I will read the note on privilege and housekeeping matters before we begin. Witnesses and members are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable, or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such directions I might make.

Members attending remotely are reminded of the constitutional requirement that to participate in public meetings, they must be physically present within the confines of the Leinster House complex. This is due to the constitutional requirement that to participate in public meetings, members must be physically present within the confines or place where Parliament has chosen to sit. In this regard, I ask members participating via Microsoft Teams to confirm they are on the grounds of the Leinster House complex if they wish to contribute to the meeting. I remind all those in attendance to make sure their mobile phones are switched off or in silent mode.

The subject of today's meeting is the social enterprise sector in Ireland. It is a growing sector of the economy and contributes significantly through employment and the social and environmental dividends that often accrue. Moreover, the sector is distinct in that profits generated are reinvested in the supporting enterprises and projects that directly support communities. We look forward to engaging and gaining further insights on the key issues relating to the social enterprise sector today. I welcome Mr. John Logue, CEO of Social Enterprise Republic of Ireland, SERI, and Mr. Richard Bruton, chairperson of SERI. I invite Mr. Logue to make his opening remarks.

Táim buíoch as an gcuireadh seo. I am CEO of SERI. I am joined by our chairperson, Mr. Richard Bruton. We are glad to be here and we want to make the most of the members' time.

I would like to start by asking each member to think about his or her local community. He or she should picture himself or herself walking through it this morning. The community centre is already open, hosting fitness classes, support groups and training courses. Around the corner, a day centre is welcoming older residents for a warm meal and some company. You pass a community childcare facility, parents dropping off children at prices they can actually afford. There is a community café where a person with an intellectual disability is gaining valuable work experience. There is a credit union, an enterprise hub and a community radio station. That is the present reality in most of our communities. I refer to communities sustained, in large part, by these social enterprises. In every single constituency represented by this joint committee, social enterprises are playing their part.

Ireland's 4,355 social enterprises employ 84,382 people, which is 3.7% of the national workforce. They stepped in during the Covid pandemic, providing meals and befriending services. They responded after Storm Éowyn, providing shelter and a place to work. They deliver services in disability care, rural development, childcare, labour market activation and the circular economy. In short, they find imaginative solutions for social needs while generating revenue to minimise their co-funding needs. As the National Economic and Social Council concluded, they are essential infrastructure for Irish society.

The reason social enterprises exist in the first place is not because someone decided it would be a profitable way to do business; it is that markets have already failed to provide these services profitably. Community centres, meals on wheels, supported employment and affordable childcare in disadvantaged areas are not sectors where a private operator is quietly waiting in the wings. The market looked at these communities and these needs and walked away. Social enterprises stepped in. That is the starting point for everything. It is the lens through which current policy has to be re-examined because, right now, the State is asking social enterprises to solve problems that the market has already failed to solve, using the same market mechanisms that produced that failure. It is asking them to be financially self-sustaining in areas where financial self-sustainability is, by definition, not possible.

The consequences are entirely predictable. Only 48.5% of social enterprise income comes from trading. Some 56% of organisations do not have sufficient reserves to handle an unexpected financial shock next year. These are not signs of poor management; they are the inevitable arithmetic of operating in market-failure areas. Unlike a private business, a social enterprise cannot respond to financial pressure by raising prices because its customers are of the very communities that cannot afford higher prices. The cost squeeze is real, and it has nowhere to go.

To further compound matters, the State supports to ensure financial sustainability are wholly inadequate. The social inclusion and community activation programme, SICAP, is supposed to be the primary support for start-up social enterprises. Just 1.5% of social enterprises access SICAP funding every year, with an average award of just €1,284. To put it another way, for every €1,000 spent on SICAP, only €2.17 goes to social enterprises.

The State’s main support for operational costs, Pobal’s community services programme, CSP, is accessible to only 10% of the sector, insufficiently funded for current recipients and structured as a labour activation scheme rather than a co-funding model for social enterprises. Finally, social enterprises are largely shut out of enterprise supports such as local enterprise offices, LEOs, Enterprise Ireland and Skillnet.

Current Government policy assumes that piecemeal, project-based grants will resolve the sector’s sustainability challenges. This is only valid for a subset of the sector. For services rooted in market failure, this assumption does not hold.

What SERI is calling for is not a bailout and it is not charity. It is a long-term relationship between the State and the social enterprise sector, one that is honest about the economic reality in which these organisations operate. That relationship rests on three objectives. The first is trading maximisation. Support social enterprises to build their capacity to become robust enterprises where it is genuinely possible, provide innovation procurement pathways and set up a national procurement directory. Give social enterprises every tool available to grow earned income and remove the structural barriers that block them from mainstream enterprise support.

Second, address the cost pressures that are eroding the sector and take a proportionate approach to financial reporting and audit requirements. Small social enterprises should not be spending €7,000 annually on audit fees. Introduce a targeted PRSI rebate for lower earning social enterprise workers and offer a seat at the cost of business advisory forum. These are practical measures that would have an immediate impact.

Third, provide real co-funding for services where market failure persists. The CSP already functions, in practice, as a partial co-funding model but it has been extremely limited to new entrants and underfunded for existing recipients, and was designed as a labour market activation programme. We need to reposition and expand it as the State's central co-funding mechanism for social enterprises delivering on Government priorities. The OECD recommended a similar approach in 2023: direct investment, longer term financing, stability before scale.

Our pre-budget submission, which we have provided to the committee, sets out seven costed measures totalling €7.58 million. Every one of them aligns with ambitions that the Government has outlined in the programme for Government, the national social enterprise policy and the impending national public procurement strategy. This pre-budget submission represents the first step in what we are calling the social enterprise new deal. The social enterprise new deal asks the State to support social enterprises to maximise trading income where possible, while recognising that market failure necessitates sustained State co-funding and cost relief to ensure viability.

Here is the bottom line. If social enterprises fail, the State does not eliminate the need. It assumes it, almost always at greater fiscal cost and with far less community impact. The value of this sector is most visible when it is gone.

This committee has real influence over the Department of Rural and Community Development and the Gaeltacht and over the budgetary decisions that will determine what happens next. We look forward to members' questions and to a genuine, long-term partnership that reflects what social enterprises are: not optional, not peripheral, but the social and economic infrastructure of communities across Ireland. Go raibh míle maith agaibh.

I thank the committee. It is great to see some older faces I know well and many new ones. I came to understand the value of social enterprise when I was doing work on rural renewal, positive ageing and the circular economy. I discovered that there were enterprises that would go places public services could not go and the private sector would not go. That is where the potential of the sector lies. There are many needs that cannot be resolved by a top-down public service but social enterprises with their roots in the community can deliver huge impact. We hope to expand the sector. There are many extraordinarily creative people in the sector but they are often playing into a gale in terms of keeping their enterprises afloat. It is a win-win for the State if we can work out a framework. At the moment, social enterprises fall between two stools. They are not eligible for small business supports and the State's frameworks do not fit the model they are trying to operate. There is the potential to work out something more creative.

I thank Mr. Logue and Mr. Bruton. I will now invite members to contribute. I remind members participating remotely to use the raise hand feature and to cancel it when they have spoken. We will allow seven minutes for questions and answers and I will take members in the order that hands go up. First up is Deputy Guirke.

