In case you weren’t able to watch the Budget live and play UnLtd’s Budget Bingo, these were the key announcements for social entrepreneurs:
- A new Recovery Loan Scheme will succeed Bounce Back Loans and the Coronavirus Business Interruption Loan Scheme on 6th April. We’re told this will be ‘open to all businesses’, so we hope it will be more accessible than the outgoing schemes.
Recipients of finance under the outgoing schemes will also be able to apply for new support. The Recovery Loan Scheme will provide lenders with a guarantee of 80% of eligible loans between £25,000 and £10 million.
- Social Investment Tax Relief (SITR) will be extended until April 2023. For the time-being, this will ensure the continued availability of Income Tax relief and Capital Gains Tax hold-over relief for investors in qualifying social enterprises, helping them access patient capital. Later this month, the Government will finally respond to its 2019 consultation on SITR, so expect to see hints of the longer-term future of the tax relief then.
- A £150 million Community Ownership Fund will be launched to help community-owned businesses to utilise local facilities. From the summer, community groups will be able to bid for up to £250,000 matched funding (or up to £1 million in exceptional cases) to help them to buy local assets. The idea is that spaces like pubs, sports clubs, theatres and post office buildings continue to play a central role in towns and villages.
- Other additional place-based funding will become available. Local authorities will get an additional £425 million of discretionary business grant funding to distribute. The Government will also accelerate investment in three City and Growth Deals in Scotland (Ayrshire, Argyll and Bute, and Falkirk) and three in Wales (Swansea Bay, North-Wales and Mid-Wales).
Over the next five years, £84.5 million in funding will be brought forward to speed up investment in local economic priorities for those areas. Derry-Londonderry and Strabane have City Deals, announced last week, which will focus on inclusive and sustainable growth.
- New grant and advisory support will begin, intended to help ventures restart and grow. ‘Restart Grants’ in England will cover some of the costs of safely reopening in the coming months: £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses.
The Government is also launching ‘Help to Grow’, consisting of: (i) a management programme designed to equip SMEs with the tools to grow a thriving business, and (ii) a digitisation scheme, featuring advice and cover for up-to half of software costs (maximum £5,000).
Founders of social enterprises may moderately welcome the continuation of the Self-Employed Income Support Scheme (SEISS) for a fourth and fifth grant, although we appreciate this support alone is insufficient for many. Entrepreneurs must have submitted a 2019-20 self-assessment tax return to qualify, with eligibility criteria remaining otherwise unchanged.
Employers may also welcome the extension of the furlough scheme to September, but will need to note that rising employer contributions will be phased in from July. The National Living Wage will increase as planned next month.
It’s worth searching through the Budget document for any other announcements that may help or hinder you too, depending on the type of social venture you run and the specific social impact you work to achieve. Existing business rate reliefs and VAT cuts are extended, for instance.
Those who improve access to employment may be intrigued by the Chancellor’s continuing commitment to Kickstart. Social entrepreneurs who support the UK’s ageing society may be concerned by the conspicuous absence of any social care reform spending commitments.
If you have any queries or remaining thoughts about the Budget, we’d love to hear from you @UnLtd. We will be doing everything we can to get your ideas heard and work with the Government in the crucial recovery period ahead.
We recognise how crucial it is to support those who have previously been left behind so that the UK benefits from the fullest impact social entrepreneurs can deliver.