In 2002, the British government launched a unified Social Enterprise Strategy, and established a Social Enterprise Unit (SEnU) to co-ordinate its implementation in England and Wales, primarily to consult on a new type of company to support social enterprise development. After a consultation, policy development was increasingly influenced by organisations in the conventional "non-profit" sector rather than those with their origins in employee-ownership and co-operative sectors.
The 2003 DTI report on the consultation shows the disproportionate influence of charitable trusts and umbrella organisations in the voluntary sector, and evidence now exists that the voices of progressive employee-owned organisations were marginalised in the course of producing the report. The Social Enterprise Unit was initially established within the Department of Trade and Industry (DTI), and in 2006 became part of the newly created Office of the Third Sector, under the wing of the Cabinet Office.
Following broad consultation, SEnU adopted a broader definition which is independent of any legal model. This latitudinarian definition could include not only companies limited by guarantee and industrial and provident societies but also companies limited by shares, unincorporated associations, partnerships and sole traders.
In April 2012, Prime Minister David Cameron launched Big Society Capital, the world's first social investment wholesaler. Capitalised with a total of £600 million, it will distribute funds to intermediaries that will lend money to social enterprises, charities and community groups.
The first agency in the UK – Social Enterprise London (SEL) – was established in 1998 following collaboration between bodies supporting co-operative enterprise. SEL did more than provide support to emerging businesses: it created a community of interest by working with the London Development Agency (LDA) to establish both an undergraduate degree in social enterprise at the University of East London and a Social Enterprise Journal (now managed by Liverpool John Moores University).
SEL built a network of over 2,000 social enterprises and social entrepreneurs, directly brokered over 500 social enterprise jobs under the DWP's Future Jobs Fund and delivers consultancy and business support across the world.
The national membership and campaigning body for the social enterprise movement in Britain is Social Enterprise UK (SEUK) (previously the Social Enterprise Coalition), and this liaises with similar groups in each region of England, as well as in Northern Ireland, Scotland and Wales.
Social Enterprise Mark CIC is the accreditation body responsible for the only internationally available social enterprise accreditation - the Social Enterprise Mark and Social Enterprise Gold Mark. It exists to recognise and promote the capabilities of social enterprises as competitive, sustainable businesses, dedicated to maximising social impact above shareholder profit. It ensures the social enterprise business model remains ethical, credible and commercial through accreditation. There are over 200 organisations that currently hold Social Enterprise Mark/Gold Mark accreditation. The assessment and accreditation process is overseen by an independent Certification Panel, which ensures that the Social Enterprise Mark/Gold Mark criteria are rigorously applied.
In 2002, the National Council for Voluntary Organisations (NCVO) established the Sustainable Funding Project. Using funds from Futurebuilders England, Centrica and Charity Bank, this project promoted the concept of sustainability through trading to voluntary groups and charities. From 2005 onwards, NCVO began using the term social enterprise to refer to voluntary sector trading activities.
Types of Social Enterprises I the UK
In the British context, social enterprises include:
· community enterprises,
· credit unions,
· trading arms of charities,
· employee-owned businesses,
· development trusts,
· housing associations,
· social firms - a business set up specifically to create employment for people otherwise severely disadvantaged in the labour market,
· leisure trusts and
· the newly established community interest companies.
As a new legal form, the community interest company (CIC) are a new type of limited company designed specifically for those wishing to operate for the benefit of the community rather than for the benefit of the owners of the company. This means that a CIC cannot be formed or used solely for the personal gain of a particular person, or group of people. Legislation caps the level of dividends payable at 35% of profits and returns to individuals are capped at 4% above the bank base rate. CICs can be limited by shares, or by guarantee, and will have a statutory "asset lock" to prevent the assets and profits being distributed, except as permitted by legislation. This ensures the assets and profits are retained within the CIC for community purposes, or transferred to another asset-locked organisation, such as another CIC or charity. A CIC cannot be formed to support political activities and a company that is a charity cannot be a CIC, unless it gives up its charitable status. However, a charity may apply to register a CIC as a subsidiary company.
Whereas conventional businesses distribute their profit among shareholders, in social enterprises the surplus tends to go towards one or more social aims which the business has – for example education for the poor, vocational training for disabled people, environmental issues or for animal rights, although this may not always be the case (Schwartz, Rodney. "Do name and form matter for social enterprise?". Third Sector Magazine. Retrieved 15 April 2015 - http://www.thirdsector.co.uk/rodney-schwartz-name-form-matter-society-better-off/social-enterprise/article/1317861 ).
Social enterprises are often seen as distinct from charities (although charities are also increasingly looking at ways of maximising income from trading) and from private sector companies with policies on corporate social responsibility. (“Charity vs social enterprise: What's best for your new business?". Startups.co.uk. http://startups.co.uk/charity-vs-social-enterprise-whats-best-for-your-new-business).
An emerging view, however, is that social enterprise is a particular type of trading activity that sometimes gives rise to distinct organisation forms reflecting a commitment to social cause working with stakeholders from more than one sector of the economy.