Good morning and thank you for having me here today to talk to you about the launch of the latest piece in the jigsaw of our social economy, Access.
In particular I’d like to thank John Kingston for the work he has done so far in supporting Access to get up and running, as well as taking on the role of Chair of Trustees, a role that will greatly benefit from his expertise and experience.
Also my thanks to South Oxfordshire Food and Education Academy SOFEA and Richard Kennell for hosting this event. SOFEA is a prime example of the kind of organisation that we have been working so hard to support over the last 5 years.
By taking an innovative idea, redistributing surplus food to disadvantaged people and providing training opportunities in the process, Richard and his colleagues have been able to make a huge positive social impact for the people of Oxfordshire, Berkshire and Buckinghamshire.
It’s the perfect example of a bigger society in action – local people taking the time to help each other and using business techniques to do so in a sustainable way.
As a government we have come to recognise that the ideas, the innovation, behind the very best social enterprises almost always come from individuals, like Richard, seeking solutions to problems in their own communities.
There are some fantastic examples of social innovation here today – from Arts at the Old Fire Station, which showcases art from all sections of the community and supports measures to address homelessness, to Sweet FE which charges for services and then uses this the money to support its education schemes.
All of these enterprises are united by the singular drive to improve the lives of others.
They are the kinds of initiatives that government would not be able to come up with on its own. They can only spring up from the people who understand the very real issues that face communities and who have the insight, energy and dedication to offer solutions.
We know that government’s job is not to dictate, but to offer organisations the help and support they need to thrive on their own. This is at the heart of why we are here to launch Access today.
The story so far
When we came to power, we committed to creating the right environment for social enterprises to grow so they can support communities in the UK and across the globe.
To thrive, these innovative and life-changing organisations need access to finance and investment, which is why we introduced the world’s first social investment tax relief to drive more investors to put their money into organisations that do more than just make profit.
And it’s why we set up the world’s first social investment wholesaler, Big Society Capital, which has already committed over £180 million of investments, supporting over 100 ventures across the UK.
In the process, it has created a landscape of lenders specialising in providing social enterprises with finance and business support.
Right here in Oxfordshire a group of residents used £150,000 of top up loan funding from Resonance, supported by Big Society Capital, to supplement £550,000 raised through community shares to set up Osney Lock Hydro, a community owned hydroelectric scheme in Osney Island.
Over time, the Osney Lock project will repay the loan through raising additional community shares once the project is operational.
What is great about arrangements such as these is that Resonance’s investment not only helps Osney Lock have a viable business model, but also helps to ensure that the expected benefits for the community are realised.
At the same time, the community shares give local residents a real stake in a business that is supporting their area.
Arrangements like this make the most of our skills as a country.
The UK is a nation of entrepreneurs and capitalists but we also have a fantastic heritage of philanthropy and social reform. Too often we think of these traditions as being separate, when it should be perfectly possible for people to invest in a way that makes good business sense while also supporting good causes.
Social investment is all about combining financial hard-headedness with altruism and social concern – allied together these can be an incredibly powerful and effective force.
But we are fully aware that not all social enterprises and charities, particularly the smaller ones, have the expertise they need to access social investment.
For that reason we created the pilot Investment Readiness Programme in 2012 which now includes the Social Incubator Fund; the Investment and Contract Readiness Fund; and the Impact Readiness Fund which together support social ventures at different stages of development.
The Investment and Contract Readiness Fund in particular was created with the intention that it would provide social sector organisations with the specialist business support that they need to take on significant investment.
Using the £4.5 million of grants that have been given out by this pilot to date, charities and social enterprises have managed to win investment deals worth over £117 million – which means that they are leveraging £26 of investment for each £1 of grant.
In Oxford, the Ethical Property Company used a £106,000 grant to fund business support that resulted in their raising an enormous £10m in investment.
The way that relatively small amounts of grant funding have unlocked much larger levels of investment has demonstrated the impact that targeted capacity building programmes can have. It’s not about giving money to support services, but supporting organisations to acquire the skills necessary to be self sufficient and attract investment to grow.
The government’s Investment Readiness Programme, along with other capacity building programmes in the sector, has been crucial in supporting access to social investment, and organisations are asking us for more of these types of programmes, delivered on a larger scale and on a longer-term basis.
This is exactly why we, in partnership with Big Lottery Fund and Big Society Capital, have established Access as a sister organisation to Big Society Capital.
The programmes it will develop will sit alongside the Growth Fund and together address some of the barriers that social enterprises and charities still face when seeking finance to grow sustainably.
Access will not only inject an additional £100m of funding support, but also grow understanding of what effective support looks like to enable the social economy to reach its full potential. We are providing an endowment in order to give Access the freedom to listen to the sector over the next decade and deliver programmes that really meet their needs.
The social economy is a fantastic UK success story. The social enterprise SME sector alone contributes £55 billion and 2 million jobs to the UK, and we now have the most developed social economy in the world.
The establishment of Access; an independent, specialist organisation committed to increasing access to social investment, is the latest piece in this economy. It will help to ensure that the hundreds of thousands of social entrepreneurs in the UK, who deliver innovative solutions to challenging social issues, have the support they need to grow and increase their positive impact in our communities.
Developing the social economy is a fundamental part of our long-term economic plan. But the benefits are infinitely more important than this.
Experience has taught us time and again that government does not have all the answers to the trickiest issues in our communities. Look at homelessness. Reoffending. Long-term unemployment. These complex problems aren’t new but their solutions have eluded successive governments for decades.
On the other hand we know that charities and social enterprises often have the local and specialist knowledge to be able to tailor services around the needs of communities and individuals; they can be more responsive and agile and can help to find lasting and comprehensive solutions.
Social investment offers them the opportunity to scale up their ideas sustainably, granting them the opportunity to play an even bigger role in society.
If there is anything we can do to support this, we will.