Andrew O’Brien is Director of External Affairs at Social Enterprise UK
It is incredibly hard to predict what it is going to happen at the moment, but what we know for certain is that social enterprises are going to be needed at every point in our journey. Now in the middle of this crisis, social enterprises are stepping up to the plate and providing support to their communities and living their values.
Once the crisis has passed, we will need social enterprises working in our economy to ensure that the people who have been worst effected are supported and that we rebuild our economy in a way that helps people and planet. The climate emergency and growing social inequality are not going away due to COVID-19. If anything, they may get worse as governments focus on propping up the status quo.
Our message is, therefore, a simple one. The British Government must not ignore the social enterprise sector. We’ve made so much progress in recent years to grow this sector and make our economy a better one for all our communities. We cannot allow COVID-19 to knock us off course.
Tens of thousands of social enterprises could be badly impacted
Every social enterprises will be impacted by this and the unintended consequences of COVID-19 will be many. It is impossible to give an exact number as every social enterprise is different.
However, looking at the sectors our businesses work in and assuming that areas such as hospitality, retail, social care, health and transport could be immediately and significantly impacted, we are looking at around 35% of social enterprises – around 1 in 3 that are at high risk due to COVID-19.
Beyond that lie another 37% that are in areas that could be significantly impacted due to the economic slow down or have significant impacts due the nature of their work.
This makes clear the scale of the challenge facing our sector and it is beyond our existing resources to get through this on our own. We need government to step up and support social enterprises through this difficult time.
We must ensure that the most deprived communities do not suffer
One in five social enterprises work in the most deprived communities around the country. Their contribution to helping these communities is critical and if they were to close down, because of the wider social and economic conditions in these communities, it would be a big blow that could take years to recover.
We know from previous recessions that it is the richest communities that bounce back quickest, we must make sure that we do everything we can to preserve those businesses in the communities that most need it.
We need help managing our liabilities, as well as our costs
Social enterprises need help with their costs. 84% of social enterprises employ staff – compared to just 9% of the voluntary sector. Many social enterprises will have rent to pay, tax bills and other suppliers that need to be honoured. On top of that, 14,000 social enterprises have some kind of debt to pay whether that be a loan, overdraft, mortgage or hire purchase agreement.
These are costs that need to be supported and social enterprises that have loans or other borrowing, do contact your lenders immediately to get support.
The government needs to think beyond just helping social enterprises to manage their rent and wage bills but think about the full range of costs that our sector has.
Protecting jobs and employees
For most social enterprises their staff is their number one priority at this time. On top of this, many social enterprises are employing people who are at higher risk of complications due to COVID-19. We estimate that there are 35,000 social enterprises who employ people with disabilities, homeless people, older people and those that have suffered from drug or alcohol addiction.
Across our deprived communities, we estimate social enterprises employ up to 440,000 people which is a huge number and jobs that will be hard to replace should those social enterprises not receive support.
Some of those sectors which are at highest risk due to COVID-19 also employ significant amounts of people. The average culture or leisure social enterprise employs nearly 200 people for example. Transport social enterprises have over 160 staff on average. These are significant numbers of people who are going to be affected by this health emergency. It is vital that government does not forget that social enterprises are big employers as well as anchors of their local communities.
What do we want?
The most important thing is quick action. At this moment in time, speed is of the essence. Existing support for business is useful, but we need more than just that. We need tailored additional steps to help social enterprises which have done so much to help our country and the people that they work with.
Beyond existing reliefs and discounts, we need tailored grants for social enterprises operated in difficult trading conditions.
We also need to have access to zero or cheap loans, not just commercial loans for those social enterprises that can pay back money over time, but are not in a position to do so right now.
There will also need to be in kind support to help digital working, restructuring and financial planning and other challenges that will emerge.
We have also spoken with government about creating National Insurance Holidays for staff working in frontline roles to recognise their hard work and to incentivize them to come into work.
The package that we are discussing would run into the billions, but this is nothing compared to the damage that could be done by the loss of social enterprises from our economy, the staff that would lose their jobs and the communities that would be impacted by their departure.
Now is the time to think big and we are pushing government to keep support for the sector coming.
We don’t have a monopoly of good ideas at SEUK. So if you have ideas that could help social enterprises, your community or the economy as a whole please contact me firstname.lastname@example.org