Levelling Up: UK social enterprises lament lack of new money to back government’s flagship policy
Levelling Up secretary Michael Gove gave a preview of the long-awaited Levelling Up white paper this morning. Here’s what we know so far.
The UK government’s flagship levelling up white paper contains no promises of new money to reduce the UK’s massive inequality between London and the south-east of England and the rest of the country.
A press release published this morning began to unveil some of the details of the Conservative government’s long-awaited levelling up policy which has been keenly anticipated by the UK’s social enterprises, co-operatives and community businesses. They claim they can play a key role in “levelling up” the country.
The white paper includes proposals to decentralise funding to regenerate communities, a review of the Community Ownership Fund and using local government pension schemes to invest in local projects.
The policy draft however doesn’t include any proposals for new funding, instead relying on allocations of money already made in the latest spending review.
The UK has been like a jet firing on only one engine
Levelling Up secretary Michael Gove said: “Not everyone shares equally in the UK’s success. For decades, too many communities have been overlooked and undervalued. As some areas have flourished, others have been left in a cycle of decline. The UK has been like a jet firing on only one engine.
“Levelling Up and this White Paper is about ending this historic injustice and calling time on the postcode lottery.”
The prime minister Boris Johnson said: “From day one, the defining mission of this government has been to level up this country, to break the link between geography and destiny so that no matter where you live you have access to the same opportunities.
“The challenges we face have been embedded over generations and cannot be dug out overnight, but this White Paper is the next crucial step.”
A flagship policy is to decentralise the management of the £2.6bn UK Shared Prosperity Fund to local areas. Announced last year, the fund replaces lost EU funding that the UK used to receive to support economic development and reduce inequality. It will invest to regenerate communities, support local businesses and help with skill-building.
The 440-page paper, which is due to be published this afternoon, will also say that £44m of dormant assets money will be used to support charities, social enterprises and vulnerable people. Pioneers Post understands the funding has already been announced and will come from dormant assets that are already available under the current scheme.
The social enterprise sector has long argued it had a key role to play in helping to reduce place-based inequalities in the UK, with chair of Social Enterprise UK Victor Adebowale saying the sector was “ready to rock and roll" with levelling up just last week.
Andrew O’Brien, head of external affairs at Social Enterprise UK, said the lack of new money was “disappointing” and that it gave “warning signs” for the future of levelling up, because “you can't achieve anything without investment.”
However, he said it was important to look beyond the money and focus on the “vision” of the government on how levelling up would be achieved. If the government recognised that the way business works is a problem, that would give social enterprise “something to work with” because it was a clear solution to the problem.
Stephen Muers, CEO of Big Society Capital, the UK’s social investment wholesaler, said: “Big Society Capital has many examples of social impact investment supporting social enterprises and charities in disadvantaged areas… There is a huge opportunity for the government to continue building on these successes to support its levelling up agenda."
Pension funds for local impact
One of the measures proposed is a new target for council pension funds in England to spend at least 5% of their £337bn of combined assets on local areas. This could potentially unlock £17bn to spend on housing and other infrastructure.
Last year, The Good Economy, the Impact Investing Institute and Pensions for Purpose published a white paper calling for some of the funds in the UK's 98 local government pensions schemes to be switched to "place-based impact investments". The co-founders of The Good Economy, Sarah Forster and Mark Hepworth, told Pioneers Post they were "very pleased" to see their recommentation picked up. "We look forward to working with stakeholders across the ecosystem to create a place-based impact investing market that brings real benefits to local people across the UK," they said.
- Read more: Institutional investors can help beat UK’s entrenched regional inequalities, new report finds
Anna Shiel, head of origination at Big Society Capital, also welcomed the proposal. She said: “Over the past decade we have seen first-hand how connecting private capital to the places that most need it has the potential to reverse the social inequality that is limiting horizons and harming our economy.
“We have seen pension funds increasingly supporting social impact in recent years – tackling a wide range of issues including homelessness and education. We look forward to seeing how the new target will further this trajectory.”
James Wright, policy officer at Co-operatives UK, said this morning’s announcements were “encouraging for the social economy”. He added: "It looks like the Levelling Up white paper will set government some vital new missions, for example on inequalities in pay, opportunity, power and wellbeing.
“If this is 'levelling-up', then co-operatives have a strong and distinctive contribution to make, because by design, we empower communities to create their own opportunities and wealth.”
The Pioneers Post team is closely following developments as the White Paper is published today. Check back soon for more detailed analysis.
Top picture: social enterprise Homebaked Bakery has played a major role in regenerating parts of Anfield, a left-behind neighbourhood in Liverpool
Thanks for reading Pioneers Post. 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.
