Regional Growth Fund projects should prove their impact

The government’s new £1bn Regional Growth Fund should impose radical reporting requirements on projects including triple bottom line and social return on investment (SROI), say leading social enterprise support groups.

The Regional Growth Fund is meant to spark economic growth in communities currently dependent on the public sector. It also aims to help meet the government’s goal of sharing economic opportunities more evenly between regions.

Social Enterprise Yorkshire and Humber’s (SEYH) response to the government consultation on the fund, which closed on Monday, said including community benefit clauses in funding contracts is the only way to ensure the social justice objectives of the fund are met. This included the introduction of triple bottom line and SROI reporting.

SEYH chair Paula Denison said this was especially important given the fact that projects will need match funding from the private sector. She said that the social aims might be given less weight in business plans without the safeguards of social impact accounting and reporting.

‘Where will the private sector match funding come from, and will he who pays the piper call the tune? That’s a worry,’ said Denison.

‘That’s why we need clear levels of accountability.’

The Social Enterprise Coalition has also called for SROI reporting to be used in the fund.

Its response to the consultation states: ‘Bids should be assessed according to the potential impact they can make on communities. The extent to which they have social and environmental benefits should be assessed with a measure such as SROI included.’

However, these were only two of 350 responses to the consultation.

The consultation closure this week was timed to align with the closing date for business secretary Vince Cable’s call for Local Enterprise Partnership (LEP) proposals, as both initiatives are meant to aid regional growth strategies. LEPs will replace Regional Development Authorities and there is speculation that the £1bn fund could be distributed through the LEPs. The government has already said that local enterprise partnerships will have a key role to play in co-ordinating bids to the Regional Growth Fund.

Denison said social enterprises needed to be talking with their local authorities now to make sure they are represented in the LEPs.

‘You need to get in early in building the relationship because it does come down to being known and being trusted,' she said.

SEYH has campaigned to 22 local authorities about the importance of including social enterprise in LEPs and has been met with a ‘mostly positive’ response.

Denison said: ‘I understand that Vince Cable has received more proposals for LEPs than he expected an there will have to be some filtering. Wouldn’t it be great if one of the criteria was those willing to work with social enterprises?

‘In terms of making economic links across the sectors social enterprise is the best vehicle to do that.’

The government will provide further details on the Regional Growth Fund and LEPs in the forthcoming White Paper on sub-national economic growth and the introduction of the Localism Bill.