“We will not make through this” says retail enterpriser, John. John desperately needs access to the Small Business Grant Fund or retail specific grants. “However, as we operate as a concession and do not have our own premises, we do not pay our own business rates and therefore cannot access the schemes.”
Written by Sila Kiss
With the government’s order to lockdown, many work places had to close. Some organisations were impacted immediately, such as bars and hotels. On the other hand, according to the Social Enterprise COVID-19 research report 2020, enterprises saw a high demand in health and social care sectors both for their services and staff absences due to symptoms.
When the Government support packages were announced, social enterprises were told that a grant would help them most. However, England did not include social enterprises in the government’s packages directly.
“Social enterprises can access some business support as there is often no specific discrimination against particular legal forms of business. Yet social enterprises are often not able to access this support because of details in the design of the programmes, sometimes unintentionally created by a lack of understanding or awareness of social enterprise business models or forms. That said, social enterprises are often not able to access this support because it is not in an appropriate form or there is not an understanding of social enterprises in those sub-sectors. Likewise, some social enterprises have access to grants to be distributed by the National Lottery Community Fund. But not all. Restrictions apply and social enterprises also have to compete with grant-based charities for support.” – SEUK Report
On the other hand, the Welsh Government’s £500m Economic Resilience fund is open to social enterprises. In Scotland, a Third Sector Resilience Fund has been created by the Scottish Government specifically for social enterprises. SEUK’s report says: ‘Greater Manchester and Liverpool City Regions have been working to provide business support for social enterprises.’
Economic cost could hit £2.5bn per month
SEUK’s report draws attention to economic consequences:
“If social enterprises fail in significant numbers, the potential impact is huge – socially and economically. This is £60 billion of business – or 3% of the economy – which expects to see a 50% decrease in turnover – a potential economic cost of £2.5 billion for each month that the lockdown continues.” – SEUK report
There are many types of support; the Government is providing loans, tax support, furlough scheme and more, but social enterprisers are still having issues. Firstly, many social enterprisers are not eligible to claim them. SEUK’s report mentioned that 83% of social enterprisers has reported that they do not claim any form of business rates relief (although 60% pay rent), making them ineligible for business grants. Also, The National Lottery Community Fund’s grants are not available to certain forms of social enterprises because of their legal form.
Secondly, for some social enterprisers the furlough scheme is the best option but it means the closure of important services or functions. Also, numerous social enterprise owners and workers that work in the most denied networks can’t bear to reimburse commercial rate loans.
Last but not least, less than 20% of social enterprises and charities are eligible for the government’s help, although social enterprises deliver over £1bn of health and social care services per year.
Around one million people are employed by enterprises and over 70,000 businesses contributed more than £24bn to the United Kingdom’s economy in 2017 and £60bn in 2018.
Featured image: © Gerd Altmann