Don’t let post-Covid crash kill us off, social businesses urge chancellor

The Co-op Group has joined 1,000 co-ops, social enterprises and community businesses warning the government that a million jobs are at risk

The Co-op Group has co-signed a letter from 1,000 organisations calling on chancellor Rishi Sunak to make sure that social enterprises and co-ops are given a helping hand to kick-start the national recovery from the Covid-19 crisis.

The letter from community businesses, social enterprises and co-ops warns that a lack of action is putting tens of thousands of social businesses at risk – posing a grave threat to the economy.

It says that one million jobs, 200,000 of which are in the poorest communities, could be lost over the next two months, with research showing that half the social sector could run out of money by June without further action. At the moment, they are falling through the cracks in the government Covid-19 support schemes.

The campaign is supported by sector bodies Co-operatives UK, Community Leisure UK, Locality, Plunkett Foundation, School for Social Entrepreneurs, Social Enterprise UK, Social Enterprise Mark CIC, Social Value UK and UnLtd.

The campaigners say: “Despite working in the UK’s most deprived communities, employing vulnerable people and delivering critical health and care services during this pandemic, social entrepreneurs are being refused support while billions have been given out in grants to other businesses, including the UK’s casinos, betting shops and takeaway restaurants.

“There are 100,000 social enterprises, which include co-operatives, in the UK contributing £60bn to the economy and employing 2 million people.”

Commenting on the campaign, Steve Murrells, chief executive of the Co-op Group, said: “Co-operatives and social enterprises have been critical to the wellbeing of local communities for years. They’re needed even more in this current crisis but some need a helping hand themselves to get though the emergency. With their fair share of government support today, they can be there to help kick start the national recovery tomorrow.”

Peter Holbrook, chief executive of Social Enterprise UK, said: “Hundreds of social businesses, including some of our biggest, recognise that we need to start laying the foundations for our recovery now. To bounce back quickly from Covid-19 we need our co-operatives and social enterprises to survive so that they can kick-start our local economies once the lockdown is lifted.”

He added: “Good businesses are days and weeks away from closure without additional action. The loss of these businesses will slow down our recovery, disadvantage our most vulnerable people and hold back our poorest communities. I hope that the chancellor will listen to UK business which are urging him to adapt his plans so that we can contribute to the national recovery.”

Social enterprises continue to report being denied business grants and loans due to restrictive criteria and inappropriate rules governing loan requirements. This is despite the fact that the government has distributed £15bn in loans to businesses which trade solely for profit.

Businesses have signed a letter to the Chancellor calling for:

  • expanded Business Grants for small social enterprises and co-operatives, particularly those working in deprived communities or with vulnerable workers;
  • blended finance/zero-interest loans for larger social enterprises and cooperatives;
  • access to additional statutory funding for social enterprises and cooperatives to cover COVID-19 costs in delivering public services;
  • bespoke business support for social enterprises and cooperatives to deliver Covid-19 Business Adaptation Support.

In total this support package will cost in £45m per year in total, which the letter points out is a fraction of the UK social enterprise sector’s £60bn contribution to the economy.

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