I thank Mr. Logue. It is good to see Mr. Bruton again and I think him for coming in. I agree with a lot of the presentation. We all know the market looked at these community needs and walked away. Social enterprises had to step in. Mr. Logue said, "Some 56% of organisations do not have sufficient reserves to handle an unexpected financial shock next year." I know he cannot name them all out, but are we talking about organisations like meals on wheels? Will Mr. Logue give us a rundown on that?

The pre-budget submission included the figure of €7.5 million, which does not seem like a lot of money for social enterprises across the country. Mr. Logue said that the bottom line was that, if social enterprises failed, the State did not eliminate the need, but assumed it. It is always at a greater cost because nobody will do the work as cheaply as those enterprises can.

Mr. Logue mentioned audit fees. It seems crazy that some of these organisations pay €7,000 per year in audit fees.

Have the witnesses any idea how many people with disabilities are employed in Ireland by social enterprises? How will the next phase of the national strategy address disparities between urban and rural enterprises?

On the 56% of social enterprises that cannot handle an unexpected shock over the next 12 months, that figure comes from SERI's annual members survey. Those members are from all walks of social enterprise life. That could be a community centre, a labour market activation programme, a disability-focused organisation or meals on wheels. It is representative of the entire sector.

On the audit front, this is an unusual challenge in that it has a very simple fix but we think there is not the political will to fix it. Right now, a CSP-funded social enterprise is required to have a full set of audited accounts every year. That costs about €7,000. When we were getting pressure from social enterprises saying they could not continue to bear the cost, we spoke to a group of auditors to ask if we could do a national group scheme. I got laughed out of the room. They said I not only would not get a national group scheme with a discount, but that they were trying to get out of the sector. So complex are the governance, compliance and reporting mechanisms that they would prefer to charge way more or else get out. That is the challenge. It is not only the price but also the fact it will be increasingly difficult to get auditors willing to take on the level of work.

Circular 13/2014 specifically gives the power to the Secretary General in the Department of Rural and Community Development and the Gaeltacht to address that issue. That person can, with the stroke of a pen, decide audited accounts are no longer needed and that a signed set of accounts by two directors of the organisation will be sufficient. That would keep it in line with the Charities Act, where organisations with annual incomes under €250,000 do not have to file full annual audited accounts. A set of abridged financial statements is fine. Keep it consistent with the rules of the Charities Regulator around the €250,000 threshold. That would free up, in real terms, €7,000 in every CSP-funded organisation with an annual income under €250,000. It is a simple measure that would be useful.

I will come back to the Deputy with the figures on disability. There are figures and I will share those with him.

The last question related to the 60% figure. Will the Deputy remind me of it?

It was about a national strategy to address disparities between urban and rural enterprises.

A major issue is financial sustainability. The median income of social enterprises in Ireland is about €180,000, while the median income of a rural social enterprise is €80,000. I always use the example of a rural community centre. Government policy suggests that business, as a social enterprise, should wash its own face. If a rural community centre has a catchment of 400 people, how do you make it wash its face? If that organisation got to a trading income of 40% of its total financial need, that would be a remarkable achievement in many cases. The State co-funding that or finding alternative income sources for it is a good way of doing business because it prevents the alternative. But for that community centre, what would be the true cost to the State?

Investing in social enterprises in rural areas is a really good way of addressing that disparity.

How best can we help as a committee on the budget? What is the best thing we can do here?

There are lots of positive measures happening in the sector that I want to acknowledge. There is lots of funding for capital investment, the CSP, etc., but none gets to the root of the issue, which is that social enterprises operate in areas of market failure. The logical conclusion is that they can never be self-sustaining by their trading alone. If that is the case, I would like the State to acknowledge that we need to help to maximise their trading income. The inevitable conclusion of that is to give them access to local enterprise offices, Enterprise Ireland, Skillnet, etc. Give them the capacity to trade and reduce their cost base where we can. Circular 13/2014 is an obvious example. Where market failure persists and they cannot become self-sustaining through those two measures alone, there should be co-funding. The analogy I would use is the post office model. We all acknowledge that rural post offices offer a societal good and that, given the insufficient demand in those areas, we need to help them maximise their trading incomes, diversify what they do, help them with their costs and co-fund those organisations. In 2022 and again in 2026, the State stepped in to support post offices. This is the same model. If we started thinking about supports that the Department of Rural and Community Development and the Gaeltacht and the Government offer through the lens of market failure, we see we are actually doing lots of things that do not tackle the structural problem.

I thank Mr. Logue. I look forward to working with Social Enterprise Republic of Ireland.

I thank both witnesses for coming in today. It is great to see them. I thank them for their presentation. This is a really important area. The witnesses will have to forgive me; I am going to ask a few questions just to get my head around some of this.

I think the core point that there are market failures in our society and that social enterprises have to step in to provide those services to communities is well made. We see it all across our constituencies. It is critical that those organisations are able to do that. The post office model is an excellent example.

I am trying to wrap my head around categorising different organisations. Obviously, there is private enterprise and there are State organisations, and we know all about that, and there are charities dependent predominantly on State funding but that would not necessarily be their only source of funding because they might trade in some form. Will Mr. Logue give a sense of how he would define the social enterprise with respect to the charitable or non-profit sector? As tactical as he can get, will he provide examples of specific organisations? It would be really helpful.

I am going to confuse before, I hope, addressing the question.

Please do. We do it all the time.

Social enterprises can be charities. The key difference is what we call the "PASTA" test. If it passes the pasta test, it is by definition a social enterprise under the trading for impact national social enterprise policy. It is an acronym of five core criteria. "P" is for purpose. The purpose of the organisation has to be social rather than a profit motive. That is usually baked into the constitution or the founding documents of the organisation. "A" is for assets. The assets of the organisation have to be locked, which is to say that if that organisation ever dissolves, those assets do not go to the directors, who are voluntary in nature. They go to a similar community organisation with a similar purpose, so there is no private gain. "S" is for surplus. The majority of the surpluses are reinvested in the social mission. In an Irish context, it is pretty much guaranteed that all of the surpluses are reinvested because 77% of the sector is companies limited by guarantee. That is the model. "T" is for "trading", which is the bit that differentiates it from the pure charity model. Social enterprises sell products and services. That could include contracts for service or things like printing. That is how they make at least a portion of their money although some social enterprises are fully self-sustaining through a trading model. Third Space cafe in Smithfield does not receive any State funding, probably because it is a very well-run business, which is fair enough, but there is also a huge total addressable market in its local area. That is probably why; most cannot get to full self-sustaining. "A" for accountability is the last letter. A social enterprise is accountable to a set of stakeholders, whether a voluntary board of directors or its beneficiaries. It reports transparently on its impact.

The trading element is what differentiates the two. There might be a charitable organisation that has no trading income per se and relies totally on public donations, philanthropy, grants, etc., and a social enterprise has all of that and some trading element as well. That would be defined as "social enterprise", provided it met that criteria

That is extremely helpful. I had my third date with my current partner in the Third Space cafe in Smithfield, so it is close to my heart. That goes to a great point that some might be totally fine, they might have a large addressable market and be financially solvent, for lack of a better term, whereas some struggle. In rural areas, there might be significant need for people with disabilities, pensioners and people who are isolated in some ways from society where these social enterprises really have to step in. What does that breakdown look like? Where are the acute needs for social enterprises for the kind of financial supports that Social Enterprise Republic of Ireland will be looking for in this budget?

