Civil society leaders call for key amendments to Financial Services Bill
Leading social investment and civil society organisations are calling for amendments to be made to the Financial Services Bill. They believe the amendments are key to the growth of the UK’s social investment market.
In a letter addressed to Lord Sassoon, Commercial Sectary to the Treasury and Minister in charge of the Bill, Social Enterprise UK CEO Peter Holbrook and other sector leaders outline amendments which, if successful, aim to kick-start a culture-change among the UK’s financial regulators, and call on them to consider the particular requirements of the social investment market.
The amendments were tabled at the committee stage of the Financial Services Bill on Tuesday. By encouraging the Financial Conduct Authority (FCA) and the Prudential Regulation authority (PRA) to support the social investment market, the letter’s signatories hope to create a financial landscape where investment in social enterprise and charities is commonplace.
Holbrook said: ‘The UK is plagued by both social and economic ills, and measures must be taken to make sure financial services support social ventures wherever possible. Social enterprises and other organisations working to solve society’s problems need the full support of government and the financial services sector. That starts with making sure that every layer of government policy fully embraces this new breed of investment.
‘The amendments proposed are part of steps we’re taking to create a level playing field for social enterprises and civil society organisations, who frequently run into trouble when trying to secure traditional investment. They can be penalised because of the blended return they offer. Social investment can often be the only way social enterprises are able to secure funding.’
Holbrook said UK social enterprises outstripped traditional small and medium enterprises (SMEs) last year in terms of growth – 58% of social enterprises grew last year compared with 28% of SMEs. Now they needed support and a fair crack at securing investment, he said.
‘We’re witnessing a sea-change in the way people invest their money. More and more are seeking a blended return – where their investment offers a social return as well as a financial one. With the launch of Big Society Capital early this year and the Social Stock Exchange due to open next year, it’s clear there’s huge demand for social investment from both the Government and investors. It’s imperative we keep up this momentum that’s driving the creation of a marketplace helping social enterprises to thrive.’