CABINET OFFICE News
Release (CAB/016/08) issued by The Government News Network on 27
February 2008
Phil Hope,
Minister for the Third Sector, today announced that a radical
proposal to set up a £10million Risk Capital fund for Social
Enterprises will go ahead. The fund will be the first of its kind
for social enterprises and will particularly benefit them at the
critical start up and early growth stages of developing their business.
Through extensive consultation, social enterprises have told the
Government that equity or equity-like investment is a crucial
finance option for the long-term sustainability of the sector.
Therefore, the fund will be run as a 'pathfinder investment
scheme' where the Government's £10million investment
will be matched by private and independent investors. This will
ensure a legacy by building relationships and understanding
between social enterprises and commercial investors.
Phil Hope, Minister for the Third Sector, said:
'I'm extremely excited about this fund and what it
means for the long-term development of social enterprise as a
mainstream business option. Investors are increasingly looking to
maximise their profits whilst also being able to benefit the wider
world. I hope that the legacy of this fund will be to show
investors the potential of ethically driven investment. Although
this method of investment will not suit all social enterprises I
am encouraged that this initiative will open up social enterprises
to a greater choice of investment opportunities.'
Jonathan Bland, Chief Executive of the Social Enterprise
Coalition, said:
'We welcome the fund as a step in the right direction for
helping social enterprises scale up. We feel it is a useful pilot
for increasing vital risk capital investment into social enterprise.'
The Government will appoint one or more independent fund managers
following a tender process. Under the rules of the investment fund
the Government will make the same return on investments as
independent investors. It is expected that the fund will open to
applications in the autumn.
The Risk Capital investment fund was first recommended in the
Government's Social Enterprise Action Plan published in
November 2006.
Notes to Editors
1. The Government defines social enterprises as; businesses with
primarily social objectives whose surpluses are principally
reinvested for that purpose in the business or in the community,
rather than being driven by the need to maximise profit for
shareholders and owners.
2. The social enterprise action plan: 'Scaling new
heights' was published in November 2006 by the then
Chancellor of the Exchequer, Gordon Brown. It aims to open the
door to thousands of new social enterprises, raise awareness of
what they can achieve and encouraging more people to make a
difference, either by involvement or investment. It is available
online at: http://www.cabinetoffice.gov.uk/third_sector/social_enterprise/action_plan/
3. The Office of the Third Sector (OTS) in May 2006 to drive
forward the Government's role in supporting a thriving third
sector, and join up sector related work across government.
4. The Social Enterprise Coalition (SEC) acts as a voice for
social enterprise and provides a national platform for showcasing
its benefits. SEC holds for the annual VOICE social enterprises
conferences. For further information please see: http://www.socialenterprise.org.uk/
Cabinet Office Press Office 22 Whitehall LONDON SW1A 2WH
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