A new approach to funding social enterprises could level up every part of the UK
Now is the time to rip up the old defunct system of funding social enterprise to create a model that drives green growth and rewards local entrepreneurship.
With government taxing more and spending more than ever before, yet getting poorer outcomes for public services, we need a radical rethink of how to increase growth and reduce inequality in the United Kingdom.
Brexit has caused a long slow puncture to our economic heartlands. Trickle-down strategies have failed. Britain has fallen behind similar size countries because austerity has wounded local services and increased poverty.
We can’t expect growth in our local economies when the funding models are restrictive and antiquated
What if we could change that?
The UK’s 100,000 social enterprises are uniquely placed to shape local towns and cities for the better. They are often run by local people serving neglected communities. They create far reaching, lasting social and environmental impact – often with inadequate funding.
What if we could provide a sustainable growth pathway for social enterprises that produced outstanding results? A new approach to financing social enterprises could level up every part of the UK, spur innovation, increase diversity and change the outdated models that only serve those who are good at writing funding bids.
Labour’s mission to create a fair, green and resilient economy could mark that decisive moment. The creation of a British investment bank, and a state-owned energy company will both break from the “business-as usual model” of the last 13 years. Sustainable funding for social enterprises could enable wealth creation everywhere. By everyone, for every one of us. So, how can we do it?
First, social entrepreneurship funding needs modernisation. We can’t expect growth in our local economies when the funding models are restrictive and antiquated. The School for Social Entrepreneurs (SSE) is a leading player in this field, providing a unique funding model, Match Trading™, where social entrepreneurs can access a grant directly linked to increasing income from trading and therefore improving their enterprise’s financial stability. Match Trading pushes power and agency down to the local level. It empowers entrepreneurs to create innovative solutions tailored for their community.
The facts speak for themselves; on average, a Match Trading grant produces a trading uplift of 29 per cent over one year compared to 12 per cent from a traditional grant. Any new government will scrutinise every penny of funding to ensure that it delivers not just economic, but social value. Match Trading is one powerful tool to achieve it.
Edible London is a business whose mission is to fix the food system and rebuild communities by growing, sharing and saving food. Supported by an SSE Match Trading grant, the business has experienced exponential growth. Edible London facilitator Alex Fox said: “There’s a great local spirit” of their weekly meal hub in Tottenham. “Within weeks we welcomed a regular group of visitors for good food and a chat. It’s wonderful to see the communal spirit – people taking a meal for neighbours or local workers. Or taking a whole load for their entire street or community group!”
Now is the time for creative reform of the funding system. All political parties should listen to the voices of social entrepreneurs who have experienced growth through this innovative investment mechanism.
Harnessing the power of grassroots businesses is a key part of a long-term industrial strategy where power and wealth are shared. It would unlock benefits for everyone, everywhere. Levelling up at last.
Mary Creagh, former Labour MP for Wakefield
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