How social enterprises and communities can unleash the power of the British people | The social enterprise magazine
1. Overhaul of taxation …
The two speakers called for major changes in taxation to stimulate social entrepreneurship in communities.
Reed (pictured) called for the removal of trade tariffs across the board – “an extremely unfair old-fashioned tax” which has created “unfair competition” between main street stores and online retailers who pay lower rates for warehouses.
He added that commercial tariffs discouraged the scaling of small businesses to the heart of the community, including social enterprises, because larger space means higher tariffs. “Why put a cap on people’s ability to achieve their full potential in life, which would benefit them, their families, their community, but also all of us? ” He asked.
Instead, the tax system should be used to “support behaviors that we see as desirable,” Reed said. Taxation should be skewed in such a way as to support businesses working towards more desirable outcomes, be they social enterprises or other forms of business.
Government tax rules could favor, rather than penalize, social and community businesses and stimulate businesses
Prendergrast pointed out that many councils have already lowered or eliminated commercial tariffs for social enterprises and charities (the latter can usually claim a reduction of at least 80%), which should happen “across the board” to his opinion.
Going further, she called on the government to reduce corporate taxes to zero for companies that were driven by goals rather than profit.
“Government tax rules could favor, rather than penalize, social enterprises and community businesses and stimulate businesses,” she said. The example of existing business rate cuts showed that there was “no reason we couldn’t do it. [the same] for corporate tax, other than political will ”.
2. … and the system itself
The change in economic systems that was needed was far more important than just “tinkering with existing policies,” argued Prendergrast.
“We should have an economic system – the entire economic system we live in – that promotes positive economic behavior. “
The current system, she added, did “the opposite of that” and “fostered damaging extractive externalities” that were damaging both to society and to the planet.
“Serious change” was needed, and the political levers to achieve it were already there, according to Prendergrast. As an example, she said that each private sector beneficiary of future regeneration and upgrading programs might be required, in return, to cede a portion of the equity to the community in which it operates. “It would connect communities with the businesses that concern them and give them a long-term interest in that relationship, while providing them with ongoing funding. “
And enabling social enterprises and charities to lead profound systems change required long-term funding, added Prendergrast. The economic damage that had been “entrenched” over the past 50 years could not be repaired “within a 12-month project window,” she said.
Finding other ways to secure long-term social enterprises and charities – like community ownership or one-time capital funding from the government to finance a building for example – was also necessary and already existed, she added. .
It was about finding ways to ‘finance smart’ to give social enterprises a sustainable solution and put the assets in the hands of the community ‘so they can operate on their own’, she said. .
Above, clockwise from top left: Yvonne Field, Steve Reed and Jessica Prendergrast at the Social Enterprise Futures conference
3. Rethinking the role of local government
More power should go to communities, both speakers believed – but they had different views on the role of local government in achieving this goal.
Reed, who was the head of Lambeth council in south London (which is a ‘cooperative council’ where residents have a greater voice in decisions) between 2006 and 2012, said the answer lay in sharing the power through local government and giving more control to communities.
One way to do this was to involve service users in ordering decisions, instructing them to decide which service was best for them instead of being passive recipients. He also suggested reconsidering planning reforms to give local councils and communities more decision-making power and ensure that disused spaces become community property.
Communities should also have more say in how the money allocated to them is spent, he argued: “Where it happens, it opens up more innovation and creativity,” he said. said Reed.
In many places … local government often retains a really impressive ability to stop anyone from taking action
But Prendergrast, whose social enterprise runs community-led regeneration projects in Watchet, a town in southwest England, has warned against letting local government hamper the community initiative. While in some places the councils have supported community action, she said, “in many places, despite very few resources to act in economic development, local government often retains a really impressive capacity to prevent anyone from acting “.
There is no doubt that local government should receive more funding, she added, but any “local government revival” should not become a mechanism through which to “flatten the seedlings” of community initiatives.
4. Embrace the “attachment economy”
Prendergrast advocated for a new type of economic structure with local communities at its center which she called “the attachment economy”. The guiding principle of it was a bond (attachment) to people, place and period of time. “This is what makes us feel like we belong,” she said, explaining that social enterprises and community enterprises were examples of structures operating within this framework.
She said: “Social entrepreneurs want to participate in building a new and better future with an economic settlement that values something other than financial value: social, human and environmental value. They do this by incorporating attachment, in one form or another, into their business models.
Social enterprises and community enterprises “were showing how attached enterprises can effect change, create jobs, put people first, care for the environment and rebuild relationships,” she added. The community company had shown that it was not about sticking bandages, she argued, but rather “providing a really demonstrable way of replacing the faulty system with something else”, she said. she declared.
Top photo: Antwerp Arms Community Pub in Tottenham. Courtesy of the Power to Change.
Photo of Steve Reed MP by Chris McAndrew for the British Parliament.
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