Social investment could create '36,000 jobs in our most deprived communities'

An overhaul in how social enterprises are funded could create an employment boom in poorer parts of the UK, according to a wide-ranging new report into the world of social investment which also accused the sector of “a serious problem of inclusion and equity” when it comes to issues of race.

Government support for more social enterprises — businesses which reinvest profits into their social or environmental mission — could transform parts of the UK economy over the next 10 years, including regions and communities which have often been left behind, according to the commission on social investment.

“Acting on these recommendations can create tens of thousands of jobs in our most deprived communities, whilst delivering £3billion for our economy,” said Chris Murray, commissioner of the commission on social investment. “It’s a massive win-win and a practical example of how we can level up the UK.”

“I hope that government, social enterprises, social investors and all stakeholders will come together to refocus the social investment market and implement these recommendations,” said Lord Adebowale, chair of the commission.

The report, titled Reclaiming the Future, called on government to support a new range of investment funds and schemes totalling almost £800 million over the next 10 years for social enterprises to access.

This would create 180,000 jobs, including “36,000 jobs in our most deprived communities”, add £3bn to the UK economy, raise £1.2bn in tax revenue, and inject over £600m investment into the poorest parts of the UK.

The Commission on Social Investment was set up in February 2020 to “investigate the current state of the social investment market and how the market could better enable the growth of social enterprises.”

One of the central conclusions reported that there are “structural problems within the institutions that make up the market, which is not working for social enterprises led by traditionally disadvantaged communities”.

“This is particularly the case around Black-led social enterprises, who told us about the challenges they faced in access, securing support, a lack of understanding and diversity within the social investment community.

“This was echoed by nearly every witness to the Commission, while the data also backs up this experience. For us, the evidence is clear that social investment continues to have a serious problem with inclusion and equity particularly, although not exclusively, in relation to race.”

Danyal Sattar, chief executive of Big Issue Invest (BII), the social investment arm of The Big Issue Group, said the Commission “shines a light on where we need to do better”.

BII is on the verge of launching a new fund, in collaboration with social investment organisations UnLtd and Shift, which will work to address inequality in the sector and support more social enterpreneurs from minority ethnic communities, he said.

“We want to work with others to open up, grow and diversify the social investment sector in order to help address the widening social and economic inequities we are faced with. We are keenly aware that we need something different. This is our money, this is our society, [and] this is our sector.”