£11m Cabinet cuts hit social enterprise

Three government funds targeted at social enterprises have had their budgets cut as part of the Lib-Con Coalition’s cost cutting drive.

Minister for civil society Nick Hurd and cabinet office minister Francis Maude today announced £11m is to be cut from the Office for Civil Society (OCS) budget as part of the government’s £6.2bn cuts target.

Hurd said: ‘Government is looking at reducing costs and streamlining its work. The Office for Civil Society is no exception.’

The cuts that will affect social enterprises the most include £1.3m to be taken from Capacitybuilders funding, which includes a significant chunk taken from the organisation’s specific programme of support for social enterprise.

The Capacitybuilders funding for the year ending March 2011 is now £30.855m, down from £32.155m

Responding to the announcement Social Enterprise Coalition CEO Peter Holbrook said: ‘As all government departments are being asked to cut their budgets significantly it is not surprising that OCS is announcing these savings.

‘However, we have repeatedly heard from government that it wants to open up more opportunities for social enterprises and the reality is that scaling up the social enterprise sector will take time, resource and investment.’

He added: ‘The cuts in Capacitybuilders in cancelling new awards will impact the regional support networks for social enterprise, and they play an integral role in reaching social enterprises at a grassroots level.’

Of the £11m total cuts another £130,000 will come from the budget that had been allocated to the soon-to-be-defunct nine English regional development agencies, each of which are allocated £195,000 to support social enterprises. A further £111,000 will come from the Social Enterprise Action Research programme, which was originally set up with £1.3m to support different government departments researching social enterprise solutions to policy problems.

The bulk of the £11m will come from savings in the youth volunteering scheme v. The £15m v match fund, which sees the government match any pledges of support from the private sector, was under-spent by £4.4m in 2009 and will now have its budget cut by £5m. There will also be a £1.95m reduction in the £39m grant to v.

A further £2m in savings will be made from money unallocated in the OCS budget, while the Commission for the Compact will lose £400,000.

At the same time as touting the transparency of their decisions on cuts Hurd and Maude published an open letter to the sector asking for help reaching the £6.2bn target, which is being termed a ‘savings challenge’.

‘We want to tap into the knowledge and experience of local people and organisations on the ground to help us identify ways of doing things better and more efficiently,’ said Hurd.

Holbrook welcomed the invitation to the sector, pointing out the role social enterprises can play in public service delivery.

You can read the letter here