There are aspects of the sector that are supported in some way. There are 434 social enterprises that are CSP supported. Childcare facilities make up about 26% of the total sector; they tend to have core funding via the Department of children. What tends to be missing is those that are neither CSP nor childcare related. This is not specifically the answer the Deputy was looking for but that can be across a very broad range of impact areas. It is everything from work integration and labour market activation support to disability, community facilities, tourism, heritage and local festivals. For all of those organisations, the private sector and the State did not go there, so a voluntary board of directors got together and said they would. They have done their best to in some way trade their way to self-sustainability, but then there is a gap and that is the challenge. It is most acute in rural areas where there is not the population base to sustain what they do but that does not mean it is not in urban areas as well. We see some serious need in urban areas.

The great suggestions Mr. Logue laid out were getting rid of audit costs and a PRSI tax credit or something along those lines. What do the revenue structural barriers Mr. Logue referred to in his opening remarks look like? What is the role of local authorities? Is it something Mr. Logue wants to see from central government in terms of funding or should something happen through a local authority model in partnership with local community organisations and social enterprises?

Triest Press is a social enterprise printing company based in Roscommon but its job is to provide employment for people with intellectual disabilities. Let us say that Triest Press wants to increase business and improve its trading income. Where does it go? It can turn to SICAP though its local development company as a first step. SICAP has virtually no funding available for social enterprises to expand their services. Only 1.5% of the sector annually gets access to SICAP funding, with an average award of €1,284. That is not going to help Triest Press to improve its trading income, so that is probably a non-runner. It could go to the local enterprise office, but local enterprise offices are incredibly inconsistent across the country in how they support social enterprises. The very same organisation, a carbon copy, could go in to Roscommon and Donegal LEOs and get two different answers as to whether it is eligible. That rests fundamentally on loose interpretations of the guidelines. Some 48% are knocked out because of their legal structures. One might say a company limited by guarantee or a charity is not legible but the other more interesting area is that the LEO says the enterprise is not commercially viable because there is some grant income or contracts for service with the State in its income mix. That says to me that LEOs do not understand the social enterprise business model. That is an inevitable part of the income mix; only 48.5% of social enterprise income comes from trading and selling things. The rest comes from other areas. If we built awareness and got some Government support to say this was the model and commercial viability for social enterprises would be treated slightly differently than for a commercial entity, that would be a real help. To be fair, the LEO centre of excellence has been very supportive of what we are trying to do. I think the issue now is that there is some bottom-up resistance form LEOs locally that say they do not want the floodgates to open and their already scarce resources to be further constrained. It would be helpful if the Department of enterprise, which I know is not the purview of this committee, supported that from the top down.

I thank our witnesses for being with us this morning and for the really important information they have provided. I am very familiar with social enterprises and am a big fan of them. My questions relate to the capacity to scale up, whether that exists at the moment and what can be done to foster it. Childcare is a major issue. While it is a small subset of the broader figure, between 2023 and 2025, the unemployment rate doubled for women in the 35 to 44 age category. It is still a small amount, but some of that is attributable to the fact that women cannot access childcare. For reasons we will not go into or solve at this committee, it always falls on the woman to do that. She is out of the workforce. I know this from practical experience in my constituency and from my own family. It is a real concern. What can reasonably be done in the context of targeting? What the witnesses are telling us is very broad in nature. My instinct tells me that the State is not able to conceive of that on many levels. For certain projects and with a bit of focus, it certainly could be done, however.

We all recognise that childcare is a social good and a good thing in general. Whether a parent is working or not, it is still good to have socialisation for our kids. How quickly could the community childcare sector be scaled up and what would be the best way to do that? Would it be by means of a series of grants or a strategy? How would it be done? This is an area in which I would see huge potential. The witnesses might not agree with me, which is fine. Private providers tell us time and again that it is not viable. The staff who work in childcare deserve decent wages, but, equally, parents cannot be paying the equivalent of a mortgage for childcare. We know there are plans, albeit delayed. I am not trying to be massively political about it, but we are waiting for investment in childcare. When that comes, the bulk of it is going to go into companies that have a profit motive. That is fine - it is their model - but is there a better way to spend that investment in supporting social enterprise? How could it be done?

We could have two solutions in one here. We have community centres or community infrastructure that is underutilised, on the one hand, and we have the absence of childcare places, on the other. We worked with Deputy Kerrane, a colleague of Deputy O'Reilly's, on a policy that encouraged the State to, in the first instance, at least research the capacity of current community infrastructure to take on the role of local community childcare facilities. We contacted the Minister, Deputy Foley, to offer our support to do that. We did not hear back.

That is very disappointing.

The social enterprise sector and the community centres are there and willing to help. A slightly tangential example I would use is what happened during Covid, during Storm Éowyn and when the new communities from Ukraine came to Ireland. Social enterprises very quickly mobilised to provide support in those times. We can do the same in the context of other societal problems. The challenge is that nobody thinks about social enterprises when they tackle these societal challenges.

I have often said, and Mr. Bruton will not be unfamiliar with this, that where the State spends money, it should be pursuing decent services but also decent wages and conditions. It is entirely possible for the State to drive the social enterprise sector. The State is a big purchaser of those services. When we look at something like the hot school meals programme, it beggars belief that there is not a deeper partnership with social enterprise in delivering it. We all want kids to have a hot meal in school. That is a good thing. Universalism can be a very good and powerful tool. It is about directing that. Will it take a policy shift at the head of Government? Is it pilots that will move this? What will it take to move it? The State spends billions in pursuit of services that are very necessary, but there are people, forgive me for saying it, who are making out like bandits. They are making a fortune on the back of what the State is doing. We are not noticing any uptick in the services. I am thinking of home care services, the hot school meals programme and all of those things where large sums of money are being spent but it is not being used to drive decent jobs at a local level.

The answer I would say there is innovation procurement. What we could do via the Departments of public expenditure, rural and community development, Social Protection and children or whatever is confine a certain competition for certain State needs to social enterprises. If we have a problem, whether it is affordable school meals or quality school meals, more to the point, there are certainly social enterprises, including St. Munchin's community enterprise centre, Loaf Catering and Third Space, that all do good-quality catering.

The second and more important aspect is that social enterprises differ from the private in that they are willing to let others duplicate their models. If it works for St. Munchin's community enterprise centre in Limerick, they will tell the social enterprises in Clare, Donegal and Dublin how that worked, what the pitfalls are and how to do it. That is the model we will probably need in order to tackle societal challenges as opposed to trade secrets, intellectual property and the profit motive that says to keep all you get. It is about finding a workable solution and replicating it across the country as quickly as possible.

I absolutely agree that they talk, and sharing information is really important. Is there space for co-operatives within the social enterprise model? What could be done? We used to have the co-op development unit. When it was closed, it was not replaced with anything. There is a real demand for co-ops, not for everything, but small companies at local level delivering local services. Is there space for the co-operative model within the social enterprise model?

Sure. There are some co-operatives that are members of SERI and are social enterprises. Dublin Food Co-op would be a great example of one.

My husband used to chair it. I know it very well.

