecurity. People
         who oscillate in and out of poverty need to be able to smooth
out their income fluctuations, drawing
         on a range of assets during periods of disadvantage. We need to
move from a system of recurrent
         income transfers to one based on asset accumulation.

         This approach is known as asset-based welfare reform.
Internationally, both sides of politics have
         embraced this policy, from the Bush Administration in the
United States to the trade union movement
         in Sweden. Unfortunately, it is yet to have a significant
impact on the Australian welfare debate. This
         is a major shortcoming, again demonstrating the isolated and
inward looking nature of our political
         system.

         Asset-based policies aim to move with the tide of economic
change. The new economy is placing a
         premium on asset accumulation. This is a new benchmark against
which the notion of social inclusion
         needs to be measured. A good society has each of its citizens
actively participating in the benefits of
         financial, human and social capital. The purpose of a
modernised welfare state should be to assist this
         process.

         In the old system, governments tried to redistribute economic
resources through tax and spend
         strategies. As noted earlier, there are now clear limits to
this approach. In any case, transfer payments
         are not a good way of generating economic and social
participation. Instead of fostering self-reliance
         and security, they force people to rely on the benevolence and
fiscal capacity of governments.

         People need a tangible stake in society and the new economy; in
effect, they need to be freed from
         the vagaries of the welfare state. For those facing insecurity,
assets are an essential buffer against the
         contingencies of change. They allow people to smooth out their
income capacity and economic
         circumstances. In particular, they allow workers to bounce back
from the impact of restructuring, thereby
         avoiding bouts of poverty.

         Asset accumulation is also vital for the long term poor. One of
the mistakes of the welfare state has
         been to under-estimate the capacity of disadvantaged people to
save. Programs overseas, for instance,
         have shown that the poor can save and invest, once they receive
the right kind of incentives. This
         process, in turn, creates spin-off benefits in terms of
self-esteem, health care and career prospects.

         The only way to leave poverty on a permanent basis is to save
and accumulate assets, whether in the
         form of financial, education or social resources. Incredibly,
the welfare state has emphasised recurrent
         income transfers rather than assets. Rich people, of course,
have no problem with the question of asset
         accumulation. Family inheritances pass on the benefits of
financial capital and a good education from
         one generation to the next. The welfare state needs to provide
a similar set of opportunities for the
         poor.

         In the past, public policy has encouraged a limited range of
financial assets, such as home ownership
         and superannuation. These schemes, however, have been available
to everyone bar the poor. It
         seems surreal that the Left has tolerated such a massive
inequity. It has been happy to pay income
         support to the underclass and asset support to the middle
class. Indeed, means tested payments have
         actively discouraged asset accumulation: if welfare recipients
save more than a small amount they
         become ineligible for income support.

         Not surprisingly, these arrangements have made the poor welfare
dependant and the rich asset
         dependant. Inequality has been institutionalised in our
society. The true Left-wing policy is to give
         low-income earners equal access to asset support. The best type
of welfare safety net is a trampoline.

         The new role for government is to facilitate asset accumulation
among the victims of poverty and
         economic insecurity. It needs to develop a stakeholder welfare
state, in which all citizens have access
         to various forms of capital. Each of its welfare programs needs
to include an assets strategy for the
         disadvantaged. In summary, stakeholder welfare aims to:

         - Disperse the ownership of economic assets, especially through
participation on the stock market. The
         Federal Government, for instance, should introduce a First
Shareowners Scheme to strengthen
         Australia's credentials as a share-owning democracy, especially
among low-income groups.

         - Establish a network of welfare savings accounts, with strong
incentives for poor people to put money
         aside and accumulate assets. The accounts would be available
for a range of purposes, such as
         education, home ownership and equity investment.

         - Create a highly skilled and capable population. This means
ensuring that people have access to a
         bank of resources from which they can meet the costs of
lifelong learning. A proposal for Lifelong
         Learning Accounts is set out in my book, What Did You Learn
Today?

         - Develop new and innovative ways of creating social capital in
disadvantaged communities. This
         means creating an alternative welfare system based on social
entrepreneurs and social venture capital.



         Conclusion

         The NSW Premier, Bob Carr, often expresses the pessimistic view
that there are no new ideas in
         politics, no new answers to the social problems of our time. If
one's search for new ideas is limited to
         the traditional sources of political information - such as
parliamentary debates, bureaucratic
         recommendations and university research - then Carr is right.
The well of innovative thinking has run
         dry.

         This is why welfare reformers need to look beyond the
conventional wisdom. They need to examine
         the evidence, learning from the work of social practitioners.
The new frontier of progressive politics is
         being forged within disadvantaged communities. Places like
Claymore and Cape York are learning by
         doing.

