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Social Enterprise UK accuses government of ‘watering down’ the definition of social businesses

13 May 2016 News

Peter Holbrook, the chief executive umbrella body for social enterprises, Social Enterprise UK, has criticised the Cabinet Office for not including charities and social enterprises in the scope of its review on mission-led businesses.

Peter Holbrook, the chief executive umbrella body for social enterprises, Social Enterprise UK, has criticised the Cabinet Office for not including charities and social enterprises in the scope of its review on mission-led businesses.

The Cabinet Office announced a call for evidence for its review into mission-led businesses earlier this week, but SEUK said that the advisory panel does not have enough experts on it  and that the review should be being backed by the Department for Business, Innovation and Skills.

Holbrook said: “It’s not uncommon for government reviews to disappoint, but it’s quite rare for a review to disappoint before it has even begun. Yet that is the view from many within the social economy sector at the government’s review of mission-led businesses.

“We acknowledge that social investment is a market with currently too few takers. One good response could be to improve the product. Another good answer could be to build capacity of start-ups to increase supply of investment-ready social enterprises. A further one could be to build awareness amongst commissioners to create more opportunities.”

The panel that the Cabinet Office has appointed is:

  • Nigel Wilson (CEO, Legal & General Group plc)
  • Natalie Campbell (founding partner, A Very Good Company)
  • Luke Johnson (founder and chairman, Centre for Entrepreneurs)
  • Loughlin Hickey (trustee, Blueprint for Better Business)
  • Andrew Goodman (partner, McKinsey & Company)
  • Marcello Palazzi (founder, Progressio Foundation)
  • Antony Ross (partner, Bridges Ventures)
  • Annika Small (co-founder, Centre for Acceleration of Social Technology)
  • Frank Welvaert (managing director, Johnson & Johnson Corporate Citizenship Trust)
  • Monique Villa (CEO, Thomson Reuters Foundation)


Holbrook added that “judging by the nature of the review team, the government intends to broaden the social investment market by watering down the definition of what 'social' is.” And that “ill-defined terms” only serve to “conflate and confuse”.

“All social enterprises and charities are mission-led but aren't included in the scope of this review; all our members are interested in profit and impact,” he said. “It will be difficult to communicate clearly as a profit-with-purpose, mission-led, community-business social venture - because not even the organisation itself will know what it means.”
 
“Quick fixes tend to turn out as bodged jobs. The expert advisory panel is missing authentic voices of recognised, established and trusted social businesses. Where are the historical insights of the likes of Timpson, Rowntree, John Lewis, Lush, and decades of Quaker-inspired businesses? Where are the voices of social enterprise and co-operatives bringing their expertise in the field? Let us hope that the review group draws on the experience of a wider set of perspectives. The insights of those who have set about protecting a social purpose, with or without success, is critical.

"It is crucial that we strengthen the social responsibility of mainstream businesses, which is why it is disappointing that the Department for Business, Innovation & Skills do not appear to be backing this review."

Announcing the review earlier this week the minister for civil society, Rob Wilson, said: “Mission-led businesses have the potential to revolutionise the way we solve some of our biggest social challenges. This review will help us find new ways to tap into their full potential, helping us to improve the lives of those in most need whilst creating a more compassionate society.

“I welcome as much input as possible into this review to make sure that we get this right. I want every entrepreneur to be able to easily establish a business that commits them to making social as well as an economic impact on society if they chose to."

The call for evidence closes on 8 July.

 

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