Thought Leadership

Anna Devitt and Pritam Josephs from the EY Foundation joined us to tell us more about Accelerate - a programme that supports young social entrepreneurs and social enterprises with a focus on supporting young people into employment, education, or enterprise. It provides 1:1 business coaching, tailored workshops & webinars, networking events and project support resources from EY. https://www.youtube.com/watch?v=B621wOwVKTA

14 September 2022 This webinar hosted by Alison Smith, CEO of social enterprise Roots HR looked at ways of how organisations can ensure their recruitment practices are fair and how they can limit unconscious bias from influencing decision-making. It also looked at what you can do to make the recruitment and selection process itself more inclusive in order to attract more diverse candidates. Listen to the recording below: https://www.youtube.com/watch?v=fIqx5SqalHY

After weeks of waiting, we now know what the new Government is going to do to help social enterprises, and other businesses, through the winter and the current energy crisis.   Here is a quick analysis of what all the announcements mean for social enterprise and what the next few months could hold for our sector. Energy price cap All businesses, voluntary organisations and public sector organisations who are on a non-domestic contract, a fixed price contract agreed on or after April 1st 2022, in the process of signing new fixed price contracts, on deemed/out of contractor variable tariffs or on a flexible purchase or similar contract will see a general discount applied to their bills. A price has been set for energy at £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas. A comparable rate will be set for Northern Ireland which is in an energy market with the Republic of Ireland. This rate compares with the expected whole cost of energy of around £600 per MWh for electricity and £180 per MWh for gas. So the announcement represents a significant discount. However, it is important to bear in mind: Your energy bill will still be going up – although the discount will substantially reduce the increase, bills will still increase. To give a sense of the change, the FSB calculated that the cost of electricity for businesses had increased by 349% between February 2021 and August 2022. Energy bills may still double compared to the previous year and it is worth planning accordingly. Your bill is also determined by how much energy you use, if you use more energy this winter for whatever reason, it could be higher still. This support is only due to last for six months – there is no guarantee that this will continue beyond March 2023 and you should plan accordingly. SEUK is calling for an extension until the energy crisis passes, but there is no clear indication from government whether it is going to listen to that advice. Energy bills are not the only things driving inflation – supply chain pressures, higher costs of materials, the fall in the value of the pound relative to other currencies and higher wages will all feed through into inflation. Inflation may be slightly lower than expected due to this announcement but is expected to be at historic highs for many months to come. Tax cuts to encourage investment and spending The “mini-budget” has also seen a number of tax rises cancelled that would have affected social enterprises. National Insurance – the national insurance rise of 1.25% has been reversed and the Health and Social Care levy has been cancelled. This will reduce the cost of employing staff, often one of the biggest costs of running a social enterprise. Corporation tax - the cancelling of the planned rise in corporation tax will mean that social enterprises generating distributable profits will be taxed at a lower rate than they otherwise would have been. For social entrepreneurs depending on the dividends of their business for income, this will provide some relief. Annual Investment Allowance – the annual investment allowance (the amount of corporation tax you can write off due to investment in plant or machinery) has been increased to £1m. This will help any social enterprises planning to make significant investments in physical capital over the next few years. Alcohol Duty – frozen for one year from February 2023. This will avoid any tax-related price rises for social enterprises running bars, pubs, restaurants or other venues selling alcohol or social enterprises which host events with alcohol. From a cash flow perspective, most of these measures are unlikely to have much effect (bar the National Insurance Cut). Cuts in corporation tax or increases in the annual allowance are good if you are generating distributable profits, but otherwise unlikely to provide significant help. There will be another Budget later in the year, however, where further tax or spending changes may be made. We will continue to ask for further targeted support to help the cash flow of firms, particularly around employment – which can help ease cash flow and support trading. Reforecasting and replanning Like all businesses, social enterprises will be reforecasting their budgets and developing new plans based on the announcements made and the general economic conditions. If your social enterprise faces financial distress, the most important thing is to speak to your clients, customers and networks as soon as possible. Funders and supporters may be able to help you, or you may be able to negotiate relationships with your clients or customers that reflect the new reality. The worst thing to do is wait.  Social Enterprise UK will continue to run webinars and provide information on ways that can help your social enterprise over the difficult period ahead. Keep an eye on your emails for these events and get in touch if you have any concerns.  A bumpy road ahead At the time of writing there is significant instability in the markets about these announcements and it is very likely that social enterprises are going to face an uncertain eighteen months. Has the Chancellor done enough to avoid recession? Will inflation come down next year? How long with the energy crisis last? These are questions we simply cannot answer. However, social enterprises have shown themselves to be incredibly resilient businesses over the past decade. Austerity, Brexit, COVID and now the energy crisis – it has never been easy running a social enterprise. At Social Enterprise UK we will keep doing what we can to champion our sector, call for targeted support to help the communities we serve and support social enterprises as best we can. Sticking together we will keep working for a fairer society and a greener future.

