Leave Result Could Threaten Social Enterprises

The results of the British EU Referendum this morning mean that the UK will leave the European Union. Social Enterprise UK are worried that “knee jerk reactions from the state, banks, and big businesses” could negatively impact social enterprises. They also show support for the sector, noting its resilience in the face of potential adversity.

Responding to the result of the EU referendum, Peter Holbrook, Chief Executive of Social Enterprise UK, said: “Our immediate worry is that social enterprises will be affected by knee-jerk reactions from the state, banks and big business. We want to avoid social enterprises facing the pinch by a combination of a freeze on public sector contracts, banks using the decision as an excuse not to lend money, and for-private profit businesses seeking to keep their balance sheets looking good by squeezing their suppliers.  

“In the medium term, we will likely see EU Social Fund spending repatriated, and it is critical that in the future the UK Government commits to spending the same amount (or more) on supporting people into employment and vocational training. Longer term, there are implications for public sector procurement policy and competition law, much of which has been agreed at an EU level before being incorporated into domestic law. 

“There is no blueprint for Brexit. No country has ever left the EU, so we have no real idea just how bumpy a ride the economy is in for. We don’t know what the constitutional implications are for Scotland and ultimately the Union. We do not know how difficult a process the negotiations with the other member states will be, nor what the results of those negotiations will look like. 

“But we do know that when we polled social enterprises earlier this year whether they thought leaving the UK would place their business at risk, nearly 60% said it would not – even though nearly 75% planned to vote to remain in the EU. This is reassuring but not in the least bit surprising – social entrepreneurs are nothing if not adaptable and I have faith that most leaders of social enterprises will see whatever lies ahead as a challenge rather than a threat.”