Time for social enterprises to shine

The Government's Social Enterprise Action Plan pledges investment and cultural change.

Of all the documents that have rolled out of the Cabinet Office this year, the Social Enterprise Action Plan perhaps represents the furthest departure from all that has come before it.

With forewords from the Prime Minister and the Chancellor, the social enterprise document - subtitled Scaling New Heights - promises that the Government will help enterprises in four key areas: breeding an enterprise culture, providing advice for entrepreneurs, giving enterprises access to finance and helping them to deliver public services.

The plan is filled with case studies and pictures of successful entrepreneurs - who are, with the exception of veteran Big Issue founder John Bird, all youthful. These are the bright young things who will fulfil Tony Blair's aim, stated in the plan, of "making greater strides towards social justice and working more easily with conventional businesses and the public sector".

A new culture

The drive to foster a new culture of social enterprise is intended to start in schools, because the plan suggests that social business models will be given a higher profile in GCSE and A level business studies courses.

The Government thinks its trump card is that social enterprise makes good business sense, as well as incorporating the all-important social purpose. At the moment, social enterprises contribute £8bn a year to GDP, which adds weight to the politicians' message that enterprises are not only good for communities, but good for the economy too.

Away from all the bluster of the launch of the plan, what do ministers really think about the issue? Since social enterprise has traditionally helped people living in poverty, Hilary Armstrong, minister for the Cabinet Office and social exclusion, has a particular interest in the issue.

"Social exclusion can frequently develop in deprived areas, where people have had no experience of business or entrepreneurial activity," she says.

"Enterprise is actually a great way of enabling poorer communities to develop skills, knowledge and confidence about businesses, how they run and how they can actually be used to improve the life of the community."

Armstrong is pragmatic, however, and admits that the social enterprise framework has the added benefit of helping those who would otherwise shy away from direct government assistance.

"It's much easier if a service is being provided by someone the excluded know and trust in their locality, who doesn't necessarily have the label of the state wrapped around them," she says. "For the person who is requiring services, social enterprise and, more broadly, the voluntary sector are very good ways of actually engaging with people who otherwise don't want to know."

Social entrepreneurs have raised concerns that if the Government wants enterprises to deliver such services, then the £10m investment in social enterprise specified in the action plan is not enough.

But Armstrong is defiant. "It's never enough, however much you give to organisations or to support things," she says. "They could always use more, and they could always argue for more."

The minister is also adamant that social enterprises should work towards the independence that marks them out from charities. "It is important that social enterprises don't become characterised as being able to survive only if they get grant funding," she says. "I've met people from social enterprises who want to demonstrate to the world that they can thrive in the marketplace precisely because they do things differently."

Greater awareness

But doing things differently brings its own pitfalls. Although entrepreneurs are quick to praise the new plan, they insist that enterprises can truly evolve and flourish onlyif there is a greater awareness of what they are and how they work.

The action plan pledges to help inform the public on the issue, but the education programme, which involves the appointment of 20 social enterprise ambassadors to advance the cause, will take time to spread the message.

Similarly, the Government's plans to help lever private finance into the social enterprise investment fund will not be immediately effective, and the promised consultation on how community investment tax relief can be adjusted to help enterprises began only this week.

UK entrepreneurs know that the plan's recommendations are of little use unless they are implemented, and that the proof of all the paperwork will be in what happens next.

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