Social enterprise leaders have called on the government for urgent support amid fears that half the organisations in the sector could run out of cash by June.
A joint letter signed by the leaders of organisations including Social Enterprise UK, Co-operatives UK and the local charity body Locality warns Rishi Sunak, the Chancellor of the Exchequer, that social enterprises are “falling through the cracks” in support offered by the government to tackle the effects of the coronavirus pandemic.
“We are concerned that gaps in the government’s economic support package are putting the country’s recovery at risk,” it says.
“Social enterprises contribute £60bn to the UK economy and employ 5 per cent of the UK workforce.
“Yet these businesses keep reporting to us that they are still unable to access grants and loans which are critical to keeping their businesses alive.
“Social enterprises are businesses but, because of the design of current programmes, they are falling through the cracks.”
The letter warns that social enterprises employ those who might be farthest from the labour market and who would struggle to find alternative employment should their organisations be forced to close.
It says that social enterprises are also more likely than other businesses to be led by women and BAME people, meaning the loss of their businesses would compound inequalities in British business.
The letter makes four main requests:
- Extend existing business grants to include social enterprises;
- Change the delivery of loan finance to work for social enterprises;
- Open up emergency financing for public services to social enterprises delivering services on behalf of the state;
- Provide business support so that social enterprises can use any funds they do receive effectively to transition their business.
“These measures would not cost a lot compared to the government’s overall support package and would preserve tens of thousands of businesses,” it says.
“This would safeguard over one million jobs in communities that need them most.”