Responding to yesterday’s Budget, a group of leading social economy organisations have welcomed the Government’s commitment to review the finance barriers facing social enterprises.

The organisations, including Social Enterprise UK, the Social Investment Business and Big Issue Invest, are calling for it to be an independently chaired review to ensure it will bring about real change.

The group expressed disappointment that recommendations to Community Investment Tax Relief (CITR) to encourage private investment into trading charities and social enterprises, were considerably watered down.

They have been campaigning for the CITR scheme to be extended and reviewed to make it easier for individuals and corporations to invest, especially in those operating in deprived communities.

The professional bodies say it’s unfair that social enterprises (which operate without shareholders) are not entitled to tax relief, but standard businesses are - through the Enterprise Investment Scheme.

They assert an equivalent is needed.

The groups also claim that a robust review, with an independent chair, has the potential to signal to potential investors the Government’s support for social investment.

Findings from Fightback Britain (2011), the largest survey of social enterprises, reveal that access to finance and cash flow problems are the dominant concern of social enterprise – 44% of respondents claim the availability and affordability of finance to be their greatest barrier.

This is markedly different to SMEs who rank the availability of finance as only their sixth greatest obstacle to success after the state of the economy, cashflow, taxation, competition and regulation.

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