Government review of legal framework for social enterprises could influence Budget

The Department for Work and Pensions has indicated it plans to lift barriers to growth in the social investment market

Department for Work and Pensions
Department for Work and Pensions

The government has been carrying out a review of the legal and regulatory framework for social enterprise, which could result in announcements in the Budget, the Department for Work and Pensions has indicated.

Social Justice: Transforming Lives, a report into improving social equality produced by the DWP last week, said the government was "reviewing the legal and regulatory framework for investment in social enterprises to ensure it supports the emergence of the social investment market, removing any unnecessary and unintended barriers to its growth".

Dan Gregory, of the social enterprise consultancy Common Capital, said in a tweet to the DWP Twitter account behind the report: "Interesting report esp. review of regulation on social investment. Presume HM Treasury leading + will tell us more in Budget?"

The DWP said in response: "Indeed. Watch this space."

The Budget takes place on 21 March.

Last month, Chris Leslie, Labour MP for Nottingham East and the shadow financial secretary to the Treasury, proposed amendments to the Financial Services Bill that would require the successor organisation to the Financial Services Authority to support social investment.

Last year, a report from the National Endowment for Science, Technology and the Arts and the law firm Bates Wells & Braithwaite said that the government should change the regulatory framework to make it easier for charities and social enterprises to attract social investors.

The report said that at present it is easier for a charity to ask for a gift than a loan from an ordinary man on the street.

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