When you buy something, does it matter to you where the profit goes? Do you care about the values of your employer? For more and more people, the answer is yes.
That is why we can start to talk seriously about our social economy. We have the most successful not-for-dividend sector in the world and our charity sector has a very proud heritage, but these are not the whole story.
Social enterprises are businesses and organisations that work for the benefit of the community, reinvesting any profits in good causes. The growing network of social enterprises alone now totals more than 180,000 organisations, contributing more than £55bn to the economy and representing 15 per cent of small and medium employers. In the challenged area of Birmingham I visited last week, the biggest employer was a social enterprise. This growing network of organisations that want to use profit to help to find better social solutions is really important, and part of a quiet revolution that is about to get noisier.
We are on the brink of huge change in the public sector. We have to deliver better services with less money. Now that business as usual is not an option, we have a window of opportunity to find better ways of doing things. To succeed, we have to get behind the change-makers – disruptive agents with the ideas and spirit that challenge us to think differently. Every pound of public investment needs to work as hard as it can. So over the next few years, we will see the social economy delivering more and more public services. The new Social Value Act makes it clear that we expect commissioners to consider how they can maximise social value when buying services on our behalf. There is huge interest in this, as I saw at a West Midlands conference recently, and this movement will grow.
The other big change is in the private sector. Big business is going through a crisis of public trust. How you behave as an organisation is becoming more and more important. The recruiter of choice out of university now is a charity, Teach First. Even investment banks are being asked now what they give back. Corporate social responsibility is at last moving into a serious phase. Some businesses even want to define themselves as social impact businesses and have the world's first Social Stock Exchange on which to present themselves to investors.
Nor is this restricted to big business. A new platform, Trading for Good, will allow the small and medium enterprise community to show the good things it is doing, and we can expect to see much more interaction between traditional business and the social economy.
The Government wants to make it much easier for social entrepreneurs to access long-term, affordable finance. That is why we are helping to develop the social investment market. This is the powerful idea that you can invest for the common good and get your money back. It is spawning all kinds of innovations such as social impact bonds and charity bonds. Our flagship is Big Society Capital. This independent social investment institution has already invested £56m in its first nine months, last week announcing its plan to work with Big Lottery Fund to make available £250m to help communities to buy the assets they want to save and transform.
We are treating social enterprise like any other boom industry in Britain and encouraging the best talent to seek a career in the field. Last year we launched the £10m Social Incubator Fund. As a result, many more social entrepreneurs will find that first helping hand –the offer of a place to do business, connections to customers and good advice on how to grow. The most promising social ventures will then be able to step up to the next rung. Our £10m investment and contract readiness fund has been shaped by the leading social investors in the country. It exists to help change-makers move an idea to real impact at scale, and attract serious investment.
The first new global social entrepreneurs network has its HQ in London. This knowledge-sharing forum helps to improve the expertise and innovation used to scale early stage ventures by drawing on best practice examples around the world. This is something the country can be hugely proud of: a unique combination of socially minded investors, entrepreneurs and consumers that is truly "made in Britain".
Our approach is different from anything government has tried before. To succeed as a country, we have to make the best use of all our resources. We have great social entrepreneurs, and it is time for the public sector and socially responsible investors and businesses to get behind them.
Nick Hurd MP is the Minister for Civil Society
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