On 11 October, the Social Investment and Finance team in the Office for Civil Society changed its name and ambition. Now it will be the Government Inclusive Economy Unit with a remit to innovate and contribute to the broader agenda of an economy that works for all.
So what is it for? What can government do to make an inclusive economy real and not just a name?
The referendum revealed a deep divide in society, between the people doing well with a modern open economy and those who had seen no benefit not just recently but over years. Some of that was bad corporate behaviour and corporate greed. But much more was a lack of focus on the problems faced by people struggling to keep heads above water – the people “just coping”. The neglect of their issues has contributed to a profound loss of trust in politics, companies, all kinds of organisations, even democracy itself. This isn’t just a UK thing – Europe and the US have it too. But it certainly is a key issue for us in the UK.
The idea of an inclusive economy that works for all is right for our times. What does it mean? Addressing corporate excess and improving governance for sure. But from our point of view as an investor for social impact, there is much more. Developing social enterprise and mutuals; encouraging companies into creating positive social value direct or through investing, supply chain, or sharing their expertise; tapping into the 1 in 4 of entrepreneurs creating new ventures who want to achieve social or environmental benefit; bringing players together to build place based inclusive economies.
There are key issues that a “social venturing” approach could address. The poverty premium, where people on low incomes end up paying higher prices for basic essentials. Affordable housing. Rebooting the systems for personal credit and SME lending in disadvantaged areas – a critical area which has been supported by EU funds and guarantees for many years, and which could collapse without urgent attention. And there’s plenty more.
Few social problems are amenable to a single tool. We need an inclusive approach to achieve an inclusive economy. There are enough willing players to make it happen, nationally and locally. Social enterprise places like Plymouth and Oxford, local funds as in Bristol and Bath, local Social Stock Exchange in Liverpool; so many initiatives all around the country. Can we get Local Enterprise Partnerships (LEPs) involved as has been achieved in Oxfordshire? Can we free up resources through tax breaks - boosting SITR and simplifying CITR – or opening out social pensions and savings or social crowdfunding? Can we seize the chance of Brexit to improve public procurement systems?
There will be work to do to make an inclusive economy inclusive in style as well as result. Too often the people living with the problem are not given the chance to develop the solution. That has to change. The consumer design-led work for the Fair for You enterprise is a great example of how valuable that engagement can be.
So, for me the inclusive economy part of the new unit is on the button. How about the cross government side? Vital for sure – most of the big challenges are with the major spending departments and/or with Treasury or BEIS. Will the new unit get traction with them? Will they have the capacity in a relatively small team? There have already been some comments that it might just be talk.
I take it the other way around: it will work if we in the social sector help make it work - and the people we are here for need us to succeed.