         In these settings, politics is full of new ideas. The challenge
for policy makers is to hook into these
         networks of innovation and practical reform. Politicians need
to break their addiction to machine
         politics and rediscover poor neighbourhoods. Bureaucrats need
to get out of their CBD offices and start
         talking to social entrepreneurs. In both cases, they need to
take an evidence-based approach to
         welfare policy.

         The myths of the welfare state are based on old ideological
ways of thinking. In reality, the world has
         moved on. The Information Age is demanding cross-sectoral and
multi-disciplinary solutions. It is
         rewarding organisations that place a premium on collaboration
and networking. We have entered an
         era of boundary crossing.

         This is not some new theory or abstract piece of social
engineering. It is grounded in social practice.
         People do not live their lives in neat ideological boxes. They
do not sit around trying to wind back the
         growth of the welfare state; nor do they spend their time
working out new ways of regulating the
         economy.

         Rather, they adopt a problem-solving approach. This means
taking the best of both sides of politics -
         the values of the Left as well as the Right - and applying them
to our toughest social issues. The old
         ideologies are insufficient to deal with the modern challenges
of poverty. A new synthesis is required.

         The concept of social entrepreneurship, for instance, draws on
the best of Left-wing politics - the
         ideals of cooperation and compassion - plus the best of
Right-wing politics - an ethos of enterprise
         and risk-taking. Likewise, social venture capital crosses
traditional political boundaries, mobilising
         additional resources for poor areas while also embracing the
realities of private sector investment.

         The other proposals in this paper rely on a similar process. In
the past, the Left has stressed the
         importance of mutuality and social cohesion while the Right has
emphasised the values of social
         responsibility. Mutual responsibility brings these two ideals
together. So too, the Right has argued for
         savings and asset accumulation while the Left has pursued the
redistribution of economic resources.
         Asset-based welfare bridges these two concepts.

         On the evidence, the things that I have seen and learned in my
electorate, these reforms are
         all-important. They offer society its best chance of winning
the war against poverty. They demonstrate
         the means by which we can make welfare work.

         At one level, however, this is what makes Australian politics
so frustrating. The know-how is available to
         solve our worst social problems. But the political system is
only interested in ideological boundaries
         and the point scoring this evokes. It is the equivalent of
play-acting, as each side makes its set-piece
         criticisms of the other. In its final form, this is how the
myths of the welfare state are perpetuated. It is
         more about the comfort of the political system than addressing
the discomfort of the poor.


         Social Entrepreneurial Stories


         Brian Murnane and the Claymore Miracle

         Sometimes miracles do happen. Six years ago Proctor Way in the
Campbelltown suburb of
         Claymore was known as the worst street in NSW. It had a record
of 60 police incidents a month or
         two a day.

         The street was full of vandalism, family disputes and despair.
Things were so bad that the State
         Government could not pay people to move into the public
housing. The low ebb came in late 1995
         when two tragic fires turned the townhouses into infernos,
killing five people.

         Today Proctor Way and much of Claymore have been transformed.
It is now possible to talk about
         a functioning community. The neighbourhood still has high
unemployment and the odd incident but
         generally, it has regained a sense of normality.

         People no longer live in fear in their homes, wondering if
their next-door neighbour has been
         doing the break-ins. Instead, they share a community life with
some important projects underway.
         There is now a 12 month waiting list for new residents. This
has been the Claymore miracle, a
         wonderful example of social reconstruction. How did it happen
and what are the lessons for
         policy makers?

         The first lesson comes from the decision of the NSW Department
of Housing to leave the area. In
         1996 it handed over part of Claymore to the Argyle Community
Housing Association, a division of
         St Vincent de Paul. The residents had grown distrustful of the
Department. It was seen as distant,
         cold and bureaucratic - more interested in making rules than
helping people.

         By contrast, Argyle established its office in Proctor Way
itself, right next to where one of the
         burned-out townhouses had been. From the very beginning, it
confirmed its community
         credentials. Argyle saw the problems in Claymore as social, not
just economic. The housing
         manager, Brian Murnane, was determined to establish
relationships of trust and cooperation
         between the residents.

         He started with small things, such as a community barbecue and
clean-up days, and then moved
         on to bigger projects, such as a Neighbourhood Watch scheme.
This burst of energy and effort
         created an enthusiasm for doing things together. As Murnane
describes it "everytime someone
         said let's do something, we backed them."

         In particular, the Pacific Islander residents led the
development of a thriving community garden
         on a large slab of disused public land. This became a focal
point of achievement, as the residents
         crossed their different cultural boundaries and learnt from
each other.

         Having normalised the social environment, Murnane then moved on
to the development of skills
         and economic activity. He set up a small business to meet
Claymore's housing maintenance and
         lawn moving needs. A low-interest loan scheme was also
established, managed by the residents
         themselves. This has been an important source of financial
education and participation. It has
         functioned like a micro-credit scheme, with a default rate of
just one per cent.

