speri.comment: the political economy blog

Enabling enterprise: towards joined-up governance

The Government needs to embrace Britain’s hidden enterprise culture, not repress it

Colin Williams, Professsor of Public Policy, University of Sheffield

Colin Williams

Most business ventures do not just start-up overnight. People do not have an idea for a business one day and start-up a wholly legitimate enterprise the next day. Instead, many businesses start-up by engaging in a few off-the-books transactions and it is only once the entrepreneur sees that there is a demand and an opportunity to grow the business that they consider trying to create a legitimate venture.

The problem, however, is that governments have conventionally viewed these businesses operating off-the-books as something to eradicate and repress. The outcome is that governments end up trying to eradicate with one hand precisely the enterprise and entrepreneurship that with another hand they are so desperately trying to nurture.

Enabling Enterprise, a recent report co-authored with Community Links (a charity based in East London) by myself, Dr Sara Nadin, Dr Aaron Barbour and Dr Marilyn Llanes, calls for a more joined-up approach to tackling this hidden enterprise culture. Recognising the lived reality of how many businesses start-up trading off-the-books, we call for a shift away from a repressive approach towards this hidden enterprise culture. Using vignettes of entrepreneurs starting-up enterprises on an off-the books basis, we show the real and pressing need to actively help these off-the-books enterprises make the transition to legitimacy.

How can governments help these off-the-books businesses to formalise their operations? Enabling Enterprise displays that there is no one simple quick fix solution. Instead, it draws attention to a whole range of good practice policy measures that might well be transferable to the UK which various government departments could pursue to help these off-the-books enterprises become fully legitimate businesses. To join-up policy across government and coordinate the multifarious actions required to harness this hidden enterprise culture, Enabling Enterprise calls for the establishment of a Hidden Economy National Committee.

Rather than leave this report and its recommendations to gather dust, over the past few months, we have taken the bull by the horns. In the current era of calls by higher education funding bodies for academics to show how they are having an impact on society, we have decided to help UK central government departments join-up thought and action on this issue. In November 2012, we used ESRC ‘Festival of Social Science’ funding to establish and hold the inaugural meeting of the Hidden Economy National Committee. With two-thirds of the membership being government departments (e.g., HMRC, Home Office, DWP, BIS, DEFRA) and the remaining one-third social partners (e.g., TUC, Federation of Small Business, Chartered Institute of Taxation, Oxfam), its terms of reference are to improve cooperation across government departments, provide a platform for tripartite social dialogue and coordinate UK strategy on the hidden economy.

What has become quickly apparent in establishing this National Committee is the important role that academics can play in facilitating tripartite social dialogue and joining-up governance. Importantly, it displays how academics should not merely confine themselves solely to highlighting governance problems and how they might be overcome, but should also then take the next step and use their energies to bring their recommendations to fruition. We hope that our initiative in the field of tackling the hidden economy will inspire academics working in other fields to take similar pro-active steps to put into practice what they preach in their erudite sermons.

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