Social Enterprise UK response to the 2026 Budget

Grid access, funding and revenue certainty are holding community energy back, an evidence session for the Social, Cooperative and Community Econonmy heard. Although many community energy social enterprises have been patiently plugging away for many years to create locally owned projects that yield a range of social and environmental benefits, they're now at the centre of a major government initiative. Established in law in 2025, Great British Energy (GBE) will invest more than £8.3bn over this Parliament to accelerate the country's transition to clean power. GBE's Local Power Plan aims to "revolutionise the UK's local and community energy sector". There are more than 600 community energy organisations in the UK, and more than half are community benefit societies, co-operatives or community interest companies, according to Community Energy England. Some 140 manage a community benefit fund, distributing almost £4m. They include Ambition Community Energy CIC, which, over seven years, built the tallest onshore wind turbine in England, in Lawrence Weston, near Bristol. The profit it makes from selling energy to the grid is being reinvested in the community, including helping local people experiencing fuel poverty. It will also support an Energy Learning Zone, the base for a skills academy for people aged eight to 80. As well as a just transition to clean energy, it was this kind of social value that attendees of the latest meeting of the All-Party Parliamentary Group for the Social, Cooperative and Community Economy wanted to see recognised. Chaired by Patrick Hurley MP, the evidence session brought together community energy groups, investors and national bodies, alongside Great British Energy and the Department for Energy Security and Net Zero. Attendees set out the obstacles holding the sector back, and their ideas for overcoming them. Connecting to the grid Ailsa Clark, founder of InspirAlba, a Campbeltown social enterprise that helps rural communities in Argyll and Bute build sustainable businesses, said the cost of joining the grid queue is a major barrier. To secure a connection, developers often have to put money down early, including financial security against the cost of network works, which they can lose if the project is cancelled. "Most community or municipal-owned developments are unable to take the risk of putting a big chunk of money down well in advance to get themselves in the queue," she said. Helen Seagrave, Director of Local Energy at Great British Energy, responded by saying that GBE is looking at how it can de-risk community projects, including by acting as a partner in them. Funding volunteer-led organisations Many community energy organisations are run by volunteers, and the Local Power Plan mainly funds individual projects rather than the organisations behind them. "I don't think we're going to get to scale if we're relying on the goodwill of fabulous people to give up their spare time," said Michaela Cryer, Managing Director of Younity (a partnership between Midcounties Co-op and Octopus Energy). "We need more paid support to really get these projects moving." Even established groups are stretched. Afsheen Kabir Rashid, CEO of Repowering London, said the co-op relies on grants for 90% of its income. "It's very hard to manage an enterprise based on project funding," she said. Revenue certainty To raise money through community shares, bonds or loans, projects need a reliable long-term income. The feed-in tariff used to guarantee that, but it closed in 2019. Its replacement, the Smart Export Guarantee, only requires suppliers to pay something above zero, and Contracts for Difference, which give large developers a guaranteed price for 15 years or more, exclude projects under 5MW. Deals with suppliers are short term too. "From a supplier's perspective, the market is only there for three years," said Barbara Hammond, CEO of Low Carbon Hub, who described the lack of revenue certainty as the biggest barrier. The difference certainty makes is clear in Kintyre. Fyne Energy, where Clark is a director, developed and built three community-owned turbines with a combined capacity of 6.9MW. They were projected to earn around £750,000 a year for local housing, employability and community projects, but are now making £1.2m to £1.5m a year. The turbines still receive feed-in tariff payments, which give them a guaranteed income floor, and they also sell their power. When wholesale prices soared during the energy crisis, that extra revenue went straight to the community. Measuring community wealth, not just megawatts Attendees argued that the Local Power Plan should be judged by the community wealth it creates, not just the megawatts it adds. Hammond said the plan is there "to scale that impact, not to scale the input". Matthew Vickers, CEO of Community Energy England, said community energy brings together "two streams of value that not many places do": benefits for the place, and for the energy system, because local generation can reduce the need for new grid infrastructure. The clearest message was that community energy should be treated as part of Britain's economic and social infrastructure, not simply another way of generating electricity. That means patient capital, investment in local organisations as well as installations, community ownership of larger schemes, public procurement that values social impact, and a clear role for Great British Energy. The evidence will feed into the APPG's inquiry, including the community energy chapter of a report due in 2027.

