Policies not praise are what social entrepreneurs need to thrive in recovery

Kevin Armstrong

Policy Lead

8th March 2022

10:00am

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A new Parliamentary inquiry report has added to the political chorus of praise for the vital role social entrepreneurs have played during the pandemic. More interestingly, the same report has also been highly critical of the support provided by the Government to the sector. How can it be that political action for social entrepreneurs has so profoundly failed to match this praise, and what can we do about it? 

The All Party Parliamentary Group (APPG) for Social Enterprise’s new report showers the sector with praise, and rightly so.  ‘The nation should be proud of our social enterprises, their commitment to communities, the efforts that their staff have made and the resilience they have shown,’ says the APPG

These compliments echo positive messages earlier in the pandemic, such as the Prime Minister’s welcome acknowledgement of the sector’s “tremendoussupport for communities. Sadly though – as the APPG’s report shows – this praise has so far failed to translate into enough tangible action. 

Just take a look at the financial support for the sector. Businesses received nearly £80 billion of emergency Government-backed loans, but social entrepreneurs struggled to get a penny of it. The inquiry concluded that ‘social enterprises were denied bank accounts’ by the high street banks approved to give out the loans. Other emergency funding was also ‘designed in a way that did not enable all social enterprises equal access.’ 

The inquiry praised local authorities and specialist funders for serving some of the unmet need from social enterprises for emergency support, but we know even this wasn’t enough for some. When I gave evidence to the inquiry I said that UnLtd was hugely grateful to the Government for funding the £4.75 million Inclusive Recovery Fund, which enabled us to support 123 social ventures. These ventures widened and deepened their social impact in amazing ways, For example, Seyi Akiwowo used the funding to help Glitch UK make online spaces safer for some of the most marginalised people in our community. But there were another 570 social ventures we couldn’t support because demand was just too high.  

As resilient as social entrepreneurs undoubtedly are, we mustn’t forget that some outstanding social ventures had to close during the pandemic. Early on we heard how social entrepreneurs were having to take the tough decision to pause rather than proceed with delivery, and we know that pivoting existing services or piloting new approaches wasn’t possible for everyone. Many social entrepreneurs are currently still seeking finance from the likes of the Social Enterprise Support Fund – open for applications until 24th March - to catalyse their recovery. 

The APPG report puts forward a key reason why social entrepreneurs were overlooked for pandemic support. It says there was ‘a lack of understanding and awareness of social enterprise or its contributions to society and the economy’. So how can we put this right? 

When giving oral evidence to the inquiry, social entrepreneur Anwar Ali OBE from Upturn Enterprise said: “we need a different approach for social enterprises.” I take inspiration from this, both in terms of the change we call for, and the way in which we call for it. 

Firstly, social entrepreneurs need more equitable access to finance, including social investment as shown by the findings of the recent Adebowale Commission. It is everyone’s duty – including UnLtd’s - to speak up as loudly as possible to ensure absolute awareness, understanding and appreciation of these proposals, which the APPG inquiry has now also backed. It’s vital that we also use learnings from this latest inquiry to make sure that no social entrepreneur is denied financial support because of the legal status of their venture. We mustn’t make do with more praise this year. It is imperative that the Government commits the next £880 million tranche of dormant assets to properly support our diverse sector. 

There is vital work to do to break down other barriers facing social entrepreneurs too. Barriers to accessing markets come up frequently in the APPG’s report, for example, and the inquiry justifiably points out the need to embrace the new generation of social entrepreneurs. Expanding the eligibility criteria for Help to Grow support would help on both fronts, so we’ll ramp up the pressure with others to make this happen. The inquiry is right to raise the need to improve access to Government contracts as well, none more so than for the health and social care social enterprises that ‘worked tirelessly’, despite facing issues in accessing PPE. We’re all going to have to sharpen our elbows to put the report’s words into action. 

There is so much work to do, and we have to make sure our work pays off in this unique opportunity to shape the recovery. Let’s devise a different approach for the future. If we do this, we might finally convert political praise into the policies we need. 

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