I did not know that, so that was serendipitous. Some of them do not meet the definition of social enterprise in the trading for impact policy, but that is not to say some of them are not social enterprises. The model is very much aligned with what the sector is trying to do, so the short answer to that is absolutely, we see them as part of the social enterprise model.

Thank you.

Mr. Logue and Mr. Bruton are most welcome. When they made the opening statement, I was reminded of stepping into a local community and realising all the great things that are happening from our community centres and local hubs. Without that element of volunteering and the investment the witnesses bring to it, there would be massive deficits. As a consequence of everything the social enterprise sector does and the investments it makes, communities are stronger, but there are some left behind. I am always reminded of how things mobilised when Covid came and, as was mentioned, when Storm Éowyn came. It is phenomenal what we and the State were able to do by way of response. We should not be waiting on a storm to be able to deliver on some of those services. If we take anything from the last event, Storm Éowyn, we should certainly have a model now that we would be able to embrace and use going forward. Some 84,382 people, or 3.7% of the national population, are employed by social enterprises and are doing an outstanding job.

SICAP was mentioned. In my previous job, I was a board member of Galway Rural Development. SICAP was one of the pillars in that. I am forever reminded of the constant financial battle there was for the people working within that space to be able to reach out and deliver to those who were seeking help.

I always felt it was a real insult to that organisation that it was not funded adequately to be able to do that.

Mr. Logue and Mr. Bruton's pre-budget ask is that €7.8 million be ring-fenced. This is not a loaded question but if Santa Claus were to deliver that, what additional changes could or would they be able to implement to be able to achieve real, positive change?

It is certainly the first step; I would admit that. I do not think €7.58 million changes an awful lot in the short term, but it says that the State is willing to properly diagnose the structural problem at the heart of this sector, and that gives us the foundational point to grow from there. If we say that we acknowledge these organisations are, to go back to Deputy Hayes's point, more like post offices than private businesses and that all our solutions are laser focused on that, it gives us a chance over the medium to long term to fundamentally address the structural issues in this sector so they can serve as this social infrastructure in communities across Ireland. That means more social impact and more people who are long-term unemployed or who have disabilities being employed in those organisations. It means better community-run infrastructure and social procurement opportunities being taken up. However, €7.58 million is a drop in the ocean. It is the first step in what we are calling the social enterprise new deal.

On SICAP, I totally agree with the Deputy on the role of the local development companies and the constraints that are placed on them. I used to work for a local development company administering SICAP, so I know first hand what that is like. The role of the social enterprise officer, or often the enterprise officer, in those communities is paramount because they are the relationship holder with all the social enterprises. The trust is with them. They have no agenda other than saying they are here to help, so social enterprise tends to be quite honest with people about the challenges they are facing because they are not dependent on them for their funding. The challenge is when the social enterprise officer goes to help an organisation and tries to identify what resources can they give beyond their time. The actions budget most local development companies have to support social enterprises is less than €10,000 for the entire catchment area. Fundamentally, that means there are no supports bar maybe some broad networking. If you have €10,000 to spend and a large catchment area of social enterprises, you are going to put on generic training supports to try to cover as many people as possible. That will not necessarily tackle the problem. We have got to either put resources in the hands of these local development companies to do more or turn to the enterprise ecosystem that already exists and say this is its responsibility. It is one or the other, although ideally both.

I got that. I can only reference what I was aware of in east Galway when it came to some of our migrants needing assistance. In that instance, the SICAP person was the person who had to offer supports. God knows there were many supports needed. However, they were doing that with the same budget, if you like, so all of a sudden that SICAP person was firefighting. As Mr. Logue rightly said, going there to offer help and having your hands tied behind your back financially is useless. That is really where the change needs to happen. If you want the system to work, you have to fund it appropriately. If you do not want it to work, leave it the way it is and it will fall.

I can only speak for myself, but, as a member of this committee, that €7.58 million is a very small ask. As Mr. Logue said, it would only be the start of how things can be improved. He and Mr. Bruton are pushing an open door with me, as a member of this committee, regarding that ask. It behoves us to ensure that the ask is met with a level of generosity from us.

Senator Rabbitte is next.

I apologise, I was doing a little bit of research before I asked the questions.

Can the Senator give us the title of the song?

On the research I was doing, I am a big fan of social enterprise. In the Department of disability, I saw, for the first time ever, that the disability participation and awareness fund, DPAF, was awarded. That started at €2.5 million, grew to €3.5 million and is now at €4.5 million annually, with 60 projects supported over the past few years. That goes to the nub of the matter. It is about inception of projects and getting things off the ground, and then talking about the sustainability of what is involved. I was just doing a little of research. From what I could see before I rudely interrupted everybody, DPAF at the moment allocates €4.5 million to Rethink Ireland. Some €1.75 million goes from the Department of Rural and Community Development and the Gaeltacht to AI projects in Cork with Google. The Limerick fund of €10.9 million has been created under the mayoral fund. Deloitte has come on board with €1.5 million for Pathways to Work. From what I could research, I discovered that €18.6 million is being spent on social enterprise to assist with governance and getting community projects off the ground in co-partnership between the community groups and various Departments. There are really good examples of where it has worked and where you need to just have the lever arch folder. The Together Academy for Down's syndrome has done such phenomenal work. It has partnered with the local ETB here in Dublin. I understand it is opening its third premises. That can be replicated around the country because it has developed a sustainable training and employment model. You look at Cafe Link at University Hospital Galway and you wonder why we are not thinking of doing more of those cafés in hospitals where we have both the training and the opportunity. There is the OWL programme going on here in Leinster House, and in Naas there is a level 3 hospital that provides training and employment within a very specific area. It takes on ten people every year.

Then you can look at the investment that has happened through the Department of Rural and Community Development, which is answerable to this committee. Since 2017, it has improved or impacted the lives of 141,000 people where it partnered with - and I might be wrong about this - the Tomar Trust. For that €4.65 million has come from a philanthropist and €4.2 million from government funding. Government has always been involved but maybe it needs to be a more structured involvement in the sustainability concept. I look at SCÉAL, which was a community café and shop that was opened in Lorrha-Rathcabbin last Sunday. That came from the Department of Rural and Community Development. The former Minister, Heather Humphreys, allocated funding for that. The community lost its shop and post office but they decided to use the community centre. That brings us to a point Deputy O’Reilly was getting into. That can work when you have a very small parish like Lorrha, with 700 people where it is probably the same people on the board of the community centre and in the group rallying to get a shop put back or a community café put in place. It is through that collegiality you can identify locations.

In the childcare sector it is a bit different. I look to Lawrencetown, which had the Le Chéile project where a community creche came in. It was able to improve over time. The people used to take out the equipment every single morning and put it back every evening. They could see that the numbers in the schools were going up and that there was a need for this childcare facility in order that people would not be travelling to Ballinasloe or Portumna to drop off their kids and could do it locally. Hence, the Department of children came on board and gave them capital funding to assist them, along with the LEADER project, to build what was required to meet their needs. I am saying there is a lot going on but there is not the joined-up piece on the sustainability of projects. That is what is missing.

Rethink Ireland has done phenomenal work in the context of the few projects I have mentioned.

