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Autumn Statement: what it says and how social entrepreneurs can respond

Autumn Statement: what it says and how social entrepreneurs can respond

Written by

Kevin Armstrong

Policy Lead

After much delay, the UK Government's Autumn Statement arrived, with its announcement coinciding with Social Enterprise Day, of all days. Its disappointing lack of support for social enterprises highlights that we need to campaign more powerfully than ever to secure the support the sector deserves.

The cost-of-living crisis is already being personally felt by social entrepreneurs, as well as by staff, social enterprises, and the communities being worked with too. Looking at the Autumn Statement, I'm afraid social entrepreneurs will face even tougher times ahead across each of these fronts.

The Office for Budget Responsibility says real household disposable incomes (the amount of spare money we might have) is going to reduce significantly and won't recover to last year's levels until 2027. Everybody social entrepreneurs work or trade with is likely to be worse off in the period ahead.

From April next year the National Living Wage will increase 9.7% to £10.42 an hour, benefits and pensions will be uprated 10.1%, the benefits cap will rise, and cost-of-living payments will increase for those eligible.

While this sounds positive and was something many charities and organisations have been asking for - these changes will be offset by inflation, which is forecast to remain high well into 2023, bolstered by the Government's decision to make the Energy Price Guarantee less generous for households for the next financial year (increasing the cap from £2,500 to £3,000).

The Chancellor's choice to freeze most tax thresholds means any extra pounds earned won't fully translate to take home pay, and he's also allowing Council Tax to increase by as much as 5%. Expectations are that the base rate could yet rise further as well, meaning mortgages, rents and mainstream loans could remain unaffordable to many.

The outlook isn't currently any better from a wider business perspective either I'm afraid. Total uncertainty remains about the future of the Energy Bill Relief Scheme for businesses. (Read about the current discounts). The Government's flawed review of this support – informed by an alarmingly inaccessible survey – won't announce its findings until later next month, and we may have to wait even longer for actual decisions to be made. This will give ventures and suppliers less than three months to plan for a potentially significant increase in costs.

For those who pay business rates, the Chancellor provided a few crumbs of comfort, but not enough. He gave the assurance that any small businesses losing eligibility for Small Business Rate Relief or the Rural Rate Relief will see a bill increase of no more than £50 per month in 2023-24, but that's still an increase nonetheless. Eligible retail, hospitality, and leisure businesses will at least get their rate relief extended and improved next year.

Making procurement easier for social businesses has been a priority for the sector, but it doesn't look like it will get any easier to win worthwhile government contracts as some UK Government departments are set to suffer budget reductions in the years ahead – such as the Department for Levelling Up, which manages things like the UK Shared Prosperity Fund. The outlook is slightly more positive for those hoping to win contracts with the NHS or schools, but their improved budgets will face understandable pressure to increase workforce pay. We are not yet sure how the devolved governments plan to use their allocated budgets.

As things stand, it's clear to me that unless greater grants and patient, flexible, compassionate social investment can become available, the social enterprise sector will shrink.The innovative and critical services social businesses provide to society are even more crucial in times of crisis, and organisations like UnLtd will champion them until we run out of breath.

Social entrepreneurs share a vision for a better world, but this vision can only be realised if barriers are broken down that block progress and risk regression. Better support for the sector is still possible – whether it's dormant asset-backed finance, improved tax reliefs for social investment, or longer-term support with energy bills – but we all need to make our case powerfully to policymakers. One opportunity for social entrepreneurs to speak directly with MPs is UnLtd's 'Power of Social Enterprise' online event, which we urge you to register for and attend.

We will also be following this with two more blogs sharing what we're doing at UnLtd to make a difference for social entrepreneurs during the cost-of-living crisis, how we're flexing and adapting our own support and where our funding is increasing.

For immediate advice and support around the cost-of-living crisis:

Please do share any other resources you've found helpful, and we will update this list as we find them too.