Thought leadership

Thought leadership

The importance of intersectionality – why it matters for social enterprises

To mark this year’s International Women’s Day, we asked some of our members, whose work focuses on achieving gender equality and empowerment, questions regarding their views on intersectionality.  Our social enterprises saw intersectionality as necessary for their services to represent the complex experience of the community they serve. They highlighted the need to listen and learn from diverse experiences, to be inclusive and respectful. What is intersectionality? Intersectionality is a useful framework for understanding the many kinds of discriminations individuals contend with. Its starting premise is that everyone is made up of multiple and layered identities, which includes gender, race, class, ethnicity, nationality, sexuality, religion, socio-economic backgrounds, and migration status. For example, A working-class bisexual woman may encounter discrimination based on her socio-economic status and sexual identity.  As advocates of gender equality, we have a responsibility to consider everything and anything that subject women to prejudice and marginalisation. The truth, however, is that operationalising intersectionality is complex. We tend to focus on identity dimensions we are most comfortable with. However, if our advocacy represents only the experiences of some women, we will fail to achieve equality for all women.  Intersectionality entails we identify the needs and consequently think about what resources we need to tackle the multiple discriminations faced by all women.  Few organisations have access to all the resources they need to operationalise intersectionality, but this is where collaborations with other organisations and individuals, to expand the base of resources, can help.  Here's what some of our members had to say about this important topic. Soul Purpose 360 CIC Interview with Palma Black - Founder & Director Soul Purpose 360 CIC Soul Purpose 360 CIC is a coaching, mentoring, training, and networking social enterprise for Black women in the community development sector. Their aim is to motivate, inspire and imbue confidence in women, to enable them to contribute positively to their communities. How important should intersectionality be to advocates of gender equality? For any individual or organisation advocating for gender equality, intersectionality must form the foundation, if it is to truly include and reflect Black women. Historically, the white-led feminist movement have failed in this regard.  For example, intersectionality is essential for understanding the unique challenges that Black women face, as well as for developing effective strategies for fighting for our rights. This is because Black women experience oppression and discrimination on multiple levels due to multifaceted aspects of our identity and an intersectional approach would recognise the complexity of this. Black women experience gender-based violence, institutionalised racism, and economic inequality, among other forms of oppression. Intersectional feminism allows us to recognise this. How can we be inclusive of everyone and respect all parts of a person's identity?  One of the most important things we can do to ensure inclusivity and respect for all parts of a person's identity is to practice active listening. That means really taking the time to listen to someone and try to understand their experiences and perspectives without judgment. Black women are not a homogenous group. We should also be open to having conversations about differences in gender, race, and other identities, and be willing to learn from and support each other. Additionally, we should strive to create an environment where everyone feels comfortable and accepted, regardless of their identity. What are the challenges that can sometimes be faced when using an intersectional approach? Some challenges that can be presented include feeling overwhelmed by the multitude of intersecting identities and experiences that need to be taken into consideration. Another challenge can be navigating conflicting perspectives in a way that is respectful and inclusive of all identities and experiences. Some may struggle with the idea of recognising the privilege that exists within the various intersecting identities, as it can be a difficult concept to grapple with. Ultimately, it is important to be aware of these challenges to better equip oneself with the tools necessary to use an intersectional approach in a meaningful and productive way. soulpurpose360.co.uk You be You Interview with Bilkis Miah - CEO & Founder of You be You You be You provides lessons, workshops and activities for school and parents, with the aim of breaking down gender-based stereotypes, with the aim to shift the perceptions of schools, families and children, to open possibilities for the next generation.  How important should intersectionality be to advocates of gender equality? We believe intersectionality is important. We’re layered humans with multifaceted aspects of our identity and intersectionality ensures we’re encompassing the whole person. How can we be inclusive of everyone and respect all parts of a person's identity? We can listen actively to people’s stories and learn from these lived experiences. What are the challenges that can sometimes be faced when using an intersectional approach? A challenge includes the complexity of trying to tackle multiple layers of discrimination. To what extent does an intersectional approach inform your organisational strategy? You are welcome to explain your experience. Intersectionality is at the core of our organisational strategy.  We must think about our communities and all the levels of prejudice they may face, in order to fully serve them. youbeyou.co.uk Butterfly Books Interview with Kerrine Bryan - Founder and Author of Butterfly Books Butterfly Books are a Social Enterprise that create children’s educational books. Their books are career-focused, aimed to inspire and educate children of the career options available to them, to reduce gender bias in job roles. Some of their books include ‘My Mummy is a Footballer’ and ‘My Daddy is a Nurse.’ How important should intersectionality be for advocates of gender equality? Intersectionality is very important as achieving equality, inclusion and diversity is complex. However, it can be difficult to address all problems with limited resources. For example, our children’s books focus on gender equality, and we try our best to address intersectionality through our illustrations as best we can. However, we believe that collaboration is an important way to consider intersectionality, through partnerships with organisations that have a focus in other areas. How can we be inclusive of everyone and respect all parts of a person's identity?  Through expanding our knowledge of other people’s cultures and genders. This can be through attending events, or reading literature that you wouldn’t normally. Additionally, understanding the community you serve is key. What are the challenges that can sometimes be faced when using an intersectional approach? One of the challenges is losing the impact you intended to create, by trying to spreadresources across too many areas. To what extent does an intersectional approach inform your organisational strategy? You are welcome to explain your experience. As a Black-owned business we are aware of the challenges faced regarding race. Although this is not the focus of our business, intersectionality affects us as business owners. Therefore, we are conscious of this when writing and illustrating our children’s books, with the aim of ensuring we represent the community we serve. butterflybooks.co.uk By Sabrina Doshi, supported by Dr Lilian Miles - Reader in Sustainability and Social Enterprise, Westminster Business School, University of Westminster

