News from the Crown Representative’s VCSE Advisory Group

17th February 2022

For some time now Sarah Beaumont has sat as a member of the VCSE Advisory Group convened by the government’s Crown Representative for the VCSE, Claire Dove CBE. This group is designed to act as an intermediary between government and the voluntary and social enterprise sectors and we have decided to try and use this blog to communicate more of what it discusses. This makes for a long post but a valuable one and we hope you find it interesting.

The most recent VCSE Crown Representative’s Group meeting was held on the 16th February 2022 and Sarah has just reported the following.

There were three main areas of discussion:

1. Levelling Up

On the 2nd February the Government published its new Levelling Up White Paper Levelling Up the United Kingdom.

This White Paper promises a series of next steps: a comprehensive programme of engagement across the UK; consultation on missions and metrics and the devolution framework; the establishment of a new body focusing on local government data; rolling out Levelling Up Directors across the UK; simplifying growth funding; creating three sub-groups to support the levelling up advisory council; and introducing future legislation to create an obligation on the UK Government to publish an annual report on progress and to strengthen devolution legislation in England.

(Wider commentary on the White Paper is now starting to appear — for example, by The Centre for the New Midlands, the Local Government Association, and Policy Exchange.)

The Government also published UK Shared Prosperity Fund: pre-launch guidance providing information regarding the aims of the fund and the delivery roles of local partners.

2. Commission on Social Investment

Peter Holbrook from SEUK gave a brilliant overview of the background, process and findings from the Adebowale Commission on Social Investment. Many of you will be aware that the experience of seeking and winning social investment has been very mixed and I am personally delighted to see this report and look forward to seeing what the impact might be!

Key findings of the Commission on Social Investment report are as follows:

Criticisms

• The Commission’s final report calls for “comprehensive structural reform” to the social investment market.
• It concludes that “the needs of social enterprises have been deprioritised over the past decade” and that “social investment cannot work – and has no purpose – without social enterprise.” This de-prioritisation has come at a time when social enterprises need greater access to finance, with the social enterprise sector growing rapidly.
• The Commission concluded that despite some £600m of public investment since 2010, the social investment market is “fundamentally the same in 2019 as it was in 2011”.
• Social enterprises in the regions and nations of the UK have been underserved by social investment, as have disadvantaged groups, such as Black-led social enterprises. In particular, the Commission found that the “social investment continues to have a serious problem with inclusion and equity particularly, although not exclusively, in relation to race.”
• The Commission found that the structure of the social investment market was at the root of these problems, particularly the lack of patient, concessionary capital for on-lending to social enterprises and the lack of flexibility in the structure of key institutions within the social investment market, such as Big Society Capital.
• These structural weaknesses have led to a lack of diversity in the financial products available to social enterprises, particularly a lack of “enterprise-centric finance”, which the Commission has defined as investment which is built around the needs of social enterprises with flexible repayment terms rather than conventional debt products.

 

Opportunities

The Commission also highlights a major opportunity for economic and jobs growth:

• Over 5,000 social enterprises and charities have been helped through social investment so far. If another 5,000 social enterprises were ale to grow with the support of social investment this could:
  • create 180,000 jobs either directly or indirectly, with 36,000 jobs in the most deprived communities.
  • add £3bn to the UK economy.
  • raise £1.2bn in tax revenue.
  • inject over £600m investment into the poorest parts of the UK.

Overall, the Commission believes that the UK could see a £4 return for every £1 invested into a reformed social investment market.

Recommendations

The Commission’s key recommendations are as follows:

1. HM Government should develop a new UK-wide social investment strategy, in consultation with the devolved administrations, to provide renewed clarity and purpose to the social investment market which has been underpinned by nearly £1bn in public investment.
2. A new £400m ‘Frontiers Fund’ should be given to a reformed Big Society Capital, which should have its financial sustainability target removed, to provide enterprise-centric finance to social enterprises.
3. A new “Social Enterprise Loan Guarantee” scheme to provide security to investors in long-term patient capital for social enterprises backed with £200m of public money.
4. An additional £100m investment in Access – The Foundation for Social Investment, to ensure the ongoing provision of blended finance to social enterprises.
5. A new “Flexible Capital Taskforce” to work with charitable foundations to boost their investment in social enterprises and unlock £380m of new capital by 2030.
6. A new £50m “Black-led” social investment fund to tackle the current inequality of social investment in Black-led social enterprises.
7. Regular investment in place-led social enterprise infrastructure to support the growth and development of social enterprises that can access social investment. An initial investment of £44m should be made from dormant assets with further tranches in the future.

 

3. Developing Procurement Opportunities for social enterprises within government contracts

DCMS reported that it has had considerable success in increasing the number of SMEs being awarded government contracts. Around 50% of DCMS contracts are now won by SMEs.

DCMS is now pursuing changes which will similarly increase the number of social enterprises winning government contracts. Procurement processes will change to include targets, an action plan and data collection measures focusing on contracts up to £50K, all of which will be flagged as ring-fenced VCSE reserved opportunities.

DCMS plans to be the first department to have ring-fenced opportunities for the sector. Watch this space because this seems to represent a real commitment to system-change in favour of the social economy sector.

A procurement opportunity

The MOJ has an opportunity to provide Helpline and Website services  for Prisoner Family/significant others. One grant will be awarded to a single bidder or consortium. The grant is expected to run for three years from 1st August 2022 – 31st July 2025. The current expected level of funding is within the range of £110,000 to £130,000 per financial year (£330,000 – £390,000 in total over the three year period). TUPE may apply to this competition. The closing date for bids is 27th April 2022.

→  For more information about this MOJ opportunity send mail.