Budget 2021: Eight social impact leaders give their verdict
Rishi pickings... Did the UK chancellor give us loads of money – or just a lot of missed opportunities? Here’s what some of the UK's social enterprise and social investment leaders had to say about this week's Budget.
A failure to fix our broken economic model: Peter Holbrook, CEO, Social Enterprise UK
“The chancellor has spent a lot of money today in the Spending Review and Budget. Worryingly, we have not seen a credible plan to change the British economy so that we can deliver the transition to net zero and level up communities.
“We need to move on from business as usual to grow new forms of business that patiently invest in people, places and the planet. The power of better forms of business, such as social enterprise, hold the key to our future. Politicians need to rapidly educate themselves on the potential of social enterprise… We cannot put off fixing our broken economic model any longer.”
Community Renewal Fund absent: Vidhya Alakeson, CEO, Power to Change
“Today’s Budget from the Chancellor was underpinned by a recognition of the value of our social infrastructure – the buildings, services and spaces that build stronger communities. The announcements of investment in services and local government are all very welcome, but much of this is simply replacing services or spending lost over the past decade.
“We are disappointed that there is no mention of the Community Renewal Fund, which would have provided day-to-day funding for vital community services. I’m also disappointed to see that the UK Shared Prosperity Fund will not replace EU levels of funding until the end of the Spending Review period.
“Government now needs to build on some of the announcements made at the Spending Review through the forthcoming Levelling Up White Paper and put communities in the driving seat.”
Good news (sort of) on Recovery Loan Scheme: Stephen Muers, CEO, Big Society Capital
“We welcome the extension of the Recovery Loan Scheme, which has been critical in enabling social enterprises and charities to access affordable investment. However, we are disappointed in the reduction of the government guarantee from 80% to 70%.
“With many of the social enterprises and charities we support based in the UK’s most disadvantaged communities, this extension is vital in enabling the UK to level up. We hope the support provided by loan schemes like these will continue throughout the Covid-19 crisis and beyond – providing invaluable support for the communities that need it the most.”
- UK social enterprises and charities affected by the pandemic can now apply for a loan of up to £1.5m from the Recovery Loan Fund
A shrunken Shared Prosperity Fund: James Wright, policy officer, Co-operatives UK
“Government has allocated just shy of £30bn over four years to tackle the climate emergency, which is, arguably, rather modest. They expect private investment and consumer choice to do almost all the heavy lifting in implementing their new Net Zero Strategy. As we keep telling them, co-operatives are a proven vehicle for channeling private wealth into climate action and driving behavioural and societal change, especially at the community level.
“...The Shared Prosperity Fund will be much smaller than the EU development funds it’s replacing in the first two years. It will grow to £1.5bn in 2024-25, which was roughly the level of EU development funds per year in the last decade. A big chunk of the fund is now earmarked for a new national numeracy programme. While this could be a great initiative, it means an already-shrunken Shared Prosperity Fund will have even less for local economic development, business support and net zero... [But] the continued lack of detail might just be a sign that Michael Gove is serious about community power, and has officials working now to embed genuine community-led economic development into the design of the Shared Prosperity Fund. What is more, the real term increases in local government funding in England could create scope for progressive councils to support co-ops, particularly in specific areas like social care.”
A boost for social infrastructure? Will Thomson, policy lead, Social Investment Business
“A set of community-focused funding pots and tax reliefs were revealed, which will come as welcome news for charities and social enterprises. Those in the retail, leisure and hospitality sectors will be happy to see the 50% reduction in business rates, alongside further tax reliefs for cultural venues, museums and galleries. There’s also more funding for youth services, local health, community sports facilities and a levelling up fund for parks.
“It’s positive to see this investment into local social infrastructure that will genuinely make a difference for the sector and the communities they serve. Nevertheless, it does feel like a somewhat fragmented and piecemeal attempt to support local services and facilities, rather than a comprehensive plan for levelling up that fully utilises the social economy. For a government that wants to improve living standards, strengthen social fabric and boost community pride, this Budget feels like a missed opportunity to deliver a step change in how we invest in our social infrastructure.”
“...Something that was notably missing from the Budget was any plan to deal with the sizable SME Covid debt burden – an issue that we’ve been looking at through our debt-for-equity campaign.
Read more in Will Thomson’s blog on the autumn Budget.
A blurry picture: Kevin Armstrong, policy lead, UnLtd
“Overall, the Budget paints a pretty blurry picture of the future. Social enterprises may find it easier to find grant and investment from some sources, but not others. The public’s spending power will be improved slightly by some actions, but set back by others. Trade with local authorities looks set to get even tougher, but the availability of regionally and locally-focussed grants and investment may improve in some areas.”
- Read Kevin Armstrong's full analysis of the good news and bad for social businesses
“Beyond disappointed”: Maggie O’Carroll, CEO, The Women’s Organisation
“I am beyond disappointed about today’s announcement on Universal Credit. There’s been a lot of noise in recent weeks that we might see a U-turn on the decision to cut the Universal Credit uplift, which has painfully affected countless families across the country and disproportionately affected women. Unfortunately, we saw no such revision.
“In-work poverty is currently at a record high and the decision not to reverse the cuts to Universal Credit illustrates starkly how out of touch the Government is with the most vulnerable members of our society.
“The chancellor suggests that the reduction of the taper could see low-earning households up to £1,200 per year better off. However, by our calculations, those families are in fact likely to be £200 per year worse off through fuel spending alone – not to mention rising energy prices and predicted hikes in the cost of living in the coming months. It therefore feels a pointless gesture and we would urge the chancellor to look at this again as a matter of priority.”
- Read our interview with WISE100 leader Maggie O'Carroll
Welcome support for early years, but not enough: June O'Sullivan, CEO, London Early Years Foundation
“While I welcome many of Sunak’s promises such as confirming that £300m will go towards 'A Start for Life offer' for families, offering parenting programmes and help with perinatal mental health, an extra £82m funding to help create a network of family hubs around the country plus £150m to support and train those who work in Early Years (and more funding for holiday and activity programmes), we must not lose sight of how very important childcare is for the country’s infrastructure.
“This is very unlikely to make a dent in the shortfall which was identified by the Early Years Alliance at £2.60 a child, and I doubt whether it will reduce the cost of childcare for parents or make life any easier for the many small providers operating in areas of disadvantage trying to balance the increased costs of staffing. It’s not good either for those staff who are less likely to benefit from the training that enables them to deliver a high-quality service. This is a missed opportunity to try and level up those children already hammered by disadvantage.”
Top image: Rishi Sunak by Chris McAndrew on Wikimedia Commons
Editor's note: Updated on 29/10/2021 to amend a previously incorrect figure for the amount of funding to create a network of family hubs.
Thanks for reading our stories. As an entrepreneur or investor yourself, you'll know that producing quality work doesn't come free. We rely on our subscribers to sustain our journalism – so if you think it's worth having an independent, specialist media platform that covers social enterprise stories, please consider subscribing. You'll also be buying social: Pioneers Post is a social enterprise itself, reinvesting all our profits into helping you do good business, better.