A coalition of leading social enterprises including Locality, Unltd and the Plunkett Foundation has written an open letter to Chancellor Rishi Sunak, warning him that half of the sector could run out of money by June unless funding is urgently released.
The letter says social enterprises could offer the ‘key to the recovery’ from Covid-19 however they are not currently benefitting from the package of support on offer for businesses.
It urges the Chancellor to extend grants to include social enterprises and also change the delivery of loan finance to work for social enterprises.
It also says that emergency financing should be opened up to public services so that social enterprises can deliver services on behalf of the state.
The letter reads: ‘Time is of the essence, as we estimate that half of the social enterprise sector could run out of cash by June, unless action is taken. Once these businesses disappear it will take years to rebuild.
‘Their loss will drag our economy down and unnecessarily elongate our recovery. Social enterprises are more likely to work in the poorest areas than traditional SMEs or charities – with 1 in 5 based in our most deprived communities.
‘Social enterprises also employ those furthest from the labour market. They employ tens of thousands of vulnerable and disadvantaged people such as those with disabilities, homeless people and veterans.
‘Many of these workers will struggle to find employment if the social enterprises they work for close. Social enterprises are also more likely to be led by women and BAME people, the loss of their businesses will compound the inequalities in British business.’
‘These measures would not cost a lot compared to the government’s overall support package and would preserve tens of thousands of businesses. This would safeguard over 1m jobs in
communities that need them most.
‘Supporting the UK’s social enterprises will increase the chance of a quick, fair and inclusive recovery from this lockdown.
‘We urge you to act now and work with social enterprises to lay the foundations for a strong British recovery to this crisis.’
Read the letter in full here.