Tarem Services and Wates team up to tackle food insecurity in Kilburn Square

Today’s Budget marked a decisive shift to higher levels of public investment. After more than a decade of austerity, this is a welcome development. This is particularly on capital spend - but social spending investment is also crucial. So, the question now is how this additional spending can deliver a fairer, more sustainable, and inclusive economy. Resource spending in health and social care is crucial. There have been numerous occasions in recent years when social enterprises delivering critical, core NHS community services have been - and are still - unfairly excluded from government policies, programmes and funding. If the new government is serious about its manifesto commitments to prevention and community services, then it must recognise the essential role which social enterprises already play in their delivery, every day, up and down the country. Many social enterprises will be concerned with some of today’s announcements. The rise in employer National Insurance Contributions (NICs) will particularly impact social enterprises that create jobs, often for those furthest from the labour market. While Employment Allowance has been increased, which will reduce pressures on smaller businesses, this still raises questions over whether this is the fairest way to distribute the increased tax burden. Social enterprises that provide vital public services may be particularly impacted by the Budget. The minimum wage will rise alongside NICs. While social enterprises are committed to paying a living wage and offering better working conditions, those reliant on public sector funding may struggle with these additional costs if they do not receive a fair funding settlement from the public sector bodies they work with. However, there are clear signs that this is a Budget which recognises aspects of the contribution of social enterprises and other mission-led business models. Pledges to reform the taxation of Employee Ownership Trusts and deliver a strategy for growing the co-operative economy demonstrate that there will be more support for diverse, mission-led business models going forward. Social Enterprise UK will continue to work with members and partners to ensure the Government understands the needs and aspirations of social enterprise. We need investment, but we also need businesses that create high-quality employment, invest in their communities, and offer innovative ownership models that share wealth. We hope that the Chancellor will use her additional spending power to create the conditions in which social enterprises, as businesses committed to more than just profit, can thrive.

By Andrew O'Brien, Director of Policy and Impact at Demos “I am determined to do everything in my power to galvanise growth; determined for this country to be the highest growing economy in the G7 - that is our most important national mission.” These were the words of the UK Prime Minister, Sir Keir Starmer, at the Global Investment Summit earlier this month. It is no secret that the entire government’s political agenda depends on boosting growth.  But while Britain is desperate for growth after nearly two decades of stagnation, it needs to be a particular type of growth. Whether you call it good growth, inclusive growth or sustainable growth, we need growth that meaningfully improves the standard of living for working people. Our economy needs to grow not just by financial measures but in terms of social value – its contribution to local communities, its impact on individual wellbeing, its effect on the world around us. Take one issue: wages. Since the late 1970s, real wage growth significantly slowed down, from a healthy 5.5% per year to 4.4% in the 1980s right down to 1.6% in the 1990s. Despite the ‘Great Moderation’, it only ticked up slightly to 1.7% per year at the turn of the century, before the financial crisis led to wage stagnation and a permanent cost of living crisis. Growth also slowed in this period, but not as dramatically as wages. Median growth rates per decade fell by 24% from the 1970s to the 2000s, while wage growth rates fell by 70% in the same period. We made the wrong economic choices. We allowed highly productive, skilled industries to be replaced with lower productivity and insecure work. We oversaw an ‘extreme form of capitalism’ unique to the UK, where the ‘proceeds of growth’ went to a narrow group, both economically (the richest) and geographically (London and the South East). To be fair to the new government, they understand that they cannot just allow ‘growth’ to emerge organically; it needs to be directed. Their new Industrial Strategy says that “the government is committed to using the power of the state strategically to support and shape the UK’s economy and future growth”. Unfortunately, the UK has eroded state capacity over the past 40 years, and lacks the experience in steering markets needed to deliver good growth now. The new government’s position is akin to trying to win a Formula One race in a car that you’re building as you drive it. But there are tools available to help the new government drive inclusive growth – such as procurement, which it’s encouraging to see referenced in the new Industrial Strategy. The public sector is spending close to £400bn every year: 17% of UK GDP, and 14 times more money than the promised National Wealth Fund, reaching every part of our economy. There’s even more at stake in the private sector, where our largest businesses are spending billions on procurement every year. This presents an enormous opportunity to steer growth in the right direction, building a stronger but also fairer and more sustainable economy. If we can make better procurement decisions - spreading investment into social enterprises and SMEs across our regions, backing innovative new processes and technologies, and creating the conditions for long term planning and productivity gains - we can truly achieve good growth. This kind of focus on social value broadens decision making from short-term financial costs to factor in wider impacts, enabling the government to use procurement as a strategic lever for economic renewal. Central government‘s leadership role is critical; our whole economy is shaped by the standards they set, the organisations they buy goods and services from, and their appetite for risk. No other actor has the strategic capability to shape procurement, and unlock the full potential of social value, in the way that central government can. Early signs are encouraging. A review of the National Procurement Policy Statement is underway, including positive references to social value. Labour mayors are supporting ‘the social economy’ in London and Bristol, the VCSE sector in Greater Manchester and ‘business for good’ in West Yorkshire. The Procurement Act is due to take effect early next year, with an explicit government commitment in the new Industrial Strategy to using the legal framework it creates to deliver greater social value. However, social value must be a key tool for a mission-led government and a core part of their industrial strategy, not an afterthought. We need to create a national strategy for identifying the most socially valuable economic opportunities, encouraging their development, and rewarding businesses such as social enterprises that align to our shared priorities. The Social Value Act could be transformative, but there is much more that needs to be done, as outlined in our recent Demos paper ‘Taming the Wild West’. The government have limited economic levers they can pull to achieve good growth, and social value has a critical role to play in achieving their promised “decade of national renewal”. There is no time to lose.

Beth Vecchione, founder of the social enterprise Care to Dance, is running an ultramarathon just over 6 months after a car accident left her with a broken back to raise money for the care-experienced young people the organisation supports. Young people’s mental health is at an all-time low, exclusions at an all-time high and services unable to keep up with demand. For the 15th year in a row, the number of children in care has continued to rise; in March 2023, there were over 80,000 children in the system. Most of these children and young people will have experienced instability and trauma, and will be living with the effects of this, and finding creative ways to support them is crucially needed. So, to raise money for Care to Dance and the young people it supports, Beth set herself the challenge of not just recovering, but running an ultramarathon before the end of the year. Care to Dance uses dance to support care-experience young people - to help them feel a sense of belonging and freedom, but also to process what they’ve been through. By building inclusive communities where young people feel safe, are among people they trust and can express themselves freely, it aims to provide the stability and consistency they likely missed growing up and help them develop relationships built on trust so they have people to turn to. Beth, CEO and founder of Care to Dance, says “Breaking my back really brought home for me how hard it must to be to go through dark times alone without anyone to turn to or support networks to rely on. This is often the case for care-experienced young people. I’ve seen the transformational impact the Care to Dance community has for them, the improved mental well-being, motivation and self-belief. I want to show all our young people just how much is possible if you put your mind to it, what you can overcome with mental strength and determination, and people backing you. I want to support as many young people across the country as possible, especially at a time when so many young people are struggling.” Lucy, a young person who attends Care to Dance, says “Life was a struggle until I came to Care to Dance. I started to express myself and trust the staff. Learning new skills and being part of a team made me a brighter person. Care to Dance supported me at my worst, and inspired me to be my best. It made me a better human.” You can find out more about Care to Dance on their website, and support Beth’s fundraising efforts via her Just Giving page. Beth can be contacted directly at beth@caretodance.co.uk.