This Wednesday, Spring Budget day, will reveal the fate of the sector’s SITR and CBILS campaigns.
With the Government’s Coronavirus Business Interruption Loan Scheme (CBILS) closing to new applicants at the end of this month and its future uncertain, 33 VCSE organisations including Big Society Capital, Social Investment Business, Joseph Rowntree Foundation and Charity Bank, have written a letter that proposes three key asks for Rishi Sunak in advance of the Budget.
- That the successor loan scheme should continue the exemption of creditworthy charities from the >50% trading criteria.
- That it should guarantee cover matched to the distinct needs of charities, social enterprises, and community businesses.
- Without continued access for more social lenders to obtain British Business Bank guarantee accreditation or guarantee allocations available to the sector, the scale and reach of deployment of funding into charities, social enterprises, and community businesses will be limited.
The letter says:
“Unlike conventional business, they face a double whammy of rising demand and falling incomes. Government should work with social investors, who disproportionately fund organisations in areas of deprivation, to provide accessible and affordable financing solutions. While charities, social enterprises, and community businesses have demonstrated remarkable resilience during this crisis, they generate less surpluses than mainstream SMEs and so will need financial support that is appropriate for their specific business models.”
As well as the letter, other action has included a meeting with Kevin Hollinrake, MP and Chair of the cross-party group on Fair Business Banking, which saw Hollinrake table three questions in parliament last month.
The second campaign concerns Social Investment Tax Relief, which enables investors to get 30% off the cost of their investment off their next income tax bill – so if an investor put £100 into an eligible organisation they would get £30 back from government and only £70 of their capital would be at risk. Social enterprises, charities and community businesses have so far raised £15 million using the relief.
The SAVE SITR campaign asks for the Government to extend the Social Investment Tax Relief ‘sunset clause’ for a further five years. With 90% of investments taking place outside of the capital, the campaign partners, Big Society Capital, Social Enterprise UK, Resonance and Co-operatives UK, believe extending the tax relief is a simple way for the Government to support its own Levelling Up agenda.
With this campaign, Big Society Capital Chair Sir Harvey McGrath met Treasury Minister Jesse Norman to discuss the issues last summer and its team are in touch with the officials working on the relief. Last week they also briefed the special advisors in Treasury via email.
Social Enterprise UK estimates that saving and expanding SITR would create 13,500 more jobs and help 4,000 social enterprises over the next five years. In a blog, Big Society Capital Social Sector Engagement Director Mel Mills said that while SITR isn’t perfect, scrapping it in the middle of an economic crisis with no alternative failed to deliver on the Government’s promises to support the UK’s social sector.
104 total views, 5 views today