October 2, 2013
Peter Holbrook on today's social enterprise challenges and opportunities
While there’s much about the social enterprise sector generating energy and hope, Peter Holbrook says two significant barriers continue to dog individual enterprises: access to financing and public sector commissioning and procurement.
As most social enterprises aren’t able to distribute equity in exchange for investment, they often find themselves hitting a brick wall when they need to raise capital. This continues to be the case even in the U.K. where the Community Interest Companies legislation, launched in 2005, enables some level of equity distribution.
This scenario begs the question whether social enterprises need to bend to meet the needs of the financial institutions or if the latter needs to evolve, says Peter, CEO of Social Enterprise UK.
“I think both do have to meet each other in the middle,” he adds, noting the access-to-finance problem is beginning to be addressed through social impact bonds in his country, social benefit bonds in Australia, crowdfunding and community shares, as a few examples.
“There are new solutions emerging very rapidly, which gives me a lot of hope,” says Peter. “But we’ve still got a long way to go to genuinely meet the financial needs so the sector can grow at the rate that would allow it to fulfill its potential.”
The second perennial problem, not only in the U.K., but across the globe, is governments’ ongoing struggle to “get their heads around small providers, particularly social enterprise,” to deliver services they require. “We desperately need to see a much smarter, much more sophisticated public sector procurement,” says Peter. A few solutions are arising, including personal budgets, which allow systems to have their own budgets to purchase their own services, rather than the state buying services on behalf of a system.
The U.K.’s new Social Value Act – which requires all systems spending public funds to factor in the principle of social value – is another development that gives him hope. In making purchasing decisions, consideration must be given for how those decisions might lead to job creation, apprenticeships for unemployed people, new opportunities for people who have a disability, a reduction in carbon and various other social impacts.
Social Enterprise UK was instrumental in pushing the Social Value Act through parliament to become legislation.
Peter is chairing the Social Enterprise World Forum (SEWF) slated for Oct. 2-4.
An attendee of all but one past forums, held each year in a different country, he says he’s eagerly anticipating the event in Calgary, Alberta, Canada.
“There’s nothing more inspiring than meeting up with your comrades and your colleagues, friends and associates from right across the globe and finding out what’s going on. It’s refreshing, it’s energizing, it’s good for the soul.”
More to come on the UK’s Community Interest Companies legislation and the impact it’s had since its introduction in 2005.
Writer: Michelle Strutzenberger
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