Covid-19: Sector groups urge government to protect social enterprise

Current support measures are not enough to keep the sector safe, warn Co-operatives UK, Plunkett, Social Enterprise UK and others

Co-operatives UK, Plunkett FoundationSocial Enterprise UK and other organisations have launched a joint campaign for more government action to protect the co-op and social enterprise sector – “or risk choking off the UK’s economic recovery before it has even begun”.

Also signing the joint letter to chancellor Rishi Sunak are Community Leisure UKLocality,  School for Social EnterpreneursSocial Enterprise Mark CICSocial Value UK and UnLtd.

ln the letter to the Chancellor, they ask the UK government to give the social enterprise sector access to its ‘fair share’ of support to fuel the post Covid-19 recovery. 

“With one in two co-ops reporting to us that they are experiencing cashflow problems and a worrying 17% listing ineligibility for any government grant as a major challenge to their survival, we want to ensure that co-operative and social enterprises don’t miss out,“ said Ed Mayo, secretary general of Co-operatives UK.

“Government has done great things in recent weeks. But in its efforts to protect businesses and workers it has left a number of dangerous gaps, affecting non-ratepayers, small businesses that cannot afford expensive new borrowing and too many businesses that trade for a social or mutual purpose.“

From the start of the pandemic Co-operatives UK has been gathering information on how co-ops are affected and identifying gaps in government’s support. Data from its survey reveals that one in two co-ops (48%) report cash flow issues; almost 40% are having to furlough workers in order to survive; and 70% of co-ops express concerns about the medium to long-term health of their business.

Co-operatives UK added: “We are extremely concerned for the 17% of co-ops that list ineligibility for any government grant as a major challenge to their survival. We are also concerned for more than half of the UK’s 7,215 co-ops, which may be surviving now but will need better-tailored support in the months to come.

“We particularly share the concerns of the wider social enterprise and business communities that the Coronavirus Business Interruption Loan Scheme (CBILS) is not meeting their needs.” 

The joint campaign is urging govenment to::

  • Extend eligibility for the Small Business Grant Fund to all micro enterprises (annual turnover up to £632,000) that have a clear social purpose and reinvest the majority of their profits in that purpose 
  • Enhance the Coronavirus Business Interruption Loan Scheme (CBILS) for small businesses; and provide additional capital to social impact financiers, so that these can provide fast, patient, low and zero interest loans to co-operatives, mutuals and other social enterprises 
  • Ensure community benefit societies will be eligible for the £370 million of grants being made available for charities and social enterprises via the National Lottery Community Fund

There are 100,000 social enterprises, which include co-operatives, in the UK contributing £60bn to the economy and employing 2 million people. A lack of adequate support is not only putting  jobs at risk but the loss of these businesses will disproportionally impact some of the most vulnerable communities in the country, the campaign warns.

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