Cooperatives and Social Enterprises

Treasury written question – answered on 29th June 2022.

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Photo of Rachael Maskell Rachael Maskell Shadow Minister (Digital, Culture, Media and Sport)

To ask the Chancellor of the Exchequer, whether his Department is taking steps to encourage the establishment of more social businesses and cooperatives.

Photo of Rachael Maskell Rachael Maskell Shadow Minister (Digital, Culture, Media and Sport)

To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential merits of a co-operative business incubator for growing the social business sector.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The Government recognises the value of co-operatives. They offer a different form of running a business, with a focus on delivering the services their members and communities need. Social enterprises have an important role to play in levelling up the country. As set out in the Levelling Up White Paper (LUWP) the Government is committed to:

o supporting social organisations and entrepreneurship to flourish in left-behind places and generating evidence on what works o building on and augmenting existing support for the sector o encouraging the next generation of social entrepreneurs.

The Government is committed to having a thriving social businesses and co-operative sector and helping to support current and establish further businesses which serve local communities up and down the country. At Budget 2021, the Government announced the £150m Community Ownership Fund. This allows community groups, including social businesses and cooperatives, to bid for up to £250,000 matched-funding to help them buy or take over local community assets at risk of being lost and run them as community-owned businesses. As of May 2022, 39 Projects across the UK have been announced to benefit from the fund.

The Government has provided significant support to the co-operative sector in recent years and has sought to improve the business environment for co-operatives and mutuals. The Co-operative and Community Benefit Societies Act 2014 helped cut through the legal complexity involved in running a co-operative, improving their competitiveness. The ability of co-operatives to raise £100,000 of withdrawable share capital per member, increased from £20,000 in 2014, has also ensured that co-operatives have the necessary flexibility to raise funding and compete more effectively with companies.

Data published by the FCA in May 2021 showed that there was a net increase of 108 co-operative and community benefit societies in 2020-2021, compared to a net decrease of 204 societies in 2016-2017.

Business incubators and accelerators play a crucial role in helping businesses start and grow, including social businesses and cooperatives. In 2019, BEIS published the research paper Impact of Business Incubators and Accelerators in the UK, which reported that most start-ups who used an incubator or accelerator considered them to have been significant or even vital to their success.

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