26 September 2022 A group of 30 large companies have spent over £250 million with social enterprises by bringing them into their supply chains through Social Enterprise UK’s Buy Social Corporate Challenge. Launched in 2016, the Buy Social Corporate Challenge was set up to encourage corporates to use their everyday procurement spend to create positive social and environmental impact. Starting with seven founding partners the programme has grown to include 30 large businesses ranging from pharmaceuticals to finance who have collectively spent £255 million with social enterprises in the last six years with the overall goal being to get to £1 billion spend by 2026. This quarter of a million spend with social enterprises is one of the key findings in the Year 6 Impact Report of the Challenge which is published today (26 September). The report also shows that the money spent by corporates through the programme has helped create 2,700 jobs and has helped social enterprises increase their impact and access new markets. Through trading with Buy Social Corporate Challenge partners social enterprise suppliers have been able to reinvest approximately £26.5 million into the social or environmental missions. One of the 1,030 social enterprises who have supplied Buy Social Corporate Challenge Partners in the last six years is NEMI Teas – a social enterprise set up to help create jobs for refugees. Pranav Chopra, the founder of NEMI Teas had this to say about their work with corporates through the Buy Social Corporate Challenge: “We are currently working with seven partners on the Challenge and are in consultation with two more. Hopefully we’ll be in a third of their partners’ supply chains shortly! It’s because of the Challenge that I’ve been able to directly reach out to other corporates. The Buy Social Corporate Challenge has been remarkable for businesses which have a social enterprise model and the capacity to deliver.” The report argues that not only does buying from social enterprises make a positive social impact, but that it doesn’t have to cost more: 90% of corporate partners in the challenge reported that social enterprises were cost neutral or even cheaper when compared with other suppliers, while 95% said that social enterprises delivered comparable or higher quality. Peter Holbrook, Chief Executive of Social Enterprise UK, said: “Following higher scrutiny by investors, stakeholders, staff and consumers, mainstream UK businesses are increasingly considering their social and environmental impact when they set strategy and make decisions. “SEUK welcomes this shift and we believe social enterprise has an important role to play in supporting the wider business community to embrace social value and consider the social and environmental impact of their work. “There is a group of businesses that are leading the way in leveraging their procurement in service of their purpose. The Buy Social Corporate Challenge (BSCC) partners are demonstrating effectively how their purchasing decisions can help them play their part in achieving a fairer and more sustainable economy. “What this sixth annual BSCC report reveals is that the Challenge is on track to deliver its ambitious £1 billion target, thanks to the commitment and vision of our corporate partners and the ability of social enterprises to deliver high-quality products and services.” The corporate partners on the programme are Amey, AstraZeneca, Barclays, CBRE, Co-op, Compass/Foodbuy, Deloitte, EQUANS, GSK, John Sisk & Son Ltd, Johnson & Johnson, KPMG, Landmarc Support Services, Lendlease, Linklaters, LV=, Mitie, Motorola Solutions, Nationwide, Nestle, NFU Mutual, PwC, Robertson Group, SAP, Siemens, Sodexo, The Crown Estate, Wates Group, Willmott Dixon and Zurich. You can read the full Year 6 Impact Report here

23 September 2022 Responding to Labour’s new National Procurement Plan, Peter Holbrook, Chief Executive of Social Enterprise UK, said: Social Enterprise UK has long been calling for social value to be beefed up in government contracts. Labour’s plan to prioritise the benefits for local communities and the environment in procurement is a big step in the right direction. It will send a powerful signal to businesses that everyone receiving public money has a responsibility to make our country fairer and our planet greener. The UK spends over £300bn through public procurement every year. The latest research by our Social Value 2032 programme, which brings social enterprises and businesses together, has estimated that we are missing out on over £50bn of added social value through smarter procurement every year. It is good to see Labour looking to close that gap and get value for money for taxpayers.

23 Septemeber 2022 Chief Executive of Social Enterprise UK, Peter Holbrook, said: The Government’s Plan for Growth sees the UK’s economic future being gambled on tax cuts in the hope that this creates growth. Evidence shows this will not work. With the risk of another painful recession increasing, we must look at building a different model. There are alternatives out there, and social enterprise is at the centre. We will continue to make the case for change because the country cannot prosper without it.

22 September 2022 Yesterday’s Energy Bill Relief Scheme is a vital intervention which will give our members some of the help they need over the winter months. The UK Government have published guidance on their website going into more detail about how the scheme works, information on how bills will be reduced and examples of how the scheme will be applied to different organisations.   Social enterprises do not need to take any action to access the scheme and support (in the form of a p/kWh discount) will automatically be applied to bills. The level of price reduction for each business will vary depending on their contract type and circumstances. You can read the full guidance from Government here  We will be following up with more information about what the scheme means for social enterprises shortly and will continue to work hard to urge Government to support social enterprises through the uncertainties the next few months bring.  

21 Septemeber 2022 Commenting on the energy bill relief scheme announced today, Peter Holbrook, Chief Executive of Social Enterprise UK said: This vital intervention from Government will give social enterprises some of the help that they need this winter. The cap will help our sector to protect jobs and investment in local communities, ensuring that they can continue to deliver their social and environmental missions. We now need the energy companies to deliver this discount quickly. Any delay could harm the cashflow of social enterprises and create needless distress. “However, this crisis is not going to go away. Businesses need more certainty to plan and to secure investment for growth, which is why it’s crucial that the Government swiftly clarifies what will happen beyond March next year. Until the energy crisis is resolved, the cap must be kept.