Survey respondents give strong backing for government supply chain diversity and reserving contracts below £1m for VCSEs and SMEs. Social enterprises also think the new definition of social value is too narrow. When we first published our response to the government's social value changes in August, we received a lot of feedback on social media, particularly on a post by our CEO Peter Holbrook. It was clear that members and stakeholders felt very strongly about this, and, as the national voice for social enterprise, we needed to represent those views to government. To clarify those views, we launched a survey. Open for a week, the survey had 95 responses; 66% of respondents told us they were social enterprises, 16% identified as charity or VCSE, 4% were cooperatives, and 14% of responses were from other kinds of organisations. More than two thirds of respondents bid for public sector contracts (70%), with a majority bidding for contracts under £1m (55%). The social value weighting for contracts for £5m or more doubled to 20% recently, but just 9% of respondents bid for these. The most common responses to the social value changes we initially received resulted in four main asks. We included these in the survey to ensure our stakeholders thought we'd got it right. They were: Reinstating supply chain diversity (listed in PPN002), as many social enterprises benefit from being subcontracted by suppliers winning larger contracts. Subcontracting transparency. Independent KPI verification, so that promises made on social value creation were kept. "Suppliers should not win contracts on promises nobody checks," wrote survey respondent Heidi Fisher of Make An Impact CIC,. £1m contracts or less offered to VCSEs and SMEs first. This was also reflected in feedback we got from the survey. DHU Healthcare, which provides a range of NHS services in the Midlands, wrote "Organisations such as Community Interest Companies are established to create community benefits and reinvest surpluses for social purpose. Procurement should provide a proportionate way to recognise the underlying business model and the social value it generates, alongside measurable contract-specific commitments." The four asks got strong support in the survey. We asked respondents to rate them from 1-5, with 1 being not important and 5 being essential. The average scores are listed below: New social value definition too narrow The survey also surfaced an additional recommendation for government. Whilst recognising that job opportunities and skills creation were important (and indeed, plenty of social enterprises are set up specifically to offer this), the new definition of social value was too narrow for our respondents. Several noted that it did not align with the Public Services (Social Value) Act, which requires commissioners to offer contracts producing economic, social and environmental benefits to communities. Mastercall Healthcare, which provides NHS services in the Northwest of England, articulated this very simply: "Social value should be defined broadly enough to recognise the full contribution organisations make to the communities they serve. In health and social care this should include reducing health inequalities, improving population health and wellbeing, environmental sustainability, community engagement and co-design, local reinvestment and support for vulnerable or underserved communities. Local communities should also have a meaningful role in defining what social value and local benefit mean to them." When we asked respondents if social value should be defined more broadly than jobs and skills, 73% said yes. What happens next? We’ll be delivering your recommendations to the government, along with a letter to the Cabinet Office, which has been signed by social enterprises that paticipated in the survey. The letter was addressed to Minister for the Cabinet Office Louise Haigh MP (pictured above with PM Andy Burnham and Business Secretary Jonathan Reynolds) and Mark Ferguson MP. Picture by Lauren Hurley / No 10 Downing Street, published under a Creative Commons licence.

Atif Choudhury, co-founder of award winning social enterprise Zaytoun and CEO of Calling All Minds has been awarded an honorary doctrate from SOAS for his substantial contribution to social enterprise and development. Zaytoun, which took home the Consumer Facing Social Enterprise of the Year Award in 2025, has been supporting the resilience of Palestinian communities through fair trade for over 21 years with all profits being reinvested to supporting those producers living under occupation in the West Bank. Calling All Minds is a newer social enterprise which provides neurodiversity and disability inclusion support through specialist human expertise and purpose-built accessibility technology.  Commenting on his honorary doctrate, Atif said: “For me social enterprise was never meant to make capitalism look kinder. At its best, it asks a much harder question: who is the economy actually working for? That question has run through much of my own work, from creating fairer routes to market with Palestinian farmers through Zaytoun CiC to removing barriers to participation for disabled and neurodivergent people through Calling All Minds. Inequality and exclusion are not inevitable. They are shaped by choices, systems and structures,C which means we can make different choices and build different systems. Social enterprise challenges us to build an economy rooted in community, where value is measured not only by what we extract, but by what we co-produce and what we enable people and communities to become.” “The future belongs to leaders who understand that inclusion is not about inviting people into old systems. It is about changing the systems themselves.” Find out more here