Voluntary sector is vitally important for economic growth

Andrew Hodgson

At a recent LEP Employment and Skills Board meeting, the importance of the third sector to our sustainable economic growth was again brought home to me.

Board member Carol Botten, deputy chief executive of VONNE, reinforced how voluntary organisations are changing, adapting to a world where business acumen is a priority as grant funding becomes scarce.

More of their income is derived from delivering contracts and services with an emphasis on being commercially focused and sustainable to ensure future viability.

Carol played a leading role in refreshing the employability and social inclusion section of our new Strategic Economic Plan (SEP), to better recognise the job and wealth creation value of our third sector to the North East economy.

Voluntary organisations often reach out to those people deemed by some to be ‘unemployable’.

Using their care and expertise, they are helping the North East LEP and its other partners implement the SEP’s employability and social inclusion agenda on the ground.

Strengthening our employment rate is crucial to sustainable economic growth, and for those on the margins of society, finding meaningful employment is a fundamental route out of poverty and exclusion.

Newly released Third Sector Trends Data for 2017 underlines the economic importance of voluntary organisations and their activity. Figures show there are 7,000 formal voluntary groups based in our region.

They employ 37,500 full-time equivalent employees. Across the whole of the North of England, the third sector is a larger employer than the finance and insurance industry.

Its value to the North East economy through salaries is estimated at £750m.

A growing number of third sector organisations are experiencing rapid growth, such as Changing Lives in Gateshead.

Back in 2006 it was a North East focused employer of 84 people with a £2.2m turnover.

Fast forward just over a decade and it works with disadvantaged people from the Midlands to Berwick, with 465 staff on its books and a turnover of £16.3m.

As my fellow board member Paul Varley tells me, profit is no longer a dirty word in the third sector.

Paul is chair of Northern Rights, an acclaimed social enterprise managed by local people helping the disadvantaged find work.

Taking surplus profits and investing them into doing even more good through the core services they deliver well, means charities reach more people who need their help.

The North East LEP and its partners have set the region the bold target of creating 100,000 more and better jobs over the next seven years.

In doing so, we recognise the growing contribution of organisations such as the Tyne Gateway Trust, its sharp business acumen creating the revenue to be able to invest into the business and grow.

Pauline Wonders, the trust’s strategic director, and her team work with the long-term unemployed, people whose self-confidence has been shattered to the point where some don’t consider themselves worthy of work.

Her team of 24 staff – all of whom were previously unemployed themselves – connect with people, nurture their self-esteem and give them the tools to start their own community enterprises or support them into sustained work.

Inspiring, important activity with real economic value.

Andrew Hodgson,

North East LEP Chair.