Tuesday, 12 May 2009

A new dawn for UK social enterprise?

Amid all the talk of government help for business in this time of recession, it's about time social enterprise got a mention. Thankfully that moment arrived today with the government's Social Enterprise Summit.

A press release arrived in my inbox this morning proclaiming the summit signifies "unprecedented government support for social enterprises". Strong words but let's hope the impact of the measures prove as such.

Announced was a new ministerial working group to ensure a "level playing field" for social enterprises and charities to compete for public sector contracts, a new guide to social return to help public service leaders understand the social value that social enterprises can bring to local society and a £45.6m Futurebuilders Investment Plan to help social enterprises deliver public services, through a new fast-track investment process.

Mandelson also revealed that changes to the Enterprise Finance Guarantee Scheme (EFG), the initiative set up to provide bank loans to small businesses struggling to secure finance because of the economic downturn, will free up £20m to social enterprises in disadvantaged areas.

All great stuff but now the hard work begins.

The headline grabbing announcements are all very well and good but they're worth nothing if they don't get to the social enterprises they are designed to help.

The EFG has already received extensive criticism from businesses that loans are still hard to come by mainly because of confusion about the system among bank staff. We're told that £344m of eligible applications from 3,071 businesses that have been granted, are being processed or assessed, while 2059 firms have been offered loans totalling over £186m.

A good start but much more is needed.

Like Liam Bryne himself said, social enterprises are well placed to help the disadvantaged.

The traditional, excessive risk taking and massive profit making way of doing business has let us all down; now is the time for social entrepreneurs to seize the opportunity and prove that an ethical, sustainable approach to business is the future. It's not tree hugging; it's business. But it's business that generates social change.

The press release informed me that the "lessons from the summit will be taken forward across government". I'd certainly be keeping an eye on that one.

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