07 Mar

by Sabrina Doshi - Research Officer, Social Enterprise UK

Continue reading

5 min

Thought leadership

What is the purpose of social value?

Jeremy Nicholls is an international expert on social value and has written a paper on the Future of Social Value as part of our Social Value 2032 programme to stimulate discussion and debate. You can read the full paper here Jeremy’s views are his own and not representative of Social Enterprise UK or any of the Social Value 2032 partners. For those of us who think about social value in the context of the Social Value Act, the idea of social value is relatively new. For others it has been around a bit longer – rooted in the idea of value for society. Go back a bit further and economists, politicians and philosophers have been grappling with the question of value for society for a long time. The increase in the use of fossil fuels, the age of exploration – aka invasion, the enslavement of people whose countries had been ‘explored’ and the increase in the use of fossil fuels, alongside innovations in systems to manage all this; financial markets, accountancy, joint stock and later limited liability companies, all contributed to a rapid increase in global GDP.  All this drove, and still drives, more argument and debate over the nature of value. Arguments that became both revolutions and wars, over access to resources that drive capitalism and the distribution of the benefits that arise. And we built an economic system to allocate those resources to activities to meet those demands, And we talk as if markets had agency as opposed to being people, a few people in the end who either manage huge sums on behalf of others or own huge sums in their own right. Unfortunately we (I say we though I mean men) built an economic system on the premise that private financial returns will maximise wealth, a system where there is no feedback loop and no limit to that wealth – aside from there also being no control of its distribution - to the point that 1% of the world’s population own 52% of its wealth. So if social value is to be useful, it needs to be a vehicle for a more radical, systemic rethink of our economic system. It may be already too late to do this for so many people around the world, and the implications are coming closer to all of us. But it is not too late to redress some of this, to regenerate a damaged society or to provide hope for future generations.   We need to recognise that we allocate resources to activities that should meet people’s needs and that those needs relate to their well-being. This means realising that there is only so much well-being (currently largely measured still by wealth) that you can squeeze into somebody and that endlessly pursuing ever more wealth is no good for anyone. It means recognising that a living wage is one without endless worry and should not be a survival wage. It means recognising that dependency on supply chains where people work in conditions that are lower, much lower, than we would ever accept is a legal sidestep of responsibility as they are someone else’s issue. These are all issues that social value should address, and the international networks that promote and support approaches to accounting and management of social value seek to address. But they are also the issues that public sector accounting seeks to address, and that with a couple of small tweaks, even private sector accounting could address. Public sector accounting already references the purpose as being well-being. Charity trustees should already be able to evidence that the public benefits outweigh the negatives. Were it not for a private sector approach to accounting that allows obligations to be ignored, obligations that most people would, and company directors could, already be willing to recognise, it would quickly be much more aligned. Social value is a way that we can divert the corporation away from focusing purely on expectation of financial returns to an expectation of financial, and social and environmental returns. Ironically, despite the opposition from some, this more closely represents the real investor interest, the interests of you, me and wider society, not the “professional” investment managers. Remembering that the purpose of allocating our scarce resources is wellbeing, and that this means recognising how dependent we are on natural, social and human capitals, would allow us to align private public and charitable approaches to accounting, and to be held to account, even if indirectly, by the people experiencing the consequences of our private businesses and our public services. We could even unleash all our human creativity on a goal of contributing to sustainability (and those SDGs which would of course include financial returns). And we might find that sustainability, social value and multi capital approaches all share the same purpose of maintaining and enhancing well-being. Yes, I remain a resolute optimist, but these are all changes within our power, they are all systems created by people and they can be changed by people too. Public, private and non-profit sectors respond to the incentives that society sets in its legal frameworks. Small changes to these incentive systems - to the wiring behind the walls - can have significant consequences for how resources are allocated – to create social value. Some are already happening, like proposals around s172 of the Companies Act. Some changes will need to go further if we are to align incentives around well-being; changing the purpose behind international accounting standards, developing new public sector accounting standards and aligning accounting with cost benefit analysis. This is the future of social value.

