UK chancellor yet to impress social enterprises with business support measures
The UK government announced a long-awaited income support package for self-employed workers this week – which may benefit some social entrepreneurs set up as sole traders – but there’s still nothing specific for social enterprises in its business support package.
Andrew O’Brien, Social Enterprise UK’s director of external affairs, told Pioneers Post the measures announced last week by the chancellor Rishi Sunak (pictured top) to cushion the effects of the coronavirus pandemic on business were promising for social entrepreneurs and they sounded “very good on paper”. But he added that as detail had emerged, so too had various restrictions – and many questions from social entrepreneurs.
As June O'Sullivan, CEO of London Early Years Foundation, pointed out: "The measures announced by the government last week gave a false sense of comfort. Here we are with our 80% for furlough staff, talk of cash loans. But it's not straightforward. It's much more complicated and guidance is being designed and agreed on a daily basis."
- Read our full interview with June O'Sullivan about how London Early Years Foundation is adapting to the coronavirus crisis
There had been “huge confusion” among social entrepreneurs as to whether personal guarantees needed to be offered to secure emergency loans, with some banks continuing to be “incredibly cautious” despite the government confirming that this was not required, said O'Brien.
The job retention scheme is also presenting many social enterprise employers with a tough choice. This allows employers to claim for 80% of employees’ usual monthly wage costs if they are 'furloughed' – ie put on leave of absence.
But O'Brien pointed out that it wasn't a great choice for a social entrepreneur to either put your staff on leave while you stop or greatly reduce business activity, or keep paying out of your own pocket and risk financial ruin.
Social Enterprise UK is calling for another form of wage subsidy, the same support for social enterprises and charities as commercial businesses can access, and for grants to help save the UK’s estimated 7,000 start-up social enterprises which are particularly vulnerable to economic shocks.
P3 Charity CEO Mark Simms told Pioneers Post: "There has to come a point where the government recognises the work we and others like us are doing, with a grant."
- Read how Mark Simms has been leading P3 through big changes over the past four weeks
New grants and loans open up to Scottish social enterprises
Meanwhile, Scotland-based social enterprises can apply for aid from a new Third Sector Resilience Fund – part of a £350m package announced by Holyrood last week – which opened for applications on Wednesday.
The £20m fund is designed to support charities, social enterprises or voluntary organisations that need funding to stabilise cash flows as a direct result of the impact of Covid-19, and will provide grants between £5,000-£100,000. There’s also £5m available in the form of flexible, 0% interest loans, starting at £50,000.
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Header photo: Rishi Sunak, UK chancellor of the Exchequer, published under a Creative Commons licence