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Social Enterprise

Volume 777: debated on Tuesday 10 January 2017


Asked by

To ask Her Majesty’s Government what assessment they have made of the value of social enterprise to the United Kingdom economy.

My Lords, this Government have a long history of supporting social enterprises as part of building an economy that works for everyone. Social Enterprise UK estimates that there are 70,000 social enterprises in the UK, contributing £24 billion, gross value added, and employing nearly 1 million people. Just under one-third of social enterprises work in the most deprived communities in the country, and 59% employ at least one person who is disadvantaged in the labour market. We are currently refreshing our own government estimates of the nature and size of the social enterprise market in the UK, and we will publish our research early in 2017.

Thank you, my Lord. I was very pleased to hear in the speech yesterday by the Prime Minister on the sharing society that she mentioned social enterprise on 10 occasions—so it looks as though we are in for a bean feast in the future of social enterprise. Unfortunately, the whole system is moving rather slowly. If you carry on at this rate, somewhere towards the end of this century we might be able to have a social enterprise industry that actually gets to the parts of society that big business cannot get to. Is it possible maybe to imitate the Scottish Government’s idea of having a 10-year strategy to look at ways in which to do social enterprise in every conceivable way? I myself look forward to the day when they can offer me a prison, because I would love to run one and I would do it better than Group 4.

Well, I know that the noble Lord has experience, and I would be interested to see him one day when he is doing that. As for social enterprise, we are strengthening it—and we are doing a lot to do that, including the Chancellor, who has increased the social investment tax allowance. I do not think that you can say that it is moving slowly when 1 million people work for social enterprises.

Do the Government have any plans to try to support social enterprise to employ ex-prisoners? This is an area where they fall down in terms of job opportunities. Is this not a unique opportunity? Should not the Government give financial support to setting up such enterprises?

That is a very good idea. The whole point of social enterprises and mission-led businesses, which are not quite the same thing, is to have a particular social purpose such as that one. I agree with the noble Lord that that would be an excellent thing. The Government are trying to enable more private, local authority and charity investment by setting up things such as incubators to do exactly the sorts of things that the noble Lord has suggested.

Does the industrial strategy referred to by the noble Baroness, Lady Neville-Rolfe, include a section on social enterprise?

I have not seen the White Paper or the Green Paper. I am sorry, but I cannot answer that at the moment.

When the Minister made his first response, I think he was quoting from Social Enterprise: Market Trends, a publication from BEIS on issues relating to social enterprise. He dwelt on all the good news, but I draw his attention to the bad news, which is that social enterprises,

“continue to struggle with accessing the finance they need”,

relative to SMEs and other businesses. It says that,

“Forty-nine per cent had difficulty … obtaining finance from the first source they approached”,

and that, overall,

“Thirty-one per cent of social enterprises got none of the finance they required”.

What is he going to do about that?

In order to increase the flows of capital to social enterprise in the United Kingdom we are strengthening the infrastructure of the market; for example, by setting up organisations such as Access that bridge the gap between social enterprises and social investors. We are working to open up social investment products to individuals by setting up an advisory group made up of senior representatives of the investment industry.

My Lords, will the Minister consider extending the scope of the social value Act so that social enterprises could bid more successfully for public sector contracts in goods, as well as for services?

Of course the noble Lord is correct to mention the social value Act. We are undertaking measures to improve that—for example, social value awards, implementation and measurement projects, and a cross-Whitehall paper to demonstrate our commitment to that Act. A panel of external social value experts is providing constructive challenge on the findings and I can tell the noble Lord that final drafting is under way and will be out soon.

My Lords, is this panoply of measures we have heard the Minister speak about within the ambit of shared responsibility, is it social enterprise or is it shared enterprise? Which one of the many things we have had given to us by the Government is it supposed to be?

I think the best thing to do is to read the Prime Minister’s speech to the Charity Commission yesterday.

My Lords, it may be that the Minister is not able to answer this question this afternoon, but it would be very useful for your Lordships’ House to have an update on what has happened to the substantial pool of unclaimed assets which originally assisted social enterprise but which now seems to have been put on the back burner.

Yes, I will have to write to the noble Lord on that because I cannot give him a detailed answer today.