         These enterprises have established new skills and employment
opportunities in Claymore.
         Murnane now wants to take another step forward. He wants to
take over the run-down
         neighbourhood shopping centre for the development of business
ventures, cooperatives and
         training programs. This is where social venture capital has a
role to play, exposing the capital
         markets to new investment opportunities in poor neighbourhoods.


         Brian Murnane has fulfilled the role of a community broker -
building new partnerships between
         people, while also giving them the confidence to develop their
skills and to take risks. This is
         such an important lesson. People do not live their lives
through committee meetings and minutes.
         They want to get things done in practical ways, creating new
relationships of trust and
         achievement.

         This is why social capital is so vital. It is a community's
immune system against social
         breakdown. No amount of government money or market economics
can reproduce these
         relationships. They rely on the work of people like Brian
Murnane and the development of
         community life.

         Six years ago, I doubted that anything could ever be done to
improve the situation in Claymore.
         Thankfully, this wonderful example of social entrepreneurship
has proved me wrong.


         Helen White and the Minto Hill Project

         Social entrepreneurs often emerge in unexpected ways and
places. Following the success of the
         Claymore project, the NSW Department of Housing decided to try
something similar in a section of
         the Minto estate (known as "the hill"). In October 1998 it
appointed one of its middle managers,
         Helen White, to run a new program called "intensive tenancy
management." Like Brian Murnane,
         she was located on-site and expected to work closely with the
local community.

         It took White several months to break down the residents'
suspicion of someone from the
         Department. Thereafter she moved down the social
entrepreneurial path: organising street BBQs
         and clean-ups; employing a handyman to fix the small but
significant things around the estate; and
         most of all, enabling people to do things for themselves. The
community now runs its own
         neighbourhood watch scheme, soup kitchen, vegetable gardens and
arts and crafts program.

         Perhaps the greatest success, however, has been the
establishment of a new business called
         Concept Cooperative. In late 1999 five women decided to
establish an enterprise that matched the
         skills of the local residents against the needs of the local
area. It now provides a range of house
         cleaning and renovating, gardening and rubbish removal
services. It also hopes to establish a
         youth employment and training program.

         As White sees it, "the community here is like a treasure chest.
We have uncovered valuable
         people previously hidden behind fences. Basically, they want
what everyone else wants. They
         want a happy home, a safe place for their children and they
want to be proud. The way the system
         was, people here had lost their self-esteem, but we're trying
to bring it back."

         As a result, Minto is an improved place. Public spaces that had
been dominated by graffiti and
         crime are now being used constructively. Relationships of
isolation and fear have been
         converted into a spirit of community and cooperation. For the
Housing Department, the numbers
         look good. Rental arrears are down by 47 percent while vacancy
rates have fallen by 50 percent.

         There are two important lessons from this project. The first
concerns the significance of people
         skills. Helen White is a strikingly enthusiastic and
inspirational person. When I first met her in
         1999 she said that she "couldn't sleep at night for thinking
about new ideas for Minto."

         White runs a people business. Her sole asset is social capital.
She has a distinctive way of
         bringing out the best in others. Without the right kind of
character and commitment, there can be
         no such thing as social entrepreneurship.

         The second lesson concerns the limitations of public
administration. While, to be certain, social
         entrepreneurs are available within the ranks of government,
they are not necessarily suited to the
         methods of government. White has not had the same freedom and
success as Brian Murnane in
         crossing institutional boundaries. At the end of the day, she
is a government employee, somewhat
         restricted by the departmental rulebook.

         This has limited the capacity of the Hill Project to form
partnerships. It is still part of the housing
         silo, disconnected from education and health services and most
importantly, new sources of
         corporate investment. Other than the Concept Cooperative
enterprise, it has not been possible to
         generate new employment and training opportunities.

         Within its current management structure, it is difficult to see
how the project can convert its
         social capital gains into financial capital. It needs an
alternative source of funding to create a
         wider range of business ventures. It would benefit
substantially from access to social venture
         capital. If social entrepreneurs are to succeed within the
public sector, they require a high level of
         risk-taking autonomy, both in their social work and economic
partnerships.

         The Minto experience has convinced me that this is not likely.
While the project has made some
         important gains, it remains a second-best model. The best and
most enduring solution to poverty
         lies in the creation of an alternative welfare state.


         Vicki Meadows and Families in Partnership

         The greatest challenge for any parent is to raise a
developmentally delayed child. A group of
         working class parents in Campbelltown has met this challenge
with an inspiring program of
         social entrepreneurship. Not content with placing their
children in institutionalised care, they have
         tried to build the provision of services around the needs of
their families. Through a powerful
         combination of innovation, social capital and sheer tenacity,
they have achieved a remarkable
         amount of progress.

