Political

Investing in social enterprises: government proposes ways to fix the broken investment market

During the week I commented on how “Community Politics” is a term becoming worryingly scarce amongst the public utterances of senior Liberal Democrats. One practical example of this is how so much of the running, both intellectual and practical, in political circles on developing social investment is happening in the Conservative Party.

Finding ways to improve the availability of funds to social enterprises is an issue that has got increasing intention in recent years and is an important part of the Conservative vision for a Big Society bank, but Liberal Democrats have been mostly silent as it has become all about the Big Society, with Community Politics rarely getting a mention on the national stage even from Liberal Democrats.

If you are not familiar with the issue, here is an example of a social enterprise taken from the government consultation paper published during the week:

Bikeworks was set up in 2007 with the aim of using bikes to tackle environmental, social and economic challenges in Tower Hamlets, east London. Bikeworks provides employment and training opportunities for marginalised individuals in recycling and refurbishing second-hand bikes. Bikeworks’ approach is to develop and build on the best of small-scale community cycling initiatives but to do so on a greater scale, achieve significant outcomes and build a viable replicable model. They recently opened a second community cycling hub in Kensington and Chelsea, west London, in September 2010, and have aspirations to replicate the service further. Bikeworks’ income is earned through contracts to provide a range of organisational cycling services to local authorities, civil society organisations and corporate clients. It also generates income from the retail sale of recycled bikes and the provision of repairs and maintenance services to the public.

The consultation paper looks at how more investment funding can be made available for such enterprises, particularly through fixing flaws in the current state of the financial markets (section 3.10 lists five major areas where markets are not working properly in this regard). Here it is in full:

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