News

Now that the UK has slipped into an official recession, and with living standards stagnating, this week's Spring Budget will likely look to stimulate private sector activity. This is an opportunity to re-imagine how policy can support business, and to encourage the growth of more responsible and diverse models of business whose aspirations are aligned to the wider economy. The distinct challenges faced, the pressures these exert and the response of the business to succeed can vary enormously across the business landscape. This is especially true for social enterprise models, which already run against the grain of what is expected of a business by prioritising social and environmental missions alongside the need to make profit. However, much national policy remains uniform, and therefore unable to meet the needs of different business models. Efforts to support business growth in recent years have focused on a mixture of tax cuts, capital subsidies and rapidly designed support packages to address external shocks like Covid-19 and the cost of living crisis. Despite their growing prominence, social enterprises are often overlooked by government. For example, the flagship policy of full expensing (the scheme that allows capital investment to be deducted from tax bills) was hailed as the biggest cut to business tax in modern times, and critical for encouraging business investment. However, new Social Enterprise UK research has found that almost three-quarters of social enterprises have failed to benefit. It has been hinted that further tax cuts will be announced during the Spring Budget - but this is an opportunity to adopt a fresh approach. At present, policy is proving ineffective at supporting the growth of more diverse business models. Various policy levers are just waiting to be pulled by government, including: expanding green investment funds to help support the creation and growth of environmental enterprises, while facilitating the net-zero transition among the wider business community. reforming the tax code to incentivise private investment into social enterprises and other community businesses. implementing a Community Right to Buy Act that allows local authorities and the communities they serve to develop local assets that can stimulate economic activity and generate revenue. We cannot continue with business as usual. Social enterprises have proven resilient in the face of economic hardship, but they are failing to achieve their potential. Policy needs to be adapted to recognise that different forms of business not only exist but need specialist support. Recognition of this is the first step towards the creation of a more diverse, vibrant and impactful business community.

The latest Barometer in our Social Enterprise Knowledge Centre depicts a sector broadly optimistic for the year ahead, persevering in the face of economic uncertainty despite gaps in local and national government support. Every quarter we publish new findings from our Social Enterprise Advisory Panel to give a snapshot of key sector issues and trends across the UK. This latest survey explored social enterprises’ overall expectations for 2024, from reserves and profit making to staff numbers, as well as the potential impact of ongoing economic uncertainty amid recession headlines and the cost of living crisis. Social enterprise business expectations for the year are broadly positive; 64% expect turnover and staff numbers to either grow or remain the same, compared to just 50% of small businesses as a whole, and the vast majority expect demand for their goods and services to rise. However, many social enterprises are experiencing uncertainty, with local and central government income highlighted as a significant factor affecting their growth expectations. Many are unaware of and ineligible for support provisions like the Community Organisation Cost of Living Fund or VCSE Energy Efficiency Fund, and around half say their local authority offers no support for their business. We know that social enterprise is more resilient than other forms of business, as demonstrated in recent economic crises – but they also contribute more to society, so they need to thrive, not just survive. We’re calling for targeted government support to help social enterprises develop and expand, generating economic growth and shared prosperity. Creating an environment for social enterprise to thrive requires appropriate policy development. As part of our work in the Future Economy Alliance, we’re campaigning for a dedicated minister to lead bold reform and join up relevant policy areas, so the government can better support social enterprises and unlock our full potential. Click here to read the full report

The social enterprise community was shocked and deeply saddened to hear of the death of Dai Powell OBE, who passed away earlier this month. Dai was a true social enterprise pioneer and is probably best known for his time heading up HCT Group as chief executive, transforming it from a small community transport provider to a national social enterprise running bus routes and accessible transport services across the country. A proud Welshman and former coal miner, Dai joined HCT as a bus cleaner and worked his way up through the business, which grew more than a hundredfold over his 29 years there. Dai helped to show how a social enterprise can deliver public services at scale without losing sight of the business’ mission to support the community. The revenue from HCT’s commercial routes was used to fund transport services for the elderly and those suffering from social isolation, as well as to provide training and work opportunities for the long-term unemployed and people at the margins of our society. Dai was heavily involved in our work at Social Enterprise UK as a passionate advocate for the social enterprise movement. He played an active and important role on our board for six years and, up until his death, was actively involved in our governance. He was the Chair of the Disabled Persons Transport Advisory Committee from 2009-2014 and also chaired the Community Transport Association. In 2006, he was awarded an OBE for services to disabled people. Commenting on Dai’s huge contribution to our sector, our chief executive Peter Holbrook said: “Dai was someone who was deeply invested in social enterprise, Social Enterprise UK and growing our movement into a global force. He exemplified the values of social enterprise throughout his long career in the sector. He was revered and will be remembered both as an icon and founding father of modern social enterprise. He will be celebrated, remembered and missed. He was a real friend to so many people and respected hugely by those he met. He was joyful, insightful, easy and witty company.” Our thoughts are with Kate Markey, Dai’s partner, who we know will be suffering terribly in the wake of Dai’s sudden and premature death. We are forever grateful to Dai for the contribution and inspiration he gave to our movement over so many years.