         The Families in Partnership story starts in 1994 when two
parents, Vicki Meadows and Mandy
         Shepherd, decided to do something positive about the needs of
their developmentally delayed
         infants. They wanted their children to stay in a normal family
network, rather than experience the
         isolation of child care. It was important for the children to
keep developing and learning from
         regular contact with their brothers and sisters.

         Instead of doing things the conventional way, by turning
instinctively to a government department,
         Vicky and Mandy took their own initiative. They joined a new
group called Families First,
         organised by the Kindergarten Union and experts at Macquarie
University. This innovative
         service operated under an integrated model of family support
and sibling learning. Vicki and
         Mandy urged other parents to join, generating the enthusiasm
for an additional playgroup and
         substantial fundraising. They also set up a support network
among the parents to help each other
         with the stress and trauma of raising their children.

         Initially Families First was located in an old shed at the rear
of an existing childcare centre in
         Campbelltown. It made good use of a disused community asset. By
1995, however, it had become
         so successful that it qualified for Federal funding to
construct a purpose-built facility. This was
         opened in 1997, further increasing the size and scope of the
service. The results for the children
         have been outstanding, with an improved level of development
and regular family contact.

         The success of Families First gave Vicki Meadows the confidence
to play an even stronger
         leadership role. In 1998 she established a new group called
Families in Partnership. It took on an
         ambitious agenda for families with disabilities, mobilising
resources from across the health,
         university and community sectors. It achievements include:

         - The Kids Club, which uses sporting activities to integrate
children with disabilities into the
         community;

         - Project Play, a buddy system which links disabled and
non-disabled school children in the
         development of play and social skills; and

         - Advocacy Skills for Parents, a program run through the
University of Western Sydney that
         teaches parents the lobbying skills they need to secure a
better deal for their children.

         As the children have grown older, Families in Partnership has
shifted its focus towards
         school-related issues. The parents have grown disillusioned
with the structure of special
         education. In particular, they want a higher level of
innovation and service integration than the
         government school system is willing to provide. As one parent
(the mother of eight year old
         Jimmy, who has a moderate intellectual delay) puts it:

         On one occasion I found out about a new literacy workshop and
paid for one of the teachers to
         attend it after-hours. When the principal found out about it he
summoned me to the school and
         castigated me for my 'unethical behaviour'. Am I meant to
apologise for trying to get a decent
         education for my child? ... Jimmy's programs are delivered in
professional boxes. For example, I
         would take Jimmy to occupational therapy (OT) and speech
therapy (ST) at private providers
         external to the school. He would then return to the school
where the teachers had no knowledge
         of what he had learned at OT and ST. The result is that the
development of my boy suffers. Why
         can't we put all the services in the one place?

         Families in Partnership is not willing to tolerate the failings
of the education bureaucracy. It has
         applied to the NSW Government for the establishment of a
community or charter school. Instead of
         running special education out of a large department in the
centre of Sydney, the parents want to
         run their own school, in collaboration with teachers, community
representatives and the
         Campbelltown campus of UWS.

         Internationally, the evidence shows that schools achieve their
strongest results when they
         maximise the involvement of parents. This approach is doubly
beneficial in special education. It
         allows the integration of school and home-based programs across
a number of disciplines. The
         community school plans to provide a range of education, health
and family services, with funding
         bundled together from three State departments. The school will
also draw on the expertise of the
         early childhood teaching and research programs at UWS. It has
the potential to be a national
         centre of excellence in special education.

         From small beginnings, Families in Partnership has grown into a
dynamic leader in the
         disabilities sector. The parents are acting on their
well-formed and innovative views about the
         needs of their children. Most of all, they want to be treated
as equals in their contact with health
         professionals, academics and bureaucrats. They are not
interested in the language of consultation
         - they want real and lasting partnerships. When social
entrepreneurship empowers parents in this
         fashion, it is an incredibly impressive force for social
justice.

         As Peter Botsman has written, "there are no tougher problems
than the ones these families face.
         Already they have achieved things that an army of bureaucrats,
governments and professionals
         would not have even contemplated. Vicki Meadows and her network
inspire people to work for
         them to build something better out of one-off payments,
uncoordinated area spending and
         paternalistic expert advice. Partnership and direct involvement
in the funding, management and
         delivery of services for their children and families is the
lesson they give us."

         Mark Latham MP is Federal Member for Werriwa, New South Wales,
Australia and Editor, with
         Peter Botsman, of "The Enabling State", Pluto Press Australia,
2001.


Michael Keaney
Mercuria Business School
Martinlaaksontie 36
01620 Vantaa
Finland

michael.keaney@xxxxxx