Autism dogs is another one. Sailing into Wellness is another one. They have learned how to do their governance. They have learned what it takes to have a good team put in place. The next step is - it is really like the Local Link bus - to establish what the sustainable model is, what need should be put in place and how it is co-funded from the various Departments. We are doing the €7.58 million already and more, but is that €7.58 million to look at the more sustainable model of everything I am after mentioning? Deputy Gallagher said as well that he recognised that John was a very proud Donegal man. I make sure I said that before we go on.

I was very disappointed he did not say it before then.

He asked me to say it. I thank the witnesses.

That is a very astute observation. I always worry we sit here and look ungrateful because on paper there are lots of funds. There is everything from the local enhancement programme, the community centre investment fund, RRDF, Rethink Ireland, etc. We could name a list. The challenge is that most of them are capital related. That is the first thing. It is not difficult to get capital funding for a social enterprise. In fact, there are a myriad of sources from which you can do that. On the operating costs, the challenge is that a lot of what you can get is additionality. If you are a social enterprise in Galway and you are doing disability supports, what you actually need is your current model co-funded, but the funding landscape in Ireland says, "What else are you going to do for the bit of money that we are going to restrict to that additional thing you are going to do?" That does not help. It is like saying to post staff in the rural post office, "We know you are struggling financially to do what you already do. We are going to pay you to do something else and you can only use the money for that purpose." That to me says it is useful to try new things for social innovation, and I do not knock that for a second as that is useful, but it misdiagnoses the problem. It says that the current model is structurally flawed, there is a market failure and trading alone will not get us out of it. That is where the gap lies. The problem is it is not a very attractive thing to sell to philanthropists to say they will co-fund existing services, but it is probably the most useful thing they could do.

I thank the witnesses. I apologise that I was not here when Mr. Logue was making his statement but I have read it and have listened to Mr. Bruton. I will certainly be supporting the €7.58 million, but as everybody knows, there may be some questions we need to put forward to try to convince the Government to give the social enterprises the money. There is no point in just talking and coming in here looking for it if they do not get it, or only get €3 million. We are committed here as a committee. From what I have heard so far, we are all going to support the €7.58 million of an increase. I have a few questions to ask while we are making the case. Mr. Logue argues that many social enterprises can never be fully self-sustaining. How do we ensure that increased State co-funding does not create long-term dependency on public funding?

Arguably it could, and I am not here to say it would not.

That is grand. What specific outcomes should taxpayers expect in return for the €7.58 million, and how would success be measured?

It depends. There are a number of what are called social return on investment analyses done in this sector and there could be anything between every euro invested getting €1.50 back all the way up to a football co-operative in Limerick, which has a return on investment of €17 for every €1 spent. There is no easy answer to that question but-----

That just shows hows successful it can be.

-----it is to say that there obvious examples.

Mr. Logue states that the market failure justifies ongoing State support for certain social enterprises. How do we distinguish between genuine market failure and organisations that may simply need to adapt their business model?

That is why we have asked for trading maximisation as the first step. Trading maximisation says we should give social enterprise every tool we can to increase that 48.5% to wherever it can go to. No social enterprise wants to be dependent on grants and the State. They want their own trading income as a matter of fact. The problem is that if that only gets them so far, then there is a genuine need. Again, the analogy I will use is the rural post office model.

Yes. Only 48.5% of the sector income comes from trading. What is the realistic target for increasing trading income? What responsibility should the sector itself take in achieving that?

In Northern Ireland it is 68%, and it has enterprise supports. There is a realistic target.

That is fair enough. Mr. Logue mentioned enterprise supports. Are there examples where social enterprises have been denied enterprise supports despite meeting their criteria, or is the issue that the criteria are, we will say, unsuitable?

The issue is inconsistent interpretation of criteria. I can send the Deputy a long list. I do not want to name names here but there is a long list.

That is grand, but is there?

There is; 100%. To be fair to the LEO centre of excellence, we work with it on an ongoing basis to try to address issues as they arise. The problem is that there is a bottom-up resistance and perhaps a top-down lack of leadership from the Department of enterprise.

That is fair enough. How can we ensure any expansion of the community services programme delivers better value for money than direct State provision for those named services?

The social enterprise sector is run not only by 84,000 staff but also by 70,000 volunteers who are backing that up. Inevitably, what you get is a much more effective model but which is also locally grounded. You get a quality outcome that has buy-in from the local community but which also benefits from the expertise and the work of 70,000 volunteers.

Grand. Mr. Logue highlights financial pressure. If Government were to address those issues, what commitment could the sector make to reducing reliance on grant funding over time?

I think we could get to 65% if we had that support.

Very good. Mr. Logue argues that if social enterprises fail, the State will bear a greater cost. Will he provide an example of where the closure of social enterprise directly resulted in higher costs for the Exchequer?

Again, I could send the Deputy on three or four examples, which I will be happy to do.

I thank Mr. Logue. That is all I wanted to ask.

On my own behalf, I thank Mr. Logue and Mr. Bruton for their contributions today. I have a few questions. First, regarding the innovation procurement pathway that was mentioned, will Mr. Logue give a bit more detail on what he means by that? Also, on the national procurement directory, I think we had a discussion previously about Article 20 in the European procurement directive and that it is only one Department, namely, the Department of Social Protection, that opens that up to social enterprise. There are a number of contracts available through that, but could other Departments follow suit?

I will answer the second question first. This is massive. We talked about getting more self-sustainability into the sector. Here is the solution to that. The State spends about €22 billion annually. Very little of that goes into social enterprise, yet there are social enterprises throughout the country that are procurement-ready in areas like printing, catering, stationery, training, etc. Very few of those are accessing social procurement. Why? It is because public buyers tell us they cannot find social enterprises to buy from. They desire to do so but they cannot.

The second issue is that eTenders is obviously a clunky system at the best of times, both for the buyer and the supplier, particularly for time resource-poor social enterprises. What SERI has developed as a prototype model is an AI-powered social procurement platform called Sphere. It is free for public buyers and social enterprises to use. It focuses on below-threshold contracts, that is, contracts that do not need to be put on eTenders. If we crack below-threshold contracts alone, we would dramatically increase the amount of trading income that comes into the social enterprise sector. A total of 1% of that annual spend is more than five times the entire community services programme every single year. That is the model. We have to get social enterprises procurement ready, but we also have to make it as easy as possible for public buyers to access that.

Regarding the Deputy’s first question on innovation procurement pathways, an example of this might be the State having the challenge of finding employment opportunities for people with disabilities. It is within the existing rules for innovation procurement to be created either for a research development purpose or for a novel approach to tackling an issue that has not been tried before. A tender or bid may be received from Liquid Therapy, which is a surf school for children with disabilities based in County Donegal. It engages, does a social return on investment and impact analysis of the work it has done, and then, most important, which differentiates it from the private sector, it could duplicate that model throughout the country if successful. That is the key difference with social enterprises. They are willing to share their homework.

Mr. Logue mentioned a couple of real opportunities that could take place as part of budget 2027, such as not having to go through the audited accounts every year, which would save the social enterprises up to €7,000. That is a real, practical measure that could be introduced by the Department. It is an initiative that could be signed off by Secretary General of the Department. Is that correct?

Will Mr. Logue go into more detail about the targeted PRSA rebate? What is the costing he has on that?

