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Several social enterprise leaders recently met with government to share how they could be supported to create more jobs President Trump’s invasion of Iran and the associated financial tremors aren’t making it easy currently, but economic growth remains the government’s priority. Key to that will be a more resilient labour market, one that delivers secure, quality employment, supports career progression and includes those furthest from work. Despite facing challenges, social enterprises are experts in this field, so sector leaders recently met with Patrick Hurley MP to give evidence of how they could contribute to economic growth in this way. Evidence has shown that social enterprises are significantly more likely to employ people from disadvantaged groups and operate in left-behind communities, providing holistic employment support. They contribute to higher workforce stability and retention, improved wellbeing and productivity, and help reduce long-term pressure on welfare and public services. Yet it’s far from plain sailing. Leaders told Hurley of the difficulties they face, including short-term, cost-driven commissioning, barriers to accessing public contracts and the labour intensive (and potentially fruitless) work of applying for grants. Their experiences painted a vivid picture of what social enterprises can achieve, but also of the systemic failings holding them back. Opening the door to employment "We are set up to employ people that no one else will," said Half the Story founder Matt Parfitt, describing the ethos of his biscuit business. "We try to lower the bar for access, but only as a stepping stone to higher-value jobs. It's the holistic support - the culture, the coaching, English lessons for refugees, help with finances or housing - that changes lives, not just the job itself." Half the Story is now planning to replicate its bakery model in ten locations, proof that purpose-driven business can scale, without permanent subsidy. The business is philanthropically seed funded. Lucy Ferguson of Mediorite, a 15-year-old video production company, was candid about the pressures her organisation faces. "It has never been harder to operate as a social enterprise," she said. "The demand is growing, but how do you remain sustainable when fighting for funding against other charities and fighting commercial businesses for work?" Ferguson also highlighted an unpaid burden many social enterprises carry: "We are filling gaps between schools, the DWP, and the commercial sector, but we aren't getting paid for that extra support work." With labour costs rising and tenders coming in below market rate, Ferguson warned of a sector reduced to "fighting each other for crumbs left by the commercial sector." Armeena Athwal of Breakthrough echoed the frustration. Supporting ex-offenders and people with mental health issues requires intensive one-to-one coaching, yet commissioning often rewards the lowest bid. A recent three-day Ofsted inspection, "like being investigated by the police," she said illustrated the disproportionate scrutiny placed on those doing the hardest work with the most vulnerable people. How the government can support social enterprises Several practical solutions emerged. Ferguson argued that the apprenticeship levy should be reformed to cover wages, not just training costs, giving smaller enterprises the financial breathing space to bring in people who need time to develop. Athwal called for a culture change among large corporates and argued that government should, when awarding major contracts, hold suppliers to account for what they actually do to prioritise the social sector. Chair of the meeting Patrick Hurley noted that procurement officers routinely fail to use the powers already available to them under the Social Value Act, and signalled his intention to address this at national level in the coming months. The Skill Mill's Iciar Ania raised the importance of data. Her organisation works with young people who have offended, and has secured funding from the Youth Endowment Fund to run a randomised control trial across 22 areas but accessing data on employment and reoffending outcomes remains frustratingly difficult. Better data access, she argued, would help prove what works and unlock investment in what does. Cutting through all of it was a question about value. Not value for money in the narrow sense, but value in the broader sense - what society is actually willing to pay for. As Parfitt put it: "If it's just about price, it's a race to the bottom. We have to speak the language of value." He pointed to the Belu water on the table as a small but telling example: someone in procurement had chosen to spend more on water because the story behind it mattered. The ask from this group of leaders is not radical. They are not seeking permanent subsidies or special treatment. They want commissioning that reflects the true cost of supporting the hardest-to-reach, procurement that looks beyond the lowest price, and the kind of seed investment that allows proven models to grow. Done right, the returns - in reduced welfare dependency, improved wellbeing, and stronger communities  - would far outstrip the outlay. The evidence will contribute to recommendations in a final report to be published later this year.