23 Feb

by Jeremy Nicholls - Assurance Framework Lead for SDG Impact Standards at the United Nations Development Programme, Ambassador to the Capitals Coalition & Former Chief Executive of Social Value UK

Continue reading

4 min

Thought leadership

The State of the Social Care Sector: How did social enterprises respond to Covid-19?

Over the last decade the social care sector in England has seen unprecedented demand coupled with funding cuts and workforce recruitment and retention challenges. The Covid-19 pandemic added more pressure to already stretched social care systems. Recent research at the University of Birmingham has been exploring the contribution of social enterprises to the adult social care sector. As part of this research, we analysed data from the 2019 and 2021 ‘State of Social Enterprise’ survey focusing only on social enterprises delivering social care services (‘care social enterprises’). We looked at any changes in the sector immediately before and after the pandemic. Overall, the survey suggests that the care social enterprise sector responded positively to the challenges of Covid-19. Between 2019 and 2021, most care social enterprises not only survived, but we found generally positive indications of growth and reports of diversification and innovation. Whilst the pandemic created challenges for the sector, including financial difficulties – with 32% of care social enterprises reporting that they drew on their financial reserves and 20% having increased borrowing in response to the pandemic - most (68%) did not pass any financial burden on to their service users. Many care social enterprises surveyed reported that their annual income had increased; with almost twice as many organisations reporting an annual income exceeding £1m in 2021 than had done in 2019, although the actual proportion reporting income exceeding £1m was relatively small (just under 20% in 2019), with medium income of £100,000. More care social enterprises also reported making a profit in 2021 (56%) compared to 2019 (44%). An overwhelming 81% of care social enterprises surveyed reported that they changed their processes and/or ways of thinking in response to the pandemic. As well as adapting in response to Covid-19, care social enterprises were found generally to be dynamic; in 2021, 48% reported that they had expanded into new markets and 62% had developed new products. Many also reported that they had expanded the reach of their services, with over three quarters (78%) operating across more than one local authority area in 2021 (compared with 59% in 2019). Similarly, the number of employees in care social enterprises increased between 2019 and 2021 from a median of five to twelve employees, and more than two-thirds (68%) expected their staff number to growth further. Whilst the number of staff grew, staffing was affected by the pandemic with 42% of care social enterprises reporting furloughing staff, 44% asked staff to take on additional roles, and over half provided or switched to remote working.  The most common objective of care social enterprises was reported as ‘supporting vulnerable people’ and one notable trend over the last two years has been the prioritisation of adult mental health and wellbeing. Whilst this is reflected in the entire social enterprise sector [1], with nearly a third of the sector prioritising adult mental health and wellbeing as a main objective, a more dramatic shift is visible in care social enterprises with adult mental health listed as a priority objective by 27% in 2019, and more than doubling to 59% in 2021.  This is congruent with increasing demand on NHS mental health services post COVID19 [2] and supports the notion of adaptability and resilience in recent years in the care social enterprise sector. Care social enterprises therefore appear to have responded well to the COVID-19 pandemic. They are widely recognised as driving innovation and as having real expertise around their communities. These qualities may make them well placed to fill some of the gaps in statutory care and support, and in turn gain recognition as integral stakeholders in health and care systems [3]. In recent years care social enterprises have therefore proven their ability to adapt and innovate in response to changing demands and challenges.  Furthermore, they have continued to grow and remain profitable in the face of crisis.   [1] SEUK (2021) No going back- state of social enterprise survey 2021, https://www.socialenterprise.org.uk/seuk-report/no-going-back-state-of-social-enterprise-survey-2021/ [2] NHS Confederation (2021) Increase in demand for mental health support is being felt across the system, 25 October 2021, https://www.nhsconfed.org/articles/increase-demand-mental-health-support-being-felt-across-system [3] ADASS (2020) The voluntary and community sector in a world shaped by Covid https://www.adass.org.uk/next-steps-for-the-vcs-the-voluntary-and-community-sector-in-a-world-shaped-by-covid

