Government needs to nurture diverse social enterprises to drive UK recovery

A new generation of social enterprises – particularly female-led from a range of ethnic backgrounds – is harnessing the power of diversity to drive the UK’s recovery from the pandemic.

A new study from Social Enterprise UK reveals dynamic, community-led organisations are already making big strides in helping the country to ‘Build Back Better’.

Utilising the talents and experience of people from all sections of their ‘racialised’ communities – previously known as BAME – social enterprises, which are increasingly women-led, are delivering powerful social and economic impacts.

Produced bi-annually by Social Enterprise UK to explore the growth of the UK’s social enterprise sector, the report illustrates the extent to which they are providing leadership to areas left devastated by the COVID-19 pandemic.

The report reveals how a new wave of inclusive start-ups are better representing society.

Helen Burkinshaw, policy and research co-ordinator at Liverpool and Manchester social enterprise, The Women’s Organisation, says it’s time government gave the social enterprise sector the recognition it deserves.

She said: “Social enterprises should be given absolute parity with other businesses, particularly after the resilience they’ve shown in light of the pandemic.

“Seventy eight per cent of social enterprises are now regulated by the Department for Business, Energy and Industrial Strategy (BEIS). The Government needs to recognise that BEIS is the most appropriate department to oversee social enterprise and ensure its continued growth.”

Deputy CEO at The Women’s Organisation, Helen Milne, said: “We know, through our work with the Enterprise Research Centre, that social enterprises are critical to achieving a more environmentally sustainable business landscape. They are well ahead of the curve when it comes to integrating environmental policies given their commitment to delivering social outcomes across the board.

“It is notable, particularly post-pandemic, that despite huge economic and social challenges and difficult trading environments, social enterprises have continued to demonstrate impact, not just financially, but environmentally and socially.”

Helen Burkinshaw added: “The report from SEUK demonstrates that social enterprises are leading the way in terms of growth, job creation, diversity and inclusion, innovation and resilience – 44% of social enterprises reported increased turnover during the pandemic, compared to 18% for the rest of business.

“Almost half of social enterprises are led by women (47%) compared to only 16% for the rest of business, and 31% of businesses in the sector have directors from BAME backgrounds compared to a concerningly low six per cent for the rest of business. Additionally, one in five businesses in the sector addresses the climate emergency as part of its core social and environmental mission.

“So it seems absurd to me that barriers persist in preventing small to medium sized social enterprises starting or scaling up. I think certainly the lack of research and confidence in the sector is an affecting factor, but worryingly access to finance and investment is still a major problem.”

She says the top priority for Government is to give social enterprises much easier access to finance and procurement markets if they are to unleash their full potential and help drive the economic recovery.

Also, direct policy action is needed to help mobilise the social enterprise sector, and closer engagement with those businesses operating in the sector is critical if lessons are to be learnt and applied. Helen said: “This is particularly pertinent post-pandemic and is critical to any recovery strategy.”