Social enterprise could be given structured EU funding from 2014

Social enterprise could be given structured EU funding from 2014
The Guardian, by Claudia Cahalane

Social enterprises need to put pressure on their governments to get EU structural funds directed at the sector, said a European Commission spokesman yesterday.

Speaking at the European social enterprise conference, E3M, Henrik Morch, head of the single market policy unit, said the EU’s structural funding programmes – for supporting social and economic restructuring – are expected to have a specific priority to support social business from 2014. But, he said, it was up to member states to decide how to use the money.

Morch explained: "For the first time, in the next round of structural funding, it will be possible for member states to give specific priority to social enterprise. This will go through parliament with no difficulty. But the difficulty could come when it has to be implemented.

"Will priority be given to social business in member states? We can’t do much about that, it’s up to member states to decide how to use the money. You, as stakeholders, have an important role to play. You have to go to your authorities and make them aware of this priority. It has to come from grassroots," he said.

In the UK, the structural funds are made up of the European Regional Development Fund and the European Social Fund. For 2014-2020, €363bn is proposed all together, but fund managers can also bring in further investment money.

At the event, Morch also outlined measures being implemented by the European Commission under its Social Business Initiative. These included the new €90bn Social Entrepreneurship Fund, a detailed map of social enterprise across Europe, a possible social investment sub group within the social business initiative at the Commission, a new "social innovation Europe" website and work on social impact measurement.

Morch said that a "financial framework" for the Social Entrepreneurship Fund was still being agreed on, but that it would operate freely across boarders. He added that while €90m was "not a lot", it signalled that the Commission did see social enterprise as a priority. And in the next two weeks investors will be able to start putting money in.

The commissioner said: "This is a start on the access to finance commitment, but access will always be a problem. We’re looking at whether there are more things we can do to facilitate access to finance. What about crowdfunding, social stock exchanges and so on – are they viable? Is this something we, at European level, should do? We’d like a sub group dedicated to this."

As well as improving access to finance, the commission has committed itself to improving the visibility of social enterprise as part of the Social Business Initiative. To this end, it will launch a "social innovation Europe" website next month to raise awareness of what’s going on in the sector across different states.

Morch also said that an expert group was creating a study on social impact measurement for the commission. "We don’t have well established methodologies to measure. Hopefully we can come up with one very soon which we can apply. Our first report on this will come in June, and hopefully we will have something usable by the end of the year."

By then or early next year, the commission aims to have a map detailing social enterprises across Europe, their turnover, contribution to the jobs market, and more. "There is no well-established data and we need that, it is a weakness at the moment," said Morch.

The speaker said he felt the commission had made very good progress since it launched the Social Business Initiative 18 months ago, but added: "The challenge over the next 18 months is to make sure as much of this as possible is anchored within the commission and not just with a few personalities. There will be a new commission in two years time and whether they will devote the same effort to social enterprise is uncertain."