Again, this has yet to be costed because it depends. We have acknowledged that would be a very large figure. We are due to apply it across the board. What we have said is that it is in line with what Deputy Michael Murphy called for previously and what ISME and IBEC have called for previously, which is to offer a temporary PRSA rebate for cash-strapped social enterprises to address the current financial sustainability challenges. We have put the mark on the ground that it would be applied to the PRSA of any earner making below €44,000 annually. We need to get that costed, though.

That would benefit the worker rather than the social enterprise.

It would be the employers' PRSA.

Perfect. On the community services programme, if only 10% of social enterprises access the community services programme, who is accessing the other 90% of programme?

Only 10% of social enterprises in total get on the programme. That is the sum total of the programme, so 434 organisations in total get it, which represents 10% of the total sector of 4,335.

There is an opening for a new community services programme, is there not?

Thirty places are currently open right now but, again, we would like to see more. There are proposals for a pilot of 30 places, but taking the lens off it is a labour market activation programme and reframing it as genuine co-funding for social enterprises that are operating in areas of market failure and that address areas of Government priority.

This committee has had previous discussions on different programmes that are available to social protection and rural and community development in terms of the labour activation model and how we sometimes need to change those to go to more of a social model. It is interesting that the point Mr. Logue made today covers the community services programme, which we have not really discussed. We discussed the rural social scheme, the Tús programme and community employment schemes, and the need for the Department to change those towards more of a social model rather than just solely a labour activation model. It is interesting that point has come up again this morning in relation to the community services programme. That is something on which the committee should reflect and perhaps look at bringing back it back the Department to discuss it. Those are my questions. I thank Mr. Logue and Mr. Bruton.

I thank our witnesses. Obviously, I was a little bit late coming in. I have a couple of questions. I just read the statement. Will Mr. Logue explain financial self-sufficiency not being possible? What he is saying is that there is a kind of long-term requirement for stable funding for the sector. That is really operating funding rather than capital. Is that what he is saying?

It is saying to help us to maximise our trading income in the first instance. There is a genuine interest in being self-sufficient, but where that is not possible, it is just a question of when the State spends the money. The State can decide that the organisation will go to the wall and it can have the knock-on effect of that or it can have a very modest co-funding of social enterprises in market failure areas. To be clear, we are not saying that all social enterprises operate in market failure areas. The example was given earlier of the Third Space café in Smithfield. It has a very high total addressable market in the local area. It is fully self-sustaining. There are other examples of social enterprises in the same boat, but most social enterprises in Ireland stepped in because either the State or the private sector did not go there. Why? Because for the private sector, there was no profit to be made there. There is no profit to be made in a community centre. It is very hard to make a profit when someone is running a disability labour market activation programme. All we are saying is to help us do the maximising trading piece, and where there is a co-funding need, it is probably a smart return on investment for the State to do that.

Okay. Would SERI's model or pathway be that it would be trying to push the social enterprises to move into that sort of self-sufficiency or is Mr. Logue saying that, in the long term, there is a group that would have, as Deputy Aird said, a long-term dependency?

For sure, and forgive me for repeating ad nauseam the analogy of the rural post offices, but if the Deputy thinks about their model, what are we trying to do there? We are asking whether there are other revenue diversification areas to help that sector achieve self-sustainability. Are there other services post offices could run? Could they go into a new line of business? Could they maximise what they are already doing? Could they rethink their pricing model? Social enterprises absolutely want to do that in the first instance. The ideal is to get to self-sufficiency because it allows organisations to focus solely on their impact, not at the behest of anybody else. There are some organisations that, through no fault of their own, cannot get there. All we are saying is that it makes sense for the State to step in as it does for rural post offices.

Will Mr. Logue give an example of who he would consider the exemplar? If I were to put him to the pin of his collar, who would the exemplar be in doing this? On the other side, as Deputy Aird mentioned, will Mr. Logue give one example of where a social enterprise went to the wall, the State had to step in and it ended up effectively costing the State more? What would he consider the best examples of those two ends of the spectrum?

The first was an exemplar of social enterprise. What was the second?

Who would Mr. Logue consider is an exemplar? Who is an exemplar in terms of who is doing really well in terms of social enterprise?

FoodCloud is a really good example but, again, FoodCloud, which is obviously doing food redistribution, is partially State-funded. Therefore, we have to realise that the State has said there is an obvious return on investment in supporting that organisation. It depends on what the Deputy means. If he means fully self-sustaining, there are examples of social enterprises that are fully self-sustaining. With regard to social enterprises that are having a massive social impact, FoodCloud would be an internationally regarded one. Rehab Group is another internationally regarded social enterprise.

In terms of social enterprises that have gone to the wall, there are three or four. I do not think they would be delighted by me mentioning them so I am going to send them to the Deputy directly, but there is a list.

That is fine. Will Mr. Logue explain a little bit more the innovation procurement pathways? It sounds like he is talking about e-procurement below the threshold limits. Where is the innovation? Is there a model he has built? Is there a particular piece of innovation within that model he has or in that sphere? Is there anything in particular in terms of innovation?

In terms of how innovative it is as a tool?

Yes.

It is an AI-powered social procurement platform. There are 65 public buyers on 240 social enterprises and it is focused on making it as easy as possible for public buyers to find social enterprises. That is not necessarily what we are using when we are talking about innovation procurement. What we are saying is that where the State has defined wicked or stubborn problems that are not easy to solve using traditional mechanisms, it should consider using social enterprises for innovative procurement. The example we gave was, if it were struggling to find supports for people with disabilities, for example, it could create a specific confined competition under the existing rules, whether it is for research and development or for a novel approach to tackling that. There may be a myriad of social enterprises that could step in and say they have a solution. The innovation procurement allows them to test that. The beauty of it in this sector is that they could duplicate the model. They are open to other organisations copying and replicating what they do.

Okay, so the AI bit is the matching. That is where the AI is in it.

We have a team of two. The other staff member in our organisation is an AI engineer whose sole role is to help us become Ireland's first AI-powered advocacy body and then help the social enterprise sector to adopt artificial intelligence to maximise its output with very modest resources.

That is very good.

I welcome Mr. Logue and Mr. Bruton to our committee this morning. I was listening earlier and heard their presentation and what Mr. Logue had to say. I was in Tallaght with the Chair recently to see the excellent social enterprises they have there. There is a reason I want to talk to the witnesses today. I come across a lot of dereliction in our towns. Many of these buildings are former business premises. The reason I am raising this with the witnesses today is that I come across companies and start-ups that want to start a social enterprise and are lacking space to do so. The proposal I am asking the witnesses to try to support is to talk to local authorities about these empty or vacant premises on our main streets throughout every town and village in Ireland and use that as a basis. I know there are examples around the country and I can give the witnesses some of those, but I will use these as examples of where we could actually put social enterprises on main streets and use a lot of those derelict buildings to counteract the dereliction in many towns. I have approached this with my own local authority, and while it said it is a great idea, obviously, the whole issue row revolves around funding. I believe there is a lot of merit in this and I would really like to hear the witnesses' thoughts on it. As we all know, we need to reinvigorate our towns and villages, and to have those empty commercial premises back open again with social enterprise would be key for a lot of towns into which big business is not going to come back. Some of those towns have lost businesses that were really strong in the fifties and sixties and whatever else. To get social enterprises back on to our main streets and expand on to our main streets will be key to dealing with some of the dereliction we are seeing.

