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Social Enterprise UK’s response to the Budget
Today’s Budget marked a decisive shift to higher levels of public investment – welcome after more than a decade of austerity. This is particularly on capital spend, but social spending investment is also vital. So how can 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 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 social enterprises already play in their delivery across the country every day.
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 this is a Budget that 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 do 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.
