Attention Chancellor: Investment in social ventures can help the UK through this crisis

The Autumn Budget has been cancelled, some of the COVID-19 emergency measures have just been extended, and an influential MP has just proposed a raft of measures to support social entrepreneurs, but the threat of austerity still looms in the Chancellor’s forthcoming Comprehensive Spending Review. Now’s a good time to take a breath, process what’s happened, and look ahead to what will hopefully happen next, if we all get our way. 

There’s good reason to be hopeful that we can influence the next moves by the Government because they’ve been pretty responsive to our requests so far during this crisis. You might be one of the 1,000 social entrepreneurs who, together with UnLtd and eight other sector organisations in April, co-signed a letter to the Chancellor proposing ways for the Government to support social ventures through COVID-19. £150million extra in social investment followed, as did the £18.7 million Social Enterprise Support Fund, although the latter didn’t ultimately receive funding direct from the Exchequer. These proposals came to fruition thanks to the pressure you helped us to provide, and they’re already achieving impact. 

The additional funding secured has already made a huge difference to social entrepreneurs and the communities they serve. Instead of closing due to COVID-19, the social ventures supported are employing people, helping others to find work, reducing reoffending rates, easing the burden on health services, and much more besides. The social value of this will be huge, as will the returns to the Treasury in terms of tax revenue and savings on state support. 

The success of schemes like the Social Enterprise Support Fund should show the Chancellor that investment in social entrepreneurs will deliver the social progress and net fiscal savings that he craves. Unfortunately though, we haven’t seen anything in his latest statement that will help to truly untap the solutions that social entrepreneurs have to this crisis. 

We know that the new Job Support Scheme may have come too late for the 44% of social ventures that were utilising the furlough scheme. The Chancellor’s extended support for the self-employed won’t be adequate for those of you who hadn’t started to earn a living from your venture early enough. Considering the issues with the business loan schemes - ‘CBILs’ and ‘BBLs’ - that you’ve been telling us about in the recent Banking Survey, we also know that their extension won’t necessarily give you the financial support you need to deliver even greater social and economic benefits to the country. 

The Government could still go considerably further to extend the social and economic benefits that social entrepreneurs can bring to every part of the UK, which is why we’ve sent them a proposal to consider as part of their Comprehensive Spending Review, whereby Government spending will be broadly decided for the next three years. Together with Social Enterprise UK, Co-operatives UK, Plunkett Foundation, Social Enterprise Mark, Locality and the School for Social Entrepreneurs, UnLtd have submitted four key spending proposals: 

  • A ‘match trade’ scheme for social ventures that will help you to scale-up your work in deprived communities at a time when many need you more than ever. In this scheme, grants would be awarded proportionate to any increases in income from trading, akin to successful programmes already delivered by the School for Social Entrepreneurs, for example. 
  • Improved support for people who have recently started a social venture, or could start-up a social venture in the future. Recipients of the New Enterprise Allowance would be directed to sector support, along with the new generation of social entrepreneurs who have already been rising up during this crisis, but haven’t qualified for support so far, such as the 3,000 people who founded a new Community Interest Company in the last few months. Our #UntapSolutions polling already told us that the UK has a wealth of social venture ideas that are waiting to be unleashed. 
  • Backing for social entrepreneurs to take over distressed, but potentially viable businesses in communities hardest hit by COVID-19. This will help to minimise insolvencies and associated job losses, whilst helping social entrepreneurs to utilise spaces for the benefit of their communities. We’ve already seen the value of supporting social entrepreneurs to utilise spaces as part of our Spaces 4 Change programme. 
  • The creation of Community Entrepreneurship Zones, where central government funding for social entrepreneurs could be targeted in a place-based way. At UnLtd, we’ve seen huge appetite for the Social Enterprise Support Fund from more established social ventures, and we hope this proposal will create a new opportunity for you to secure the support you need in your area. 

Each of these proposals have also been separately called for, just in slightly different words, by Danny Kruger MP, the former Government Advisor who published his ‘Levelling up our communities’ report for the Prime Minister yesterday. This gives us added hope that the Government will take our Spending Review submission seriously, but we won’t rest on our laurels.

Read the full submission here.

Our next steps to influence the Government’s spending plans will take shape in the coming weeks, so if you would like to be involved – or if you have any suggestions in addition to what we’ve already proposed – please get in touch.  Your support has been key to the progress achieved so far, and it will be needed again in the future if we’re to win back the Chancellor’s attention. 

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Our next steps to influence the Government’s spending plans will take shape in the coming weeks, so if you would like to be involved – or if you have any suggestions in addition to what we’ve already proposed – please get in touch.  

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