A two-faced approach to social enterprise

Glenys Thornton Glenys Thornton reveals how Ministers are trying to have it both ways in dealing with the third sector

There is some irony in LibDems initiating a parliamentary debate about Charities and Social Enterprises. In true LibDem fashion, they are facing both ways at once. Some have an outstanding record of support for the sector, like Lord Philips of Sudbury and Baroness Scott. Others are less enthusiastic, such as Baroness Barker who fought hard against the 2009 Health Act to give NHS staff the “right to request” consideration that they could provide a particular service through the formation of a social enterprise which would contract with the NHS.

David Cameron seized the initiative of giving support to social enterprise during his party leadership campaign. As the then Chair of the Social Enterprise Coalition, now Social Enterprise UK (SEUK), I was delighted by this. And I helped, behind the scenes, to ensure the success of a Conservative Opposition frontbench tour of London’s Social Enterprises, undertaken on a red London bus provided by Hackney Community Transport – one of our biggest and best examples of a social enterprise. I was pleased because the development and growth of the sector needs all political parties’ understanding and support.

This translated into two main pledges to support social enterprises in public service delivery in the Coalition Agreement: to support the creation and expansion of mutuals, co-operatives, charities and social enterprises, and enable these groups to have much greater involvement in the running of public services; and to give public sector workers a new right to form employee-owned co-operatives and bid to take over the services they deliver.

The problem is, in true Coalition inconsistency this translates into the cuts agenda driving the charitable and social enterprise sector to becoming a substitute for robust and thriving public services - all in a manner reminiscent of the poorhouse of Victorian times. A voluntary play group is not a substitute for a nursery which allows a single parent to have a proper job. We need both.

Ministers are actually facing two directions at once. Lots of pious words from the likes of Jeremy Hunt in support of giving, philanthropy and charities, while simultaneously making a complete mess over tax relief for charitable donations in the last budget. They have managed to saddle the average family tax bill with a £511 a year hit, give the 300,000 wealthiest tax payers a tax cut, and try to mitigate that by a cap of reliefs which serves to hit the charities who help the most vulnerable in our society. Is this a triple whammy?

The fact is that the growth of social enterprises owes a great deal to the last Labour government, and our legislative and financial legacy has enabled the Coalition to continue to support social enterprise. But that legacy is running out. The newly launched Big Society Capital is in fact the social investment bank that Labour was establishing through the Dormant Accounts legislation, and it has taken two years longer to introduce than was necessary. The Public Services Social Value Act is welcome but it has to be noted that the words social enterprise were removed from Chris White MP’s Private Members Bill, and unless embedding social value in local commissioning takes place this will go nowhere at all.

These are challenging days for charities and social enterprises. Both are proving resilient and imaginative. Both need our support, and policies which break down barriers to their success. Whether the government parties can provide some public policy coherence and face in one direction at the same time is the question and challenge.

Baroness Glenys Thornton is Labour’s Shadow Equalities Minister in the Lords

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