Blears to push Hurd on definition for social enterprise 2

Governance | Vibeka Mair | 2 Feb 2012

Labour MP Hazel Blears plans to write to minister for civil society Nick Hurd urging him to consider a statutory definition for social enterprise, after he recently confirmed that the government had no plans to introduce one.

Hurd had hinted at a statutory definition last year, in a parliamentary debate on the Public Services (Social Value) Bill where Blears called for a legal definition for social enterprise.

In response, Hurd admitted that such a definition could be needed in the future: “In terms of where legal definitions may emerge and the need for them, one has not perhaps been required up to now, although that may change.”

However, Hurd has recently confirmed, in a parliamentary question from Blears, that there are no government plans to introduce a statutory definition for social enterprise.

Blears told civilsociety.co.uk that she would be writing to Hurd to urge him to reconsider:

“I am extremely disappointed that the government have no plans for a statutory definition of social enterprise,” she said.

“Whilst I support government measures that aim to give social enterprises more opportunities to bid for contracts, without a definition there is a real danger that legitimate social enterprises will be shut out and services will be given to large companies masquerading as social enterprises.

“I know that many social enterprises want the introduction of a legal definition so that they can be reassured that they will get a fair deal from the government.”

Click here to read Vibeka Mair's in-depth analysis of the growing popularity of social enterprise.

Who's Who: Nick Hurd

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Robert Ashton
turnpike farm
2 Feb 2012

Surely, before defining 'social enterprise' there needs to be a legal definition of 'enterprise'. Is it a legal structure, an HMRC acceptance that you are economically active but not employed? Where does a hobby end and an enterprise start?

And what happens if you trade for a social purpose, generate all of your income from the services you provide and do not recieve grants. Which Govt department will close you down if you fail to meet some crazy legal definition? And will you qualify for benefits to replace the income you've been denied?

Lastly, is this driven by protectionism from within the narrow band of social enteprises that qualify to sport the SE Mark? Or is it (more likely) because Govt think if you cannot label it you cannot believe it to be genuine?

[Reply]

Debbie Galton
3 Feb 2012
Response to [Robert Ashton]

There is a lot of confusion over whether social enterprise is defined by the legal structure you are governed by or by having social aims etc etc. I believe the key difference from the Government's point of view should be what the organisation does with it's profits. As far as I am concerned, if your profits are used to pay shareholders/director's dividends etc rather than reinvested into the organisation or used to further your social aims then you are just a business....albeit one with a conscience :)

[Reply]

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