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Ed Miliband announces new £300,000 scheme to increase private investment in social enterprise

Ed Miliband, Minister for the Third Sector, today announced a new scheme designed to bring more private investment into the social enterprise sector.

The Office of the Third Sector, in the Cabinet Office, is offering limited funding to organisations with strong ideas on how to pull private investment into social enterprises for start–up and growth.

Three organisations can win funding of up to £100,000 each to pilot proposals to incentivise greater private investment in the sector.

The aim of the scheme is to promote innovative approaches to social investment and to increase understanding of the current barriers that exist to investment from the private sector.

Ed Miliband said:

‘Social entrepreneurs around the country combine a driving commitment to social justice with acute business acumen and their innovation should be given every opportunity to succeed.

‘By funding these pilots we are encouraging an increase in the range of sources of finance for social enterprises. We are helping build new opportunities for investors and social enterprises to collaborate.’

To win funding, proposals will need to show precisely how a new structure – or an expanded existing scheme – can facilitate or broker private investment into social enterprises.

The funding will be provided in order to pilot proposals for up to 18 months, at the end of which the organisation compiles a report on lessons learnt during the project.

Organisations interested in applying for this scheme must express an interest by August 14. If your article will run in time, if possible please direct interested parties to the following weblink:
http://ted.europa.eu/Exec?DataFlow=ShowPage.dfl&Template=TED/N_one_result_detail_curr.htm&docnumber=145255%202006&docId=145255-2006&StatLang=EN [External website]
Or at http://www.cabinetoffice.gov.uk

Notes to editors

1. Any press enquiries, please call Campbell McDonald at the Cabinet Office press office on 020 7276 0311.
2. Funding will be awarded for the development of the intermediary infrastructure only and not for onwards investment into social enterprises themselves.
3. In a recent survey of Community Interest Companies by RBS Natwest, 37% said access to finance was the biggest barrier facing them.
4. This is part of ongoing work to remove barriers to finance for social enterprises and the third sector, including Futurebuilders, which is the government–backed £125 million investment fund for the third sector. It offers a mixture of grants, loans and capacity building support to voluntary and community organisations that want to deliver better public services. So far Futurebuilders has approved investments of £54 million in 146 organisations working in five key policy areas: health and social care, education and learning, children and young people, crime prevention and community cohesion.
5. The most recent government statistics show that social enterprises contribute £8.4billion a year to the UK economy, almost 1% of GDP. The Government's Annual Small Business Survey 2005, which for the first time looked at a wider pool of organisations than any previous survey, found at least 55,000 businesses in the UK are classed as social enterprises, accounting for 5% of all businesses with employees, with a turnover of £27billion per year.
6. In recognition of the increasingly important role the third sector plays in both society and the economy, the Prime Minister announced a new Office of the Third Sector in May 2006. Ed Miliband was appointed as the new Minister for the Third Sector, working in the Cabinet Office to Hilary Armstrong, Chancellor of the Duchy of Lancaster. For more information, please go to http://www.cabinetoffice.gov.uk/thirdsector/.

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