The Adebowale Commission’s social investment report has called for the UK Government to “learn from Scotland” on to grow social enterprise infrastructure and schemes across the UK.
The Scottish Government has created a strong framework to support social enterprises through investment, according to the report.
Over the last two years, the commission was tasked with investigating the state of the social investment market and how it could better enable the growth of social enterprises.
In the resulting document, Lord Victor Adebowale, chair at the Commission on Social Investment, argued that social investment in the UK has lost its focus. “As a result, we risk holding back the growth of social enterprise and its promise to build a better country - an urgent course correction is needed.
“Without reform, we will not realise the full potential of social investment, this report is an attempt to reclaim that future, before it slips away.”
The report stated that any new strategy “must not be a top-down exercise”, but rather an opportunity to share learning across the country.
It praised the Scottish Government’s “active social enterprise strategy”, explaining that the nation had a more flexible approach to developing products and utilising policies to support social enterprises.
The Scottish Government has been more active in its use of Social Investment Tax Relief (SITR) to support social enterprises, with one fifth of all investments made through the tax break coming from Scotland.
It credited Holyrood for its roll out of emergency finance for social enterprises during the pandemic, with Social Investment Scotland (SIS) utilising its powers to make concessionary investments on a case-by-case basis and developing a 0% interest loan fund.
The Scottish Government also created SIS Ventures as a way to generate equity investment through schemes, such as SITR and the Catalyst Fund, to provide more growth finance for social enterprises.
“Scotland has seemed to have the highest level of success in deploying investment into social enterprises in part because of the significant investment that the Scottish Government has put into infrastructure,” the report read, adding that this work on social enterprise infrastructure and strategy was viewed more positively than in England.
The report recommended that the UK Government’s strategy be independent, but produced alongside the devolved nations and local authorities, social enterprises, social investors, social investment finance intermediaries, charitable foundations and experts, in order to counter imbalanced power dynamics.
The strategy should be chaired by a government minister and representatives from the social enterprise sector.
It noted the importance of the UK strategy respecting the devolution settlement and policy programmes of the devolved nations.
Adebowale also proposed a new £50m social investment to tackle the current inequality of social investment of Black-led social enterprises.
Other funding proposals included:
- A new flexible capital taskforce to work with charities to unlock £380m of new capital by 2030.
- An additional £100m investment in access.
- A new £400m frontiers fund should be given to a reformed Big Society capital group.
- A new social enterprise loan guarantee.
- Regular investment in place-led social enterprise infrastructure to support growth and the development of social enterprises.
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