Most lenders would reject an applicant with no track record of the project they needed £300K for. But WCVA is no ordinary lender. We spoke to one of the winners of the Social Investment of the Year award at last year's UK Social Enterprise Awards to find out how it happened. When Tai Heulwen CIC – the name translates from Welsh as "sunshine houses" -approached WCVA's social investment team, they had an idea about creating a children’s residential home, but not much more. No property in mind. No successful track record in that sector. Just a vision: to open a new residential home for children in care in Wales, run on social rather than profit-driven values.  For most lenders, that conversation might have ended pretty quickly.  "It was going to be 100% finance for a startup organisation," says Alun Jones, who leads WCVA's social investment work. "From a lender's perspective, you've got no guarantee it will be signed off by Care Inspectorate Wales as suitable premises. And you've got no guarantee the local authority will actually place anybody there."  The risks didn't stop there. With months of renovation work ahead and no income coming in, interest would simply roll up, meaning the borrower could owe more by the time they opened than when they started.  So why did WCVA say yes?  The legislation changing everything  Part of the answer lies in a seismic shift in Welsh policy. New legislation means that, within a five-year transition period, all residential childcare in Wales must be delivered by local authorities, charities, or not-for-profit organisations. To prevent profiteering from looking after vulnerable children, the private sector is out.  "The legislation is something of a challenge to the sector to make it work in a practical sense," says Jones. "It’s up to us as the sector to find some solutions. Somebody has got to start taking some risk. And we thought, well, why not us?"  WCVA had done something similar a decade earlier and knew it could work. But this time, Jones saw a smarter way to structure the deal, one that would dramatically reduce the risk for everyone involved.  The missing piece  WCVA was already lending to a second organisation: Community Impact Initiative (Cii), a social enterprise whose model involves buying properties, renovating them, and either renting them out long-term or selling them on. Cii had the skills, the experience, and critically: a strategic ambition to become a long-term property owner.  Jones put two and two together. "I said, why don't the two of you get together? Because this sounds like the perfect solution. I'll happily lend money to a builder who knows what they're doing."  The structure they landed on was elegant. Cii would buy and renovate the property to Tai Heulwen's specification. If it gained approval from Care Inspectorate Wales, Tai Heulwen would become the tenant, which suited them perfectly, since they'd concluded they were a childcare company, not a property company. And if approval was never granted? The enhanced fire safety spec, such as having sprinklers and reinforced doors was the only real difference from a standard residential home. Cii could rent it out or sell it on. The downside was manageable.  "Putting the two together took not all the risk, but a huge lump of the risk out of the whole process," says Jones. How the money works The final loan structure was split across both organisations. Tai Heulwen received around £120,000 to cover furnishings and the revenue costs needed to bridge the gap between opening and receiving their first council payments.   Cii received £200,000 over 25 years for the property purchase and renovation, secured against the building itself. Both loans carry an initial base rate of 7%, fixed for the full term, with discounts available for paying the Real Living Wage and committing to a climate action plan.  The plan is for WCVA to eventually hand Cii's loan over to Ecology Building Society (another socially-minded lender) once the property is tenanted and proven. That frees up WCVA's capital to fund Cii's next project.  The build has hit some bumps - a scaffolding contractor went under, causing delays - but the home is now expected to be completed by summer 2026 and will accommodate up to five children. Recognition on the national stage The deal caught the attention of judges at the UK Social Enterprise Awards, where WCVA, Tai Heulwen and Cii were named joint winners of the Social Investment of the Year award - the second time WCVA has taken the prize.  For Jones, the win meant more than the trophy. "We go under the radar a little bit and just bump along doing what we think is right," he reflects. "To go to a UK awards and win it — you go, actually, we've got a reasonable idea of what we're doing here." UK And with Wales's voluntary sector now tasked with filling a gap that legislation has created, WCVA hopes this deal is more than a one-off. It's a proof of concept and an example to governments everywhere of what can be achieved when socially minded investors and social enterprises work together.