16 Dec

by Kelly Hall, Kelly Hayward and Phil Kinghorn, University of Birmingham

Continue reading

3 min

Thought leadership

Conservative Party Conference 2022: A Tale of Two Parties

Keen observers of social media will have noticed that Social Enterprise UK attended the Conservative Party Conference this year, one that will live long in the memory for the news and content it generated. As with Labour, we were there to understand the future direction of policy and to raise awareness of the social enterprise sector. Social enterprise and levelling up Away from the headlines, there were some positive references to social enterprise and recognition of the value of the sector. On Sunday, the New Social Covenant Unit launched a new paper called “Social Capitalism” (covered in the Times and on Radio 4), authored by 12 Conservative MPs.   The paper made the case for investing in our social infrastructure, the local institutions that make up our communities, and treating it as seriously as our physical infrastructure (roads, railways, broadband). The paper made numerous references to social enterprises from the importance of social enterprises in maintaining this social infrastructure to social enterprises delivering public services in a way that listens and works with communities creating stronger bonds between people. This will require investment in the sector, reform to the way that we deliver public services and greater support for communities to develop social enterprise solutions. The paper was launched by the former Levelling Up Secretary Michael Gove and Dehenna Davison, the new Minister for Levelling Up, who both endorsed the vision outlined in the paper. We will be taking this forward to see if warm words can be turned into strong action to support social enterprises and realise their potential to level up the country. There were also positive references to social enterprises at a number of different events, particularly those organised by the sector such as those from Social Investment Business and Big Society Capital. Overall, there was a sense at conference that “enterprise” was the way to help communities to level up – although without a clear sense of what government was doing to stimulate this enterprise. No plan for growth or public services The centre piece of the conference was “growth” and how the government was going to deliver growth. It is clear that accelerating the growth of GDP is going to be the central focus of the government. The problem is that there is simply no plan to deliver it beyond tax cuts. Social enterprise is one of the fastest growing forms of business in the country, yet the ideological view from No.10 is that the business of business must only be business. There is no recognition that alternative approaches putting social and environmental purpose first could drive faster growth and generate greater resilience through encouraging long term investment in people and places. The main positive of the Mini-Budget and its fall out is that the shallowness of the position on tax cuts has encouraged politicians and the media to think more broadly. If tax cuts won’t work, what will improve our economy? The fact that noted economist, Kate Raworth, was invited to speak on Radio 4 in the wake of the Prime Minister’s speech is a recognition in the media that we need a national conversation on what drives growth beyond tax cuts and deregulation. Social enterprises will need to fight to be heard but for the first time in a while, a genuine debate is emerging. The other concerning area is public services. Under the radar of conference, the government announced that departmental budgets would not see their funding increase by inflation. Effectively that is a cut of £18bn for government departments and these savings will be passed through the system, with public services and welfare budgets likely to come under severe strain. Schools and hospitals alone are estimated to have to find £11bn in “efficiency savings” to make up for rising prices. Given the state of public services after a decade of austerity and the impact of COVID, this feels untenable. Backbench Conservative MPs were clearly worried about the impact of further cuts to spending and once Ministers face the reality of these spending reductions, some form of rebellion feels likely. However, the embattled state of the government means that there is no guarantee that this policy will be changed. Social enterprises delivering public services should plan for a difficult two years ahead. A tale of two parties The overriding sense of this conference was a party divided. On the one hand, those that have a more holistic view of society and the economy are concerned that this government is heading in the wrong direction. On the other hand, those that want to see government get out of the way and cut taxes for business feel that they simply need to stay the course. Their plan will work, if it is given time. In the middle are a lot of MPs and activists who do not know what to think. Who will win out in this battle, it is hard to say. Either way, Social Enterprise UK will keep engaging with politicians on all sides to recognise the value and importance of social enterprise for our future. The fastest way to grow our economy and have high quality public services is to grow social enterprise.