Our new research with the University of Worcester compares the registration and dissolution of Community Interest Companies over the last five years to other businesses, finding interesting differences. Community Interest Companies (CICs) are a legal form for businesses whose activity benefits the community rather than being purely for private gain. Most CICs are social enterprises, so can be a useful way to look at wider sector behaviour. We found that CICs were dissolved, on average, at a lower rate than other forms of registered businesses. CIC registration is growing significantly and proportionately more than other business models, but CICs tend to dissolve at a younger age. Since being created as a legal form in 2005, CIC registration now stands at over 31,500 businesses - with a spike in new CICs during the Covid-19 pandemic, when many were created to help communities manage the impact of the virus. However, as the economy re-opened following the peak of the pandemic, dissolution rates rose and registration rates leveled off across the UK overall, despite variation in English regions and devolved nations To discover more of our research visit our Social Enterprise Knowledge Centre

Our latest report reveals that the UK suffers from a business monoculture - an economy dominated by firms that primarily exist to maximise profits, which encourages a short-term focus that can be damaging economically as well as socially and environmentally. We reviewed evidence from the five largest economies in Europe and found that the UK is an outlier, with lower levels of investment and employment in the social economy. Social enterprises and cooperatives deliver 14% of GDP in the Netherlands, 12% in Germany and 10% in France, but our social economy is only worth around 3%.  The research shows that growing the social economy in Spain's Basque Country and the Emilia Romagna region of Italy has increased GDP per capita and reduced inequalities. Overall, the data suggests that investment in people and capital tends to increase productivity, which in turn improves wages and living conditions. This means our European peers with bigger social economies enjoy higher wages and greater representation at work, while the UK struggles with weaker economic performance and lower working standards. We can and must change this. Our calculations show that growing the UK social economy, from the current 3% of GDP to be more in line with neighbouring countries at 12%, could: boost UK investment by £14bn (around 1% of GDP per annum)  raise average wages by up to £2,640 per worker  secure the Living Wage for 400,000 more workers   enable 75,000 more employers to train their staff  give 4.2m workers a real say in how their employers operate  improve work quality by widening access to initiatives like 4-day weeks and flexible working  have significant spill-over effects longer-term on the wider national economy, such as boosting productivity and living standards.  Social Enterprise UK produced this report with support from the Alex Ferry Foundation.

At Social Enterprise UK we run the Secretariat for the All-Party Parliamentary Group (APPG) for Social Enterprise, encouraging politicians to explore the impact of social enterprises in addressing key national policy issues. On 16 January the APPG hosted a discussion on social enterprise solutions to challenges in the UK food system, facilitated by Jo Gideon MP, highlighting Middlesex University research on how the sector can improve access to healthy and sustainable food. The gathering of parliamentarians heard from Prof Fergus Lyon, Dr Anastasia Loukianov, Dr Ian Vickers and Dr Doirean Wilson about how existing approaches have been largely unsuccessful in addressing poor dietary health and unsustainable food production. Social enterprises grounded in local communities offer an alternative to top-down public health initiatives, which can come across as patronising and jar with lived experiences of food poverty. Social enterprises involved in the research also shared their experiences. The Selby Trust spoke about their food hub, global garden and community café that provide fresh food to the local community and a garden space where people can grow their own food. Showing the harsh reality of the food crisis, in the last year they delivered food to over 12,000 people. The Ubele Initiative discussed their work on food sovereignty; they support Black and Minoritised communities through social prescribing work focused on growing food -making the link between healthy eating, community activity and mental health. The research also involves London Early Years Foundation’s nursery chef programme, as well as a local food hub and therapeutic growing work by Social adVentures. From health and care to early years education, community hubs and transport providers – this research shows how diverse social enterprises are finding innovative, empowering ways to transform the food system. The project is ongoing but its resulting report will be published on our Social Enterprise Knowledge Centre later this year. Wider discussion included conversations on the role of procurement and social value in supporting social enterprises working in this space, the need for better support from government for local food initiatives, and calls to make grants and other funding options more accessible. Commenting on the roundtable discussion, Professor Fergus Lyon said: “It was an honour to be invited to present to MPs and there was lots of interest about the role that social enterprises can play in tackling the food issues. It was also a great opportunity to bring together a range of thinkers on food issues and discuss how social enterprises can be part of the solution”.

