Social Enterprise UK responds to Prime Minister’s announcement of Big Society Capital
Big Society Capital welcomed as ‘world’s first social investment bank’ by Social Enterprise UK chief executive Peter Holbrook.
Responding to today’s launch of Big Society Capital by the Prime Minister, the national trade body's CEO, said:
“Today’s launch of Big Society Capital signals to all, but especially to those in the financial sector, that capital needs to be raised in new ways to support the social enterprises and charities working tirelessly to address the country’s social problems and support those at a disadvantage.
“The setting up of the world’s first social investment bank is to be wholly applauded, and will provide much needed finance to social enterprises and charitable organisations. The capital is likely to be in high demand as traditional pots of funding become more difficult to secure as a result of the economic downturn.
“Big Society Capital will be an important anchor within the UK’s growing social investment market and has the potential to direct capital to where it’s needed most – into frontline organisations and sustainable businesses making a positive difference in communities across Britain. Access to finance has long been the biggest barrier for social enterprises keen to grow, broaden their reach and have a greater impact.
“Big Society Capital is helping to finance a number of projects including the Social Stock Exchange that will invite people to seek a social return on their investment as well as a financial one. The process needs to be made easy for potential investors seeking a blended return, but in equally important measure we need to ensure that social enterprises are ready to take that investment.
“Today’s announcement will raise awareness of social investment in the mainstream, and people will naturally be interested to find out what it is and what it can achieve.”
Review of finance barriers hindering social enterprises critical
Peter Holbrook also commented on the Government’s commitment to review the finance barriers facing social enterprises, referred to in the Budget last month:
“The UK is facing a number of challenges – youth unemployment at a high, a gaping hole where there should be affordable housing, and growing inequality between rich and poor. Social enterprises are needed more than ever to help remedy these and other problems. Time and time again, research tells us that access to finance is the dominant concern of social enterprises, frustrated because they cannot grow their businesses. That is why the review of the finance barriers hindering social enterprises needs to happen as soon as possible and be independently chaired to result in real change.”
Findings from Fightback Britain , the largest survey of social enterprises, reveal that access to finance and cash flow problems are the dominant concern of social enterprise – 44% of respondents claim the availability and affordability of finance to be their greatest barrier. This is markedly different to SMEs who rank the availability of finance as only their sixth greatest obstacle to success after the state of the economy, cashflow, taxation, competition and regulation.
Stakeholders explain the role of Big Society Capital, including its chair Sir Ronnie Cohen:
 Fightback Britain report, published by Social Enterprise UK (August 2011).
There are 68,000 social enterprises operating in the UK. Social enterprises exist to tackle a social or environmental problem and include community interest companies, co-operatives, and trading charities. Surpluses / profits are reinvested to further their social or environmental mission.
Peter Holbrook, CEO of Social Enterprise UK, sits on the board of the Big Society Trust, in place to ensure that Big Society Capital remains true to its social mission.
Social Enterprise UK runs the Social Investment and Finance programme, which aims to improve investment readiness, as well as understanding of social investment and finance within the social enterprise community. This programme of work was developed as a response to the needs of our members. Fightback Britain - our report on the State of Social Enterprise Survey 2011 - revealed a real hunger for investment, as access to finance and cash flow problems still dominate the concerns of social enterprises as key barriers at start-up and to sustainability.
Big Society Capital website - www.bigsocietycapital.com
For more information contact Fran Gorman or Sam Simmons in the Social Enterprise UK press office on 0203 589 4949 / 4951 or out of hours 07967 586489.