10 Oct

by Andrew O'Brien - Director of External Affairs at Social Enterprise UK

Continue reading

4 min

Thought leadership

Make sure social enterprises get access to £738m of dormant assets

As we wrote earlier in the summer, HM Government is running a consultation on how the English portion of reclaimed dormant assets should be spent (dormant assets being a financial product, such as a bank account, which has not been used for many years, and which the provider has been unable to reunite with its owner despite efforts aligned with industry best practice)The last round of dormant assets helped to create Big Society Capital and laid the platform for the social investment market. It created the Access Foundation. It created Fair For All Finance and the Youth Endowment Fund. These are all significant investments and interventions. Dormant assets matter.The consultation lasts until 9th October (this Sunday) and as promised, Social Enterprise UK has put together a template which you can download and send to the consultation – saving you time whilst making sure your voice is heard What do you need to do in five easy steps Download the template response.Insert the name of your social enterprise (Q2), the sector you work in (Q6) and the geography that your social enterprise operates across (Q8).Check that you are happy with the template response and add in any additional points you would like to make.Email dormantassetsconsultation@almaeconomics.com with a copy of the template and cc our Director of External Affairs - andrew.obrien@socialenterprise.org.uk so we can track response rates.If you are super-keen, you can also tweet @DCMS to tell them you have taken part in the consultation and you want dormant assets to help grow the social enterprise sector. Something like: I’ve taken part in the Dormant Assets Consultation 2022 because I want @DCMS to use dormant assets to invest in #socialenterprise through social investment and Community Wealth Funds. Once you have hit send you’ve done your bit to help the sector! What we are calling for We have two simple asks. One is for more money for social investment to address the issues raised by the Adebowale Commission on Social Investment.The Commission found that whilst social investment had helped some social enterprises, it had not fulfilled its potential due to a lack of flexible capital which could be deployed to provide “enterprise-centric” finance. It also found geographical and racial inequalities in the distribution of social investment.The Commission made several recommendations to address these challenges including the creation of a £50m black-led social investment fund to tackle inequalities faced by black-led social enterprises, putting more investment into place-led infrastructure and creating a “Frontiers Fund” to provide capital to give flexible finance into social enterprises.We need dormant assets to resolve these issues, to reform the market and get social enterprises the access to finance they need. Our second ask is to support the development of Community Wealth Funds. These funds would distribute locally administered pots of money which would be used to provide patient funding for social infrastructure – the community spaces and social enterprises that we depend upon and bring us together. This proposal is being championed by the Community Wealth Fund Alliance which includes Social Enterprise UK. We need to invest in our communities and dormant assets can provide some of the resources to do that.Both of these can be funded through dormant assets and they compliment each other. Don't miss your chance to have your say Unfortunately, just reading this email and nodding along won’t be taken into consideration by DCMS.The only way to have your say is to fill in their survey or download our template response and email it in (which will be quicker, I promise!).At a time when social enterprises need help to grow and sustain themselves, you can do your bit to help our sector get access to £738m of dormant assets.Don’t miss your chance to influence the decision

