• Business leaders have come together to call for the UK government to give the social enterprise sector access to its “fair share” of support to fuel the post Covid-19 recovery.
  • The UK’s 100,000 social enterprises and co-operatives are businesses on the frontline of the UK’s poorest communities and employ those on the fringes of the workforce
  • #SaveOurSocents to #BuildBackBetter campaign calls on Government to stop social enterprises falling through the cracks in government programmes due to red tape

Research shows half the social sector could run out of money by June without further action from the state.

The UK’s social enterprises, co-operatives and community businesses are falling between the cracks of the current government schemes to support businesses through Covid-19. Despite working in the UK’s most deprived communities, employing vulnerable people and delivering critical health and care services during this pandemic, social entrepreneurs are being refused support while billions have been given out in grants to other businesses, including the UK’s casinos, betting shops and takeaway restaurants.

There are 100,000 social enterprises, which include co-operatives, in the UK contributing £60bn to the economy and employing 2 million people. A lack of adequate support putting half of these jobs (1m) at risk and the loss of these businesses will disproportionally impact some of the most vulnerable communities in the country.

Social enterprises are set up to reduce inequalities, primarily trading for a social or environmental purpose. They employ people who are homeless, employing people with disabilities and creating opportunities for people who have been excluded from the labour market.

Leaders from nine social enterprise support organisations have come together to call on the government to act or risk choking off the UK’s economic recovery before it has even begun, with a clear four-point plan.

Commenting on the campaign, Peter Holbrook, Chief Executive of Social Enterprise UK said:

“We all want to see Britain bounce back quickly from COVID-19, but red tape and penny pinching is at risk of killing off thousands of social enterprises that we will need to deliver our recovery.”

“Those places that are most at risk are, as always, our poorest communities and the most vulnerable in our society. These are the places and the people that social enterprises are based in and trying to help. Unless we get our fair share of support, we risk going under at exactly the time when we are most needed. Not only will this hurt those that have already suffered the most, but it risks seeing another decade of unequal economic recovery.”

“All we are asking for is our fair share of access to grants, loans and support, so that social enterprises can get through this crisis and help rebuild our communities. The Prime Minister, the Chancellor and the Government must show vision and leadership at this moment of national crisis.”

Mark Norbury, CEO of UnLtd, the Foundation for Social Entrepreneurs, said:

“Social entrepreneurs are among those being hit hardest by the impact of Covid-19. They are seeing vital income swept away, whilst working with and for some of the most vulnerable communities in society.

The government must seize this opportunity to ensure the longevity and resilience of a sector that is not only essential now, but will be at the heart of community recovery. Across the UK social entrepreneurs are adapting, mobilising and sustaining communities. We call on the Chancellor to get even more behind them, providing the financial support they urgently need.”

Ed Mayo, CEO of Co-operatives UK added:

“With one in two co-ops reporting to us that they are experiencing cashflow problems and a worrying 17 per cent listing ineligibility for any government grant as a major challenge to their survival, we want to ensure that co-operative and social enterprises don’t miss out.  Government has done great things in recent weeks. But in its efforts to protect businesses and workers it has left a number of dangerous gaps, affecting non-ratepayers, small businesses that cannot afford expensive new borrowing and too many businesses that trade for a social or mutual purpose.” 

Lucy Findlay CEO of the Social Enterprise Mark CIC commented:

“Social enterprises are part of the glue that holds our society together. They will now be needed more than ever to help rebuild a more resilient economy moving forwards. To not invest in them now risks huge holes in getting back to normal and will leave the most vulnerable without the support that they so desperately need.”

Supporting social enterprises and co-operatives will be key to emerging from the economic and social shock of Covid-19.

Social enterprises report being denied business grants and loans due to restrictive criteria and inappropriate rules governing loan requirements. This is despite the fact that the government has distributed £15bn in loans to businesses which trade solely for profit. Social enterprises have constitutional and legal checks on their governance which makes abuse far lower than in the private sector.

On top of this, social enterprises are delivering vital public services delivering front line health and social care services but are not getting the same financial support and recognition as their colleagues in the NHS. Social enterprises are not being given access to funding available to public sector providers and are struggling to get access to PPE and other equipment. Services that are supporting key workers such as nurseries are also struggling to access support.  

The groups taking part in the campaign have written a letter to the Chancellor with the backing of their members outlining the Covid-19 sustainability plan, calling for:

  • Expanded Business Grants for small social enterprises, those working in deprived communities or with vulnerable workers
  • Blended finance/zero-interest loans for larger social enterprises
  • Access to additional statutory funding for additional costs in delivering public services
  • Covid-19 Business Adaptation Support

In total this support package will cost in £45million per year in total, a fraction of the UK social enterprise sector’s £60bn contribution to the economy.

NOTES

  • The supporters of this campaign are: Co-operatives UK, Community Leisure UK, Locality, Plunkett Foundation, School for Social Entrepreneurs, Social Enterprise UK, Social Enterprise Mark CIC, Social Value UK and UnLtd.
  • Social enterprises are falling between different aspects of government support. Most social enterprises are not getting access to Small Business Grants – despite being our most deserving businesses. Commercial business loans are often not appropriate for our businesses which work in broken markets or where margins are small.
  • The organisations taking part in this joint campaign are – Community Leisure UK, Co-operatives UK, Locality, Social Enterprise UK, School for Social Entrepreneurs, The Social Enterprise Mark and UnLtd.

For a copy of the letter being sent to the Chancellor or more information please email Andrew O’Brien (andrew.obrien@socialenterprise.org.uk) or call 07889129971.