I totally agree. An interesting way to do that, as part of our measure to repurpose the dormant accounts social enterprise measure, is community wealth building. A key component of that, and we have seen best practice examples in Scotland and Northern Ireland, is community asset transfer. Where there is a derelict building or a building that may be publicly owned but is no longer used or under-utilised, that should be given to the community. They will revitalise and use it. They will welcome other people in and run services through it. Again, that keeps towns and villages alive.

We see that up and down the country, where the local community centre, the enterprise hub or the co-working space serves as the central fulcrum for social infrastructure in communities.

As I said, there are a number of examples of this in my own hometown, where the former Model School has been turned into a social hub. However, there is so much dereliction in many of our towns. It is about trying to combat that, and I believe more can be done in this space. Is the community asset transfer an example that is happening in Northern Ireland and Scotland?

Scotland now has the Community Wealth Building (Scotland) Act 2026.

That is something we could look at in this country.

I can share examples of practice with the committee.

It would be brilliant if Mr. Logue can do that.

I am conscious that Mr. Bruton has an appointment in the audiovisual room and might have to leave. I ask him to make a final comment.

I thank all members for their questions and interest. There are many areas where the State is looking for social impact. We think of positive ageing, town centre renewal, the circular economy and the labour market integration of people who are on the margins. The reality is that if there are no community networks that can be activated in these spheres, we are not going to get the impact we need. When we talk about innovative procurement, we would love to see the Departments thinking more creatively about how to keep people active after they retire. The reality for a lot of people is that they become isolated, their health conditions are not diagnosed and they become dependent very quickly, whereas through community networks, they can be kept in those circles. I would advise anyone to go to St. Munchin’s Community Centre in Limerick to see just how creative a community centre can be in tapping into initiatives to create value. People are working there whose lives would have gone completely off the rails were it not for the centre.

We also see the need for us to start to demonstrate more impact to Oireachtas Members, so we can answer some of the rightly sceptical questions, for example, whether this is looking for money without a return. The reality is that when we complete some of the work in different areas, we will show that the social value dramatically outweighs the cost of the structures that we are looking to support. However, we recognise that we have to do that. We are not going to ask politicians to fund initiatives if we cannot demonstrate they are adding real social value. The questions were great, and Mr. Logue answered them supremely well, but they also force us to respond. They are the questions that we need to be constantly able to answer to justify our ask for a new deal.

Several members wish to ask supplementary questions. I call Deputy O'Reilly.

The witnesses mentioned the AI-powered procurement tool for below-threshold spending. That sounds brilliant, although we had long discussions about AI at the last committee I was on with Mr. Bruton. We can park that for the moment. What is the scope for that, not necessarily just in terms of money, but also the number of enterprises and the number of people who might be involved? What is the success rate for social enterprises tendering for that work by comparison to the for-profit model?

It is very low currently. I would struggle to find more than 50 social enterprises in the entire country that are actively engaging in below-threshold contracts.

Mr. Logue is saying there is real scope for expansion.

There is great scope. We have spoken at three or four OGP events where there were 300 or 400 buyers in the room. They are genuinely interested in buying from social enterprises. The thing we constantly forget, and this is a criticism of myself, is that we expect their lives to be all about just buying from the social enterprise. We then realise they have a mountain of paperwork that they have to abide by, and they have other suppliers they are interested in. In that scenario where they are resource-constrained, they will just do what they have habitually always done, which is to use the local supplier they may already have used. At the same time, if they have a printing job worth less than €5,000 and they want to go to Triest Press in Roscommon, they are getting good quality printing at a good rate, and if they are not paying any more, it is an affordable, competitive rate, and they are also getting that added social impact. Our job is to make it as easy as possible for the public buyer, as well as the large-scale private buyers, which are also interested, by the way, and companies like Sisk are very interested in buying from social enterprises. The last piece is how we do the job of getting them procurement-ready when the LEOs are inconsistent and SICAP is underfunded.

I agree. I remember that it was Brendan Howlin who set up the OGP. At the time, I ended up in the Labour Court with him because we were fearful for the jobs of our own members, and it turns out that we were right to be. No social clause was put into it at that stage, when it could and should have been. At this stage, with the capacity of social enterprises to tender, is there anything that can be done by either this committee by way of a recommendation, or by the Government as a whole, to encourage social enterprises and to make it easier? How can it be done? I believe the willingness is there. I said this at the time, although it fell on deaf ears. People will want to spend their money where the conditions are decent. If you remove that profit motive, you can still deliver decent services. Even for below-threshold spending, what is it that the State could do to take that step and get that expansion and growth?

The short answer is the impending national public procurement strategy. We hear there will be a 10% voluntary target for all public contracts having a social clause included in them. That is a voluntary target, so it is not mandatory, but we think it is certainly a good starting point. It is nowhere near what happens in the UK, for example, which has had a Social Value Act for the best part of 12 or 14 years. Hundreds of millions are spent on social enterprises every year in the UK. We are starting from a lower base in Ireland. However, a 10% voluntary target, provided it is quickly enacted after the launch of the strategy, would be a useful starting point.

I was glad Mr. Logue mentioned FoodCloud. Aoibheann O'Brien is from Portumna, my own parish in County Galway. She has had a very successful run with Food Cloud, and it has expanded to the UK and places like that. It has been a joint partnership all the way through.

Going forward, I would love for us to look at the community services programme and have a real, in-depth conversation. We are all landing in the same spot, but maybe we are looking at it through different lenses to get to the end goal. I believe that under the various CE and Tús schemes, and all the different sections, we need to look at that model as a whole with regard to how we can retrain people. We would still look at it as activation, but we can expand it to include the activation of people with additional needs so they can get active within the labour force. They can then be part of the community services programme and, for example, work in crèches or in community cafés. There is a circular aspect to how we can train and reskill people who are totally underutilised and probably not trained. We need to match the training level to meet their needs because it might not be at the level that everybody else expects. They could start with the QQI programmes, exactly as the Together Academy has done.

We also need to look at how we are delivering social inclusion models, for example, in our gyms. In Donegal, the No Barriers programme is a really good example. However, Johnny Loughrey’s gym is probably the only gym in the country that is completely accessible and inclusive, and for everybody in the community to use. He has a very good, sustainable model, and it is a model that can be replicated.

Going forward, I would love to see a conversation on the community services programme. At the same time, it would be fantastic to see how those initial start-ups in the social space can be sustained long-term within their communities. What is the framework, outside of the Lorrhas of this world, where there are more than 400 or 700 people? How do we get the entire community to be sustainable? That is where the challenges will happen. We have a lot of buildings. Our problem is how we knit this together. If a childcare facility is only doing after-school or morning crèche, how do people come together to be able to access this? A community centre might already have several hundred thousand euro to be redeveloped, but people cannot get in the front door because the board says it does not do this or that. How do we break down those barriers? That would be great work for us to do.

To pick up on the example of No Barriers, it is a classic example of a social enterprise that is using multiple different income sources to make its social impact work. It has a private membership gym on-site, and it is training hand-in-hand with people who are doing neurorehabilitation. I also give credit to the politicians, as their funding matters an awful lot too.