03 Oct

by Andrew O'Brien - Director of External Affairs at Social Enterprise UK

Continue reading

3 min

Thought leadership

Labour Party Conference 2022: Taking nothing for granted

This week the Labour Party gathered in Liverpool to mobilise its supporters, discuss policy ideas and develop their pitch to voters. It isn’t a secret that the mood in the Labour Party was very confident with events in the City and the financial markets only strengthening the sense within Labour that they could be on the cusp of returning to government. But what would a Labour Government mean for social enterprise? Would this be a new dawn for the sector? Don’t frighten the horses If there was a theme for the conference (beyond the strapline: A Greener, Fairer Future) it was responsibility. Labour wants to be seen as responsible stewards of the public finances. They want to be seen as responsible custodians of the NHS and public services. They want to be seen to be responsible on climate change. This responsibility manifested itself as a desire to avoid doing anything that could spook the media or business. Yes, Labour would create a new energy company – Great British Energy. But it will not sell energy directly to customers, that will remain with the current market providers. It won’t be nationalising any existing companies, it will work in partnership with what is already there. Yes, Labour will create a new National Wealth Fund, taking stakes in the projects the state invests in. But this is not new money. It is essentially a sub-section of the £28bn Labour has already promised on net zero. Yes, there would be more money for the NHS – but it would be funded by reversing the scrapping of the 45p tax rate – worth around £2bn a year or 1.4% increase. This is not to say that these are bad ideas. Far from it. However, those expecting that a massive poll lead was going to unleash radicalism or significant investment in public services are misjudging the mood. At the moment, the closer that Labour feels to victory, the more cautious the party becomes. All business is good business? Social Enterprise UK attended a number of events and discussions at the Conference on business. The mood was generally positive. Labour wants to collaborate with business and businesses, seeing the way the wind is blowing, want to collaborate with Labour. Again and again the phrase “partnership with business” echoed throughout the meeting rooms. Labour would not “lecture” business. Labour believed that businesses want to do the “right thing”. But do they? Is all business good business? Business can be a powerful force for good, but that does not mean that all businesses are interested in unleashing that potential. This is where Labour needs to be more sceptical and look back on the performance of the British economy over the past forty years. If business as usual really worked, would we be in our current situation?  In parts of our sector, there is a view that given the alignment between the values of Labour and the values of social enterprises, a future Labour Government would naturally be a strong supporter of social enterprise. Investment and support will naturally flow from their electoral victory. The truth is more complicated. There was some good news at Conference. Social enterprises were referenced in Labour’s new industrial strategy, as was social value. The Deputy Leader of the Labour Party, Angela Rayner, announced higher standards in public procurement – which we understand will include strengthening social value to help more SMEs and social enterprises. However, we still have work to do to convince Labour that talking about and investing in social enterprise is not rebuking the rest of the private sector, it is a pro-business measure. We have to remove that hesitation and get Labour to see social enterprise for what it is – the fastest growing form of business in Britain, firmly in the mainstream of our economy. Labour should not be worried about social enterprise, it should embrace it. If we can do this, we can get the investment and support our sector needs and make our economy fairer and greener for all. That will be Social Enterprise UK’s mission from now until the next election.  

