What does Boris Johnson's new government mean for UK social enterprise?

Last week’s general election returned the biggest Conservative majority since 1987, a heavy defeat for Labour, and an unobstructed path towards taking Britain out of the EU. What now?

On 12 December, the Conservative Party won a thumping majority in the UK general election, kickstarting a five-year term under the leadership of Boris Johnson – and making Brexit, sooner or later, inevitable.

As the prime minister celebrated victory and the opposition licked its wounds, we listened to the thoughts of some Pioneers Post readers on the frontline of service delivery and in the heart of politics in the UK. After months of political stalemate under a minority government, the UK now has some certainty – but what might this mean for the social enterprise movement?  

New faces/old faces

  • Josh Babarinde, CEO of the social enterprise CrackedIt, unsuccessfully stood as a Liberal Democrat candidate for the London constituency of Bethnal Green and Bow. Labour candidate Rushanara Ali won the seat, which she has held since 2010. Ali is co-founder of the Social Innovation Exchange, a previous associate director of social innovation think tank the Young Foundation and vice chair of the All Party Parliamentary Group for Inclusive Growth.
  • Danny Kruger, former adviser to the Department for Digital, Culture, Media and Sport, and previously the government’s “civil society tzar”, became the new Conservative MP for Devizes in Wiltshire. Kruger founded Only Connect, a charity which supports ex-offenders, and is the son of celebrity cook Prue Leith.
  • Baroness Barran was civil society minister under the last government. As a life peer she didn’t have to stand for re-election, but, as yet, it is unclear whether she will remain in post in the new government.
  • Lisa Nandy, MP for Wigan and a former shadow minister for civil society, is currently reported to be considering a bid for the Labour party leadership.
  • Nick Hurd, one of the most long-standing ministers for civil society, who helped foster the growth of social enterprise and impact investing in the UK, stood down as Conservative MP for Ruislip, Northwood and Pinner at this election.


An opportunity to “reset” the economic system 

While the Labour and Conservative manifestos presented two extreme options, many saw the new electoral term as an opportunity to find a path towards a middle ground again, in which social enterprise can be a key player.

Baroness Glenys Thornton, shadow health minister in the House of Lords and a longtime champion of social enterprise and the co-operative movement, tweeted: “The headline that business as usual doesn’t work is as valid now as ever it was. So let’s work out how to do that together.” 

The British Council’s global head of social enterprise Paula Woodman echoed this, tweeting: “The need to get the message out – out of our various bubbles to the external world – is urgent. We also need more collaboration and standing together. The alternative to business as usual is multifaceted and, when added together, is already well advanced.”

In a statement, Social Enterprise UK CEO Peter Holbrook said the new government was an opportunity to take the country in a “fresh direction” and “reset” the economic system.

He added: “The prime minister has said that he wants to unleash Britain’s potential, to do that he needs to ditch business as usual… He has said he wants to lead a People’s government. It is time to back the People’s Business.”

“The prime minister has said he wants to lead a People’s government. It is time to back the People’s Business” - Peter Holbrook

UnLtd policy lead Kevin Armstrong commented that “unleashing” the country’s potential should translate into more support for existing entrepreneurs (such as Step and Stone, pictured above) plus “taking action to unleash the 10% of UK adults who have an idea for a social venture, but haven’t yet turned it into a reality”.

“Social entrepreneurs are true alchemists,” added UnLtd’s director of partnerships Nas Morely, “taking society’s urgent problems and their lived experience and making innovative gold to share with their communities and beyond.”


“A sigh of relief”

The Labour party, which had pushed for some pretty radical changes including to company ownership, suffered a bruising defeat. 

But while many in the social sector are deeply opposed to Conservative policies, not everyone in social enterprise and impact investment saw their win as negative. 

Ben Rick, managing director of social investor Social and Sustainable Capital, said some housing and social care providers had been anxious about what a possible Labour victory would mean for current outsourcing of care to external organisations. “I think many of them breathed a sigh of relief,” he said.

James Murphy, CEO of the Lincolnshire Community Foundation, told Pioneers Post the election outcome “gives people a direction of travel around collaborative working, rather than regressing to some of those old ways of redistribution that we know haven't worked in the past.” He was also positive about the continuity that would be achieved if Diana Barran remains in her pre-election post of minister for civil society. Her policy, said Murphy, “reflects maintaining and keeping what does and doesn't work and applying it into a big vision.”


Hope for left-behind regions?

Lee Healey, CEO of the social enterprise IncomeMax, which provides independent financial advice to low-income families, said the election campaign had left him “concerned about the continuing impact of things like benefit cuts”. 

