I am absolutely delighted that social investment tax relief has been set at 30%. Some estimates suggest that that might liberate up to £500 million of extra investment into the economy. At a time of austerity and when there is very little public money about—whichever party is in power—we must absolutely seize the possibility of mobilising private capital for public good.
I pay tribute to the Secretary of State, because he has been a pioneer. He set up his social investment fund, which has catalysed the market in Department for Work and Pensions areas. I have spoken to the Secretary of State for Education to try to get something similar in relation to social mobility and educational attainment, and he is very interested. I said to him, “The Secretary of State for Work and Pensions is a bit of a pioneer, so why don’t you get involved in this as well?” I have also spoken to the Minister of State, Department of Health, who has responsibility for social care, to look at social investment bonds for the care of the elderly, particularly in relation to dementia, which is a huge issue for all of us and, indeed, countries across the world. Mobilising private capital to enable us to transform public services is an extremely exciting agenda.
I want to say a word about the Public Services (Social Value) Act, because a whole range of local authorities are now taking up the new powers, including my own in Salford, as well as Liverpool, which has declared itself a social value city, Birmingham, Wakefield, Hackney and Lambeth. People from all political parties and local authorities of all shapes and sizes want to commission in this new way. We now need transparency, through metrics and measurements, so that the people on this playing field can get some recognition.
One of the most exciting things is that some companies in the private sector want to do exactly the same in moving from traditional corporate social responsibility into using their mainstream business model to make a social impact. Companies such as Fujitsu, Veolia, Interserve and CH2M Hill are now looking at their supply chain to see how they can get social enterprises and small businesses to bring them the agility and creativity that such big global enterprises sometimes cannot put into the system. In particular, Fujitsu has done a report
called “Collaboration Nation” about building a very different supply chain. It has told me that it absolutely sees the business case for doing so, because it is able to develop new products. It is also attracting the best talent, because these days young people want to work for an organisation that has values, and to go home at the end of the day being proud of what they do. All those private sector companies want to do that and be responsible capitalists in that way, but we must encourage them and recognise that this will be a long-term agenda.
I say to the Chancellor and the Secretary of State that if we could extend the Public Services (Social Value) Act to goods and infrastructure—that is where the big spend will be in the next 10 to 15 years, not necessarily on services and revenue expenditure—why can we not have social clauses in procurement for High Speed 2, for the possible new airport, or for regeneration projects that bring apprenticeships, get a better supply chain and make a social impact?
As I said, I am delighted that social investment tax relief is being brought forward. We now lead the world in that, and at the G8 meeting that I was privileged to attend we could see how much the United Kingdom’s creativity has taken that forward. There are now a whole range of new social investment bonds. We have just signed one off in Manchester to help young people come out of care, and to provide foster care and adoption, which is an amazing ability.
When I went to Brussels last week I met Commissioner Andor, who was hugely encouraging about social procurement and social investment. We are about to launch some local investment funds. The first was launched in Liverpool two weeks ago, and we would like to have 10 to 15 across the country over the next year. We are hoping to do that in Greater Manchester, bringing together European Union structural social funds with social investment, to provide unsecured loans to social enterprises of £50,000 to £100,000—exactly the kind of loans they need.
All that brings the social economy into the mainstream. We used to think about social enterprise as a niche or an add-on to the mainstream economy, but no longer. If we take what measures we can to make social procurement mainstream, including goods and infrastructure, and to support social enterprises to make social investment and the market grow in the long term, we can genuinely harness the innovation that is often in social enterprise, together with people who want to do capitalism in a more responsible way and the engine of the public sector. In doing that we will show that “doing good” really is good business.
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