That is an example of where a myriad of funding sources came together to have an overall social impact. I will answer the question with reference to No Barriers. Johnny Loughrey of No Barriers would be perfectly happy for somebody else to duplicate his model across the country if there was the mechanism to do so. Arguably, the mechanism is supposed to be social innovation. What social innovation funding - Rethink Ireland, New Solutions, etc. - is supposed to do in practice is say that there are examples of pockets of social innovation happening around the country and ask why every other community in the country does not know about this, at least. If they knew about it, they could say, "God that is a good model" and they could consider whether to repurpose their current gym and bring it to Portumna. Why is that not the model? The challenge is that there are lots of pockets of innovation happening right now but there is nobody communicating. That is why we see our role as taking examples of best practice and sharing them across the country.

I want to follow up on one or two things and I will ask a few pointed questions at the end. On the childcare model, this is a huge issue, particularly in my constituency. Not-for-profit organisations are turning to the for-profit model, jacking up prices and putting parents in serious financial difficulty. The idea of supporting social enterprises in the childcare space is incredibly important.

Second, I have been looking at the CSP because I have two community centres that are looking for operational funding to support their ongoing operations and are struggling to get it. One of them is a social enterprise. It is specifically focused as a community centre on the inclusive artistic development of people with neurodivergent issues or conditions. I discovered that there was quite a lot of funding available for capital if you were building community centres, but the follow-on was not being funded. In such circumstances, how do community centres sustain themselves and deliver the services they were built to provide?

Having listened to everything that has been said, I will put some words in the witnesses' mouths if they do not mind. My sense is that social enterprises are companies that are trading primarily in the public interest or the community interest. Those of us around the table who are policy makers take the public interest extremely seriously. The question is how social enterprises deliver that public interest and I understand from what the witnesses have told me is that this is done in a variety of ways. It could be done through the provision of services, the provision of products, employment opportunities, community spaces or economic activity. I want to focus in on one particular part of that: the employment opportunities that social enterprises provide. As we have heard, approximately 84,000 people are employed by social enterprises. One of the companies mentioned, Rehab Group, has one of the biggest uptakes of the wage subsidy scheme, which is a social protection scheme. I would love to hear a bit about how we should be thinking about supporting this kind of employment in social enterprises in Ireland. These kinds of gaps in employment - whether it is somebody with disabilities, somebody with neurodivergent conditions or where certain accommodations required - are really difficult to tackle. Sometimes social enterprises are uniquely placed to provide that kind of employment and inclusion opportunity for people who are at the margins.

I will ask my final question with my enterprise hat on. I am quite conscious of the acceleration of costs for enterprises more generally. Mr. Logue spoke about audits and PRSI. How have energy costs, insurance costs and all the kinds of things that affect enterprises, more widely defined, impacted on the social enterprise community? I would love to hear about that.

I will give a quick answer. In relation to employment supports, the example I would give is Speedpak, which is an e-commerce fulfilment packaging social enterprise. They employ people who are long-term unemployed. That is their core model. They would say that their challenge at the minute is in the context of full employment. It means that the people they are getting in through labour market activation schemes are much further removed from the labour market than the people they would traditionally get. That is fine because that is their model, but the support they get to fund and train has not changed in the best part of 12 years. John, who is running Speedpak, says he is trying to do so much more with less, in effect, when you tie in inflation. Assessment of the training grants that are associated with the community employment scheme and with Tús, etc., would be a welcome first step.

We have almost not brought up the acceleration of costs because it is an obvious one. Insurance is a major issue. Light, heat and utilities are major issues, as are audit fees. The big difference we see in this sector is price inelasticity. When a private company is subject to those costs, obviously there is pain associated with that. They can either fold or increase their prices. It is a lot easier to do both of those things as a private business. In a company limited by guarantee structure, where most social enterprises are, they tend to just soldier on by leveraging the voluntary hours and elbow grease of their voluntary directors. That is one thing. They tend not to want to pass their costs on as increased prices to their customers because those people tend to not be able to afford it as they are in disadvantaged areas. What happens is that the social enterprise takes the hit. That is what we are seeing. That is why you see 56% of them saying that if an unexpected financial challenge happens next year, they do not have the reserves to cope with it.

This conversation is very useful, to be honest. One of the things I suggest is that the demands will be greater. They are not going to become less as we go forward, given the population increase and the whole thing with the demographics. I am reminded that we should never be looking for one of these hubs or social enterprises to be profitable. Well-being is profit. If the people who these services get the human benefit from them, that is the greatest measure we can get. Any investment the Department can make in that space would be very worthwhile because it improves people's lives and gives people access. Doing both of those gets people on a stronger platform.

I support Senator Rabbitte and her concept of a circular café. I would like to take this opportunity to thank everybody who employs people. I would like to mention two boys I know in my area. I talk very regularly to them when I am passing their farm. They go to work every day. The biggest problem they have is that they would love to be working for longer. They go in from 10 a.m. until 12 noon and then they are out. They would love to be working for longer. I thank all the people out there who employ people like this. It is very easy for us to come in here and speak about this. Those people provide those people with a job and see the satisfaction on their faces. We all know kids with Down's syndrome; they are the most lovable children. I want to take this opportunity to say that they are very good at the job they do and 99.9% of them - not all of them - have a great manner. It is important that we acknowledge those people who put their hands out to welcome those people in and give them employment.

I want to echo what Deputy Roche has said. I am not a member of this committee but I find this area really interesting. The political system, broader than this committee, would be very interested in this as an area. Mr. Bruton mentioned the evaluation of social value. That is really important. People have to be convinced of the value of it. Does Mr. Bruton have something specific planned in that regard? Does he, on an ongoing basis, look at particular examples, case studies or pathways and point to the value that has been created? Is there something planned or something concrete being done?

The Department of rural and community development, as part of the training for impact policy, supports the creation of results frameworks that measure social return on investment and shares those tools with the sector. It is probably a weakness, if we are being honest, right now for this area and this sector that we are not fully demonstrating that value. A lot of the impact is qualitative in nature rather than quantitative, but that is coming as part of this policy.

We are undertaking to look at subsectors where we believe we are genuinely making an impact. We are trying to get those who are involved in such sectors to be a bit more systematic about recording the reach they have and the impact. Mr. Logue has a very innovative way of interviewing people, using AI to try to assemble some of the data. We are trying to build up a sort of picture of the social impact, over and above the hard numbers, because I think it is where the real added value is coming from.

You will probably get a kind of bureaucratic methodology. If you can bring out your own story and your own efficient and innovative methodology, it is very powerful and it has huge value.

As I said, the broader political system would be interested in that.

I have one more question. Mr. Logue mentioned Scotland a few times in terms of best practice. Is there a specific practice or example in Scotland he can give that would be of benefit here?

Just Enterprise was created when a consortium of social enterprise stakeholders got together to make it as easy as possible for social enterprises to find any support they need. There is a single front or interface for any social enterprise. It refers the user to whatever organisation is most useful. We should have that. It is easy.

What is it called?

Just Enterprise. It is a consortium of four organisations funded by the Scottish Government.

I thank Mr. Logue and Mr. Bruton for their contributions today, and for providing briefing materials in advance of the meeting which assisted the committee in its deliberations. It was a very worthwhile discussion. I again thank them for coming.

Before adjourning, I thank all of the individuals and organisations who made a submission as part of the pre-budget review. The committee will now review the submissions received and arrange hearings in the coming weeks to discuss matters in the context of budget 2027.