30 Sep

by Andrew O'Brien - Director of External Affairs at Social Enterprise UK

Continue reading

3 min

Thought leadership

Support for social enterprises through the winter

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 Sep

Continue reading

4 min

Thought leadership

Responsible fashion, more than a passing trend

Problem 1: Historically, in manufacturing, the value-added activity has been prioritised to the Global North. Hence the wealth gap increases. This leaves individuals and communities in places like Kikambala, Kenya, with very little control over their own economic path. Problem 2: The textile industry has a responsibility to clean up its act. Enormous swathes of polyester and energy consuming materials are produced to satisfy an increasingly fickle market of consumption in the global north. All this production takes energy, resources and often denatures water and fertile land (let's not forget recycling clothing takes energy too). Fashion Revolution Kenya worked with the British Council in 2020 to investigate what materials really are the most efficacious and least environmentally damaging to produce apparel. They looked to establish the pros and cons of each fibre and where improvements still needed to be made. The fibres were nettle, flax, pineapple, banana, hemp, water hyacinth, sisal, cotton, silk and fish leather and wool. A lot of these do not produce suitable fabric for garments but it's worth having a look at this paper because the options are exciting! The latest evidence points to the use of cotton but not in its traditional sense of landscape changing vast production that harms environments and livelihoods. However, the Report does highlight, along with other cutting edge non biased research such as the Transformers Foundation's Cotton Myths Debunked, that a sustainable solution is to overcome the issue of water consumption (an oft-quoted criticism of cotton) by ensuring production is catalysed by rain water rather than mass hectares of irrigated land: 'A shift to mainly or solely using rain-fed cotton is a tangible solution when looking to create a more sustainable industry.' When looking to establish our own supply chain from the get-go, it took time. We had to make sure we were making the right choices. This included country of origin, textile of the garment, materials consumed, methods employed, dyes used, pesticide consumption, quality of garments, nature of factory and finally, conditions in which the garment workers worked. Let's come back to that in a moment. So, having done our research, we settled on rain-fed cotton, using an absolute minimum of pesticides along with natural water-based dyes that would not denature water, and we would go to establish the ethics of production ourselves as cottage industries in Kenya have yet been unable to establish the expensive 'Organic' certification, albeit in planning. Environmentally satisfied we were doing everything possible to tackle problem 2, back to Problem 1! We needed to find a way to ensure clothing was being produced in a way that was respectful and even beneficial to those working in the supply chain. This needed to include ensuring basic employment rights such as maternity leave, secure contracts and protection from unlawful loss of employment. It also meant looking at working conditions to make sure that harmful materials were not being used, that working hours were not exploitative and that the factory was at a temperature which was not detrimental to health. Finally we also needed to ensure that workers had the opportunity to progress and develop. According to a 2019 Oxfam Australia report, 9 out of 10 garment workers felt that their income is not sufficient or partially sufficient to meet their needs and, as a result, 87% of workers take loans from the local shop to fill their income expenditure gap. Fashion companies are forcing this to happen and consumers, all too often, don’t pay attention to the detail enough to see the harm caused in the production of their new garments. In the fiscal year 2021-22, Next Plc (the UK’s largest fast fashion brand) reported a profit of £823 million, up 140% from the previous year. With some years of experience under our belt, we have come to a certain conclusion in fashion: If an organisation is not talking about the good things they are doing, they aren’t doing them. Basically, as consumers, we should be asking the hard questions. So, in researching our new supply chain, when we approached factories and organisations who could not explain to us their employment methods, their conditions of working or whether their employees were paid above the living wage, it was obvious to us that the organisation does not align with the ethics of Origin. We simply did not work with them. However, after lengthy research and really at a point when we felt ethical production in Africa may well not be possible for Origin clothing, opportunities began to spring up that offered hope. We began to see this may be possible and may actually happen. Working with garment factory SOKO Kenya in Kikambala and farm-to-fabric business Tosheka Textiles in Wote (both female-led businesses that emphasise female opportunity every day) one can see the unquestionable opportunity generated by good employment. Women are paid above the living wage, given appropriate training for personal and entrepreneurial development and are respected to pursue their own path for establishing themselves and ensuring a bright future for their families. With such an empowering culture for women, we decided we had to work with them. When profits are generated from this clothing, we share the profits equally with each step of the production process. This means that garment workers and their communities directly benefit from a greater proportion of value-added activity in the production process of the garments they actually made, thus fighting the enormous inequalities that have historically come from large companies keeping the poor down by extracting low-cost goods and adding all that value in the Global North. It is proven that for every woman that is lifted above thefinancial poverty line, she brings 7 people with her. Now, why? Well, as Sven Beckert explains in 'The Empire of Cotton', it is curious that after millennia of equal development in the Global South and North, what academics refer to as the 'great divergence' occurred at a time when cotton's properties were being fully discovered and utilised to propel clothing into a massive world changing engine. The previously Southern industry of cotton was usurped by an increasingly Europe-centric business class and the seeds were ironically sown for this 'great divergence' to create a rich Global North at the cost of the Global South. Our supply chain methods directly combat this damaging skew. We believe fashion has a responsibility to reverse the deleterious effects it has had on the Global South. The opportunities generated within our ethical and responsible supply chain are the weapon we can use to pursue that change and, as long as brands stick to the principles that make a social enterprise (or truly ethical brand), we can fight that battle together for as long as Origin keeps trading originafrica.co.uk

20 Sep

by Tom Cracknell - Co-Founder Origin Africa

Continue reading

5 min

1 2 3 1 of 3