General Election 2019: 3 things up next

20 December 2019

The Conservative Party – led by Boris Johnson – achieved a landslide victory at last Thursday’s general election, securing its biggest majority since Margaret Thatcher’s victory in 1987. So what’s next for the social economy, and how will the proposed policies impact on the work we do as social investors? Our Policy Lead Will Thomson investigates.

The polls have closed and the results are in. Last week, our CEO Nick Temple discussed the parties’ manifestos in theory, picking out three key themes that have an implication for the social economy: investment, ownership and procurement. Now that we have a Conservative majority government it is likely that the Brexit-induced stasis of the past two years is at an end. It is therefore worth considering what this government’s domestic agenda might look like, and how it will impact charities and social enterprises, and organisations like us that support them.

So, what next? Yesterday’s Queen’s Speech set out the legislative priorities for the New Parliament, which outlined the government’s commitment to ‘unleash productivity and improve daily life for communities across the country’, and also to give ‘communities more control over how investment is spent so that they can decide what is best for them’. A new Budget will follow in the new year. Before then, let’s revisit the Conservative manifesto to get a better sense of what we can expect from the new government.

  1. Investment

The Conservatives have pledged to increase public investment – some of which will be targeted locally towards towns and communities in an effort to kickstart local economic development.

  • The Conservatives have set out a ‘new deal for towns’, building on the previously announced £3.6bn Towns Fund which has already been allocated to an initial 100 towns to revive their local economies. Part of this deal includes a new £150m Community Ownership Fund to encourage local takeovers of civic organisations or community assets that are under threat.

It’s clear that the Conservatives have understood the importance of ownership: that’s good to see, as it involves devolving power and decision-making and strengthening local infrastructure. We are supportive of these proposals to boost community ownership of buildings and other assets in a local area that are under threat, so that they can be used for long-term public benefit rather than commercial interests.

From our experience, community organisations not only need funding to take on assets, but ongoing support to build their capacity and resilience in managing and maintaining these assets. We are already partners in a service like this through RePlan with the Architectural Heritage Fund and would recommend that the Government allocate additional funding for this kind of business support.

However, more funding is only part of the solution: it needs to be targeted where it can have the greatest impact. Evidence from our loan book shows the social economy provides more jobs by turnover than the private sector, employs people furthest from the workforce, and provides the accessible services that local communities desperately need. To really build such social infrastructure, it will be important to learn and expand on the experience of those in the field, such as Locality, Power to Change and ourselves.

  1. Ownership

In our previous election blog, we highlighted the advantages of shared ownership businesses – and Labour and the Liberal Democrats set out a series of policies aimed at boosting employee ownership in the economy. Disappointingly, the Conservative manifesto doesn’t really touch on ownership as concerns employment and work - though it does include a pledge to launch a review to better support the self-employed.

There are significant challenges presented by the future of precarious work and economic inequality in the UK. We therefore recommend the government focus on developing new models of employee ownership that will help to build an economy with fairer employment and a more empowered workforce.

This is especially important in an increasingly freelance future – with a growing number of people in precarious employment. Precarity is acute in sectors like adult social care, where 50% of carers are on zero-hours contracts. The government should explore multi-stakeholder cooperatives as a route to supporting the most precarious workers – such as domiciliary carers and workers in the gig economy – who are least likely to be supported by conventional business models. We will be publishing new research on this in the New Year.

The Government could also do more to support ‘social buy outs’ of small private businesses by larger cooperatives or mutuals.

  1. Procurement

Public commissioning and procurement can be an important source of finance for social sector organisations who bid for and deliver public services, and the Social Value Act has been a helpful piece of legislation for opening public markets to the social economy.

  • The Government has already run a consultation into social value in public procurement earlier this year, with proposals to both strengthen and broaden the Social Value Act. While the Conservative manifesto does not explicitly contain any further detail about this, it does pledge to ‘continue to support charities which have helped to transform our public services.’  

We support the broadening and strengthening of the Social Value Act and look forward to the Government publishing its response to the consultation in the new year. We feel there is an important role for charities and social enterprises to play in public service delivery – not only in small-scale community provision, but in enhancing conventional services and developing innovative new approaches to supporting an aging population.

We hope that the next Government remains committed to a ‘Social Value Infrastructure Commitment’ which ensures the communities that are being ‘infrastructured’ really benefit from its delivery.

If this government wants to truly live up to its early promises of ‘levelling up’ and winning the trust of the communities behind the ‘red wall’ that turned blue, then it must think more creatively than an investment in transport infrastructure.

Whether it is the Stronger Towns fund or a new Community Ownership Fund, the social economy now has an even more vital role to play – through its reach, its innovation, who and how it employs, and through its patient commitment to make change with the people who live there. It is these charities, social enterprises, co-operatives and mutuals that not only provide the support and fill gaps in provision where needed, but also provide an exemplar of a different form of regeneration – and the hope of a fairer new economy.

Photo by Habib Ayoade on Unsplash

 

Will Thomson

Policy Lead

Will joined SIB as Policy Coordinator in May 2019, becoming Policy Lead in December 2019.

Before joining SIB, he was a consultant at a Bristol-based public affairs agency and provided secretariat support for two All-Party Parliamentary Groups. He has produced a series of policy reports on devolution for the Bristol Chamber of Commerce and also worked with two social investment organisations based in the West of England.

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