He added: “We’d really like the prime minister Boris Johnson and his new Conservative government to prioritise helping families struggling to make ends meet, especially disabled people, parents with children, tenants and low income workers. For us, it’s business as usual again because there are a lot of families struggling financially.”

“For us, it’s business as usual again because there are a lot of families struggling financially” - Lee Healey, IncomeMax

But the Conservative manifesto, which set out a ‘new deal for towns’, building on its previously announced £3.6bn Towns Fund, is also being viewed with some hope.

Lincolnshire Community Foundation’s Murphy said he was heartened in the lead-up to 12 December by the “clear mention of working with those towns that had been forgotten in the past”, and was hopeful that new funding would support work “around place, co-creation, collaboration” and could be part of a “big idea” of a social impact sector sitting alongside the industrial and commercial sectors – “a real step forward”. 


Ending the Brexit uncertainty – and starting to heal?

Boris Johnson’s clear majority to “get Brexit done” should start to tie up the many uncertainties that have affected businesses of all kinds since the UK’s 2016 EU membership referendum. And a government that can (at some point) start talking about other things is no doubt good news for those waiting for what UnLtd’s Armstrong called the “as yet undelivered pre-election promises”, including reform of Social Investment Tax Relief, advances on embedding social value in procurement, and “fixing the crisis in social care”.

However, there are still concerns about what will replace EU funding. And a survey among social sector leaders by Charity Bank, published today, finds that almost half think Brexit will present challenges, while 46% are unclear and only 13% think it could create opportunities. One leader of a homelessness charity told the report’s authors, “I expect [homelessness] to increase significantly post Brexit.”

A survey among social sector leaders finds that almost half think Brexit will present challenges; only 13% think it could create opportunities

The Westminster government’s cooling enthusiasm for social enterprise in recent years (the UK dropped from third to 13th place in the most recent Thomson Reuters ranking of the best place to be a social entrepreneur) has not been mirrored in Scotland, where social enterprise enjoys a high profile among ministers from across the political spectrum. Scotland’s communities secretary, Aileen Campbell from the Scottish National Party, told Pioneers Post that her government would “maintain its long-term commitment to social enterprise in Scotland and encourage the UK government to support our approach”. 

But while the movement has flourished in Scotland in recent years, more than 40% of Scotland’s 6,000 social enterprises still generate an income of less than £50,000. “This small size can affect resilience and sustainability, particularly during periods of economic and political uncertainty,” said Campbell, adding that her government “will aim to support the sector through such times” with its second social enterprise action plan which is expected in April 2020.

Murphy said that while he’d sensed much anxiety about the outcome of Brexit in his region, the clear election outcome meant community organisations could now develop their work “with some degree of certainty of what’s going to happen next”. The UK’s network of 46 community foundations, of which Lincolnshire Community Foundation is one, makes around £100m worth of grants per year; more clarity “gives us an eye on the strategic direction of how we plan and how we give that away in future”.  

And Healey struck a philosophical note: “I really hope that the certainty we now have in Parliament can help heal the UK and make people happy again. The UK has so much potential. It’s always been a world leader and it’s time to invest again. I think social enterprise has a real part to play in the future of the UK economy and society wellbeing.”


“Holding the government’s feet to the fire” – while getting on with the job

Vicky Browning, CEO of charity chief executives’ body ACEVO said in a statement that the big changes in parliament did “not change what civil society exists to do or what we will be trying to achieve” – and that this included “holding the government’s feet to the fire on addressing the social, environmental and community issues which have been neglected for too long.”

Dan Corry, CEO at NPC, which supports charities, philanthropists, funders and social enterprises, echoed this, saying the government “must not continue to use Brexit as an excuse for delay and inaction. Its priority now is to get on with delivering its social promises, and to working with charities and funders who will have a critical impact on the health and wellbeing of the UK.”

Meanwhile, the core job of social change organisations will continue. As Debra Allcock Tyler, CEO of the Directory of Social Change, put it, “remember that positive social change isn’t dependent on governments”; while Heidi Fisher, founder of Make An Impact CIC, tweeted: “Remember that communities and impact are created by people with ideas to change the world, not by politicians.”


At Pioneers Post we will be closely following the new UK government’s policies relating to social enterprise and impact investment. Let us know your thoughts – find us on social media or contact us here.

Header image: Step and Stone, a Bristol-based artisanal bakery, which has a team of regular volunteers and young people with learning disabilities who hand-craft unique savoury crackers ('lavosh flatbreads'). Step and Stone is among the social ventures to have received funding and support from UnLtd.