Social Enterprise Authority Calls For Government Support
Social Enterprise Mark CIC, the award-winning international social enterprise accreditation authority, has joined forces with other social sector bodies to call on the government to give the social enterprise sector access to its “fair share” of support to fuel the post Covid-19 recovery.
The UK’s 100,000 social enterprises and co-operatives, which contribute £60 billion to the economy and employ 2 million people, are businesses on the frontline of the UK’s poorest communities and employ those on the fringes of the workforce. However, they are falling between the cracks of the current government schemes to support businesses through Covid-19, and research shows half the social sector could run out of money by June without further action from the state.
At a more local level, there are over 2,000 social enterprises in Cornwall, Devon and Somerset, which contribute almost £1.8billion to the South West economy.
Social enterprises are set up to reduce inequalities, primarily trading for a social or environmental purpose. Supporting social enterprises and co-operatives will be key to emerging from the economic and social shock of Covid-19. Yet, social enterprises report being denied business grants and loans due to restrictive criteria and inappropriate rules governing loan requirements. This is despite the fact that the government has distributed £15 billion in loans to businesses which trade solely for profit. Social enterprises have constitutional and legal checks on their governance, which makes abuse far lower than in the private sector.
Lucy Findlay, founding Managing Director of Social Enterprise Mark CIC, has joined leaders from eight other social enterprise support organisations to call on the government to act or risk choking off the UK’s economic recovery before it has even begun. The group has written a letter to the Chancellor with the backing of their members, which outlines a four-point Covid-19 sustainability plan:
- Expanded Business Grants for small social enterprises, those working in deprived communities or with vulnerable workers
- Blended finance/zero-interest loans for larger social enterprises
- Access to additional statutory funding for additional costs in delivering public services
- Covid-19 Business Adaptation Support
In total, this support package will cost in £45 million per year, a fraction of the UK social enterprise sector’s £60 billion contribution to the UK economy.
Commenting on the campaign, Lucy Findlay said:
“Social enterprises are part of the glue that holds our society together. They will be needed now more than ever to help rebuild a more resilient economy moving forwards. To not invest in them now risks huge holes in getting back to normal and will leave the most vulnerable without the support that they so desperately need.”
Gareth Hart, Chair of Plymouth Social Enterprise Network, said:
“If our future economy post Covid-19 goes back to ‘business as usual’ it will only compound inequalities and make recovery harder. We will need a healthy workforce with decent, productive jobs that enhance, not damage, the environment. Social enterprises can be at the heart of that vision, so they need support to ride out this crisis and be in a good place to help rebuild later.”