Is the government watering down the definition of social businesses?


 Is the government watering down the definition of social businesses?

In a recent blog, Peter Holbrook, the chief executive of Social Enterprise UK has criticised the exclusion of charities and social enterprises from the Cabinet Office’s review on mission-led businesses.

This criticism is sparked off the back of the Cabinet Office’s announcement that it was calling for evidence for its review into mission led businesses in May. SEUK has claimed that the advisory panel is lacking in expertise on the matter and that the review should be headed up by the Department for Business, Innovation and Skills.

Holbrook said: “It’s not uncommon for government reviews to disappoint, but it’s quite rare for a review to disappoint before it has even begun. Yet that is the view from many within the social economy sector at the government’s review of mission-led businesses.

Holbrook added that “judging by the nature of the review team, the government intends to broaden the social investment market by watering down the definition of what 'social' is.” And that “ill-defined terms” only serve to “conflate and confuse”.

“All social enterprises and charities are mission-led but aren't included in the scope of this review; all our members are interested in profit and impact,” he said. “It will be difficult to communicate clearly as a profit-with-purpose, mission-led, community-business social venture - because not even the organisation itself will know what it means.”

“Quick fixes tend to turn out as bodged jobs. The expert advisory panel is missing authentic voices of recognised, established and trusted social businesses. Where are the historical insights of the likes of Timpson, Rowntree, John Lewis, Lush, and decades of Quaker-inspired businesses? Where are the voices of social enterprise and co-operatives bringing their expertise in the field? Let us hope that the review group draws on the experience of a wider set of perspectives. The insights of those who have set about protecting a social purpose, with or without success, is critical.

"It is crucial that we strengthen the social responsibility of mainstream businesses, which is why it is disappointing that the Department for Business, Innovation & Skills do not appear to be backing this review."

Announcing the review earlier this week, the minister for civil society, Rob Wilson, said: “Mission-led businesses have the potential to revolutionise the way we solve some of our biggest social challenges. This review will help us find new ways to tap into their full potential, helping us to improve the lives of those in most need whilst creating a more compassionate society.

“I welcome as much input as possible into this review to make sure that we get this right. I want every entrepreneur to be able to easily establish a business that commits them to making social as well as an economic impact on society if they chose to."

Andrew Croft, Chief Executive of CAN states, “While it is excellent to see so many shareholder led organisations moving to a more social perspective, reflecting the trends in employee and consumer pull, it would be better to see greater representation from asset locked social enterprise on the panel for the social business review.”

The panel that the Cabinet Office has selected is:

  • Nigel Wilson (CEO, Legal & General Group plc)
  • Natalie Campbell (founding partner, A Very Good Company)
  • Luke Johnson (founder and chairman, Centre for Entrepreneurs)
  • Loughlin Hickey (trustee, Blueprint for Better Business)
  • Andrew Goodman (partner, McKinsey & Company)
  • Marcello Palazzi (founder, Progressio Foundation)
  • Antony Ross (partner, Bridges Ventures)
  • Annika Small (co-founder, Centre for Acceleration of Social Technology)
  • Frank Welvaert (managing director, Johnson & Johnson Corporate Citizenship Trust)
  • Monique Villa (CEO, Thomson Reuters Foundation)

Category: Sector news