Budget 2012: reaction from social enterprise
A summary of the reaction from social enetrprise leaders to the 2012 budget.
In response to today’s budget, a group of leading social economy organisations have welcomed the government’s commitment to review the finance barriers facing social enterprises.
In a joint statement, the group – which includes Social Enterprise UK, the Social Investment Business, Big Issue Invest, CAN, Common Capital, London Rebuilding Society, Investing for Good CIC and Social Stock Exchange – called for the review to be independently chaired.
The group expressed disappointment that recommendations to Community Investment Tax Relief (CITR) to encourage private investment into trading charities and social enterprises, were considerably watered down. They have been campaigning for the CITR scheme to be extended and reviewed to make it easier for individuals and corporations to invest, especially in those operating in deprived communities.
The professional bodies said it was unfair that social enterprises (which operate without shareholders) are not entitled to tax relief, but standard businesses are – through the Enterprise Investment Scheme.
However, the group are ‘encouraged (that the) government has recognised the need to support young people to start their own ventures’.
Peter Holbrook, chief executive of Social Enterprise UK said:
"The economic situation calls for decisive action to grow social investment. These watered down reforms are a missed opportunity. Fiscal and social policies cannot continue to operate in silos. The Treasury has a duty to consider the needs of social enterprises and trading charities, not least because of the knock on effects of our country’s social problems on the economy, which is why it’s encouraging that there will be a social investment lead in the Exchequer."
Jonathan Jenkins, chief executive of the Social Investment Business:
"Social enterprises can address some of the key challenges of our economic recovery such as tackling youth unemployment. We are encouraged that the Government has recognised the need to support young people to start their own ventures and growing the social investment market will be key to making this happen.
"However, it’s a shame that government has missed the opportunity for greater progress on CITR, on top of rejecting the sector’s proposed amendments to the financial services bill. The review of barriers to finance for social enterprises is a small step in the right direction. We look forward to working closely with government to ensure that this review really makes a difference.
"This is a watershed year for the social investment market, with the large injection of capital from Big Society Capital and we need more support from the Government to encourage private investment into social ventures that can change the way services are delivered to our communities."