On New Year’s Day, the social enterprise community woke up to the news that Nobel Laureate, Professor Muhammad Yunus was to be sentenced to six months in jail on charges of violating labour laws in his home country of Bangladesh. He is currently on bail pending an appeal. Professor Yunus is one of the true pioneers of the social enterprise movement crediting with lifting millions out of poverty through the innovative use of micro-finance, something which earned him the title of ‘banker to the poor’. The harassment and now sentencing of Professor Yunus has been condemned by fellow Nobel Laureates, global leaders and concerned citizens from around the world as being politically motivated. Amnesty International stated that the Bangladeshi Governments’ actions are “emblematic of the beleaguered state of human rights in Bangladesh, where the authorities have eroded freedoms and bulldozed critics into submission.” Not only is Professor Yunus an inspiration to social entrepreneurs around the world he is also a real friend of Social Enterprise UK, having spoken with and met some of our members at a reception in Parliament and also taken part in our online Social Enterprise Futures conference in 2021. Our Chief Executive, Peter Holbrook believes that not only is the persecution of Professor Yunus politically motivated but also point towards the real dangers faced by those who dare challenge the status quo, telling Pioneers Post that “if you really get close to achieving your mission [of] positively changing the world in a structural and systemic way, then existing sources of power will come after you.” Show your support and solidarity We’re encouraging our members to show that they stand in solidarity with Professor Yunus through sharing a picture of them holding a sign stating ‘I Stand with Yunus’ and then posting this on social media using #IStandWithYunus. Whilst work proceeds behind the scenes to fight for the overturning of this unjust sentence, showing that Professor Yunus is supported and appreciated by the movement he did so much to inspire will keep his case on the radar and hopefully help keep his spirits up. His team at the Yunus Centre are encouraging everyone to get involved and are in direct contact with him passing on messages of support. Please do show your support by taking this simple online campaign action.   You can also still add your name to this open letter signed by 188 global leaders created when the Bangladeshi Government’s harassment of Professor Yunus became apparent. Signatories include over 100 Nobel laureates, Barack Obama, and former UN Secretary-General Ban Ki-moon. To add you name email protectmdyunus@gmail.com.

We are proud to announce that pioneering social entrepreneur Joanne Anderson has joined us as an Associate Director leading our Social Value 2032 Programme. As the first female Mayor of Liverpool, Joanne spearheaded efforts to deliver social value for local communities, introducing and monitoring targets across local government contracts to make sure that procurement benefitted people and planet. Her achievements include setting up the first Black social enterprise community consultancy, Innervision, as well as leading community engagement policy work in the Crown Prosecution Service. She is also the founder of BlaST, a Black social traders network set up in 2021 as part of her work with the Kindred social enterprise community across the Liverpool City Region. Joanne brings nearly three decades of experience as an equality, diversity and inclusion practitioner to Social Enterprise UK, as well as a great passion for businesses that consider their social and environmental impact. Her new role will see Joanne helping us make the ambitious vision behind our Social Value Roadmap a reality, working to embed this pioneering approach to procurement across the public sector and in the UK’s largest companies. As well as driving forward the research and lobbying work of our Social Value 2032 programme, Joanne will host our next Social Value Leaders Summit in March 2024 for key cross-sector stakeholders to explore how this growing business movement can shape markets and organisational behaviour. Commenting on joining the Social Enterprise UK team, Joanne said: “This is going to show the nerd in me – I was completely excited and delighted to read the Roadmap! Every frustration I had around social value was labelled nicely in a report with a roadmap of what to do about it. Between my unique social enterprise and local government perspective, I’ve seen that there's just not enough understanding around social value. “Social value means ‘extra’; If you're a business that does something ‘extra', that has a positive impact on people, that's social value. You’re going to have an impact as a business and you can decide whether it's good or bad. Having a positive social impact on the communities and people around you are what makes the difference. “What's important is to get some standards around how we measure impact. I couldn't have been given a better Christmas present, really, than to get stuck in to try and lobby the next government about the real opportunities in using the Social Value Act - tackling our social problems at a local level and creating community wealth building. As a bit of a purist, I think all businesses can be good businesses. That's my vision, my utopia.” Find out more about our Social Value 2032 programme at socialenterprise.org.uk/evidence-policy/social-value-2032-shaping-the-future-of-social-value.