Answers issued to Members on 30 July 2007
[R] signifies that the Member has declared an interest.[W] signifies that the question was tabled in Welsh. Contents
Questions to the Minister for Social Justice and Local Government
Questions to the Minister for Social Justice and Local Government
Dai Lloyd (South Wales West): What was the outcome of the Social Enterprise Joint Working Group’s investigation into options for financing the social enterprise sector and what use of such options has been made to date?(WAQ50258)
The Minister for Social Justice and Local Government (Brian Gibbons): I’m answering this as Minister for Social Justice and Local Government.
A sub group of the Social Enterprise Joint Working Group re-examined the case for an all Wales Community Development Finance Institution (CDFI) and the provision of a variety of loan and investment finance solutions for social enterprises.
The group included Finance Wales, the Community Development Finance Association (CDFA) and Co-operative and Community Finance (formerly the Industrial Common Ownership Fund). The consensus was that there was no evidence that an all Wales CDFI was needed, or if established would be sustainable. Small and medium sized loans are available from Finance Wales and Co-operative and Community Finance. The latter is one of only three UK institutions to fully benefit from the Community Investment Tax Relief scheme and makes up to one third of its loans in Wales.
The Community Investment Fund operated by the Wales Council for Voluntary Action and the Social Enterprise Development Fund operated by the Coalfields Regeneration Trust provide access to grants for newly established social enterprises and loans for those which are further developed.
Access to very large or very small loans can be more difficult to find but HM Treasury are currently consulting on proposals which might allow credit unions to provide micro finance.
Dai Lloyd (South Wales West): What strategies are being developed to encourage more social enterprises to move from grant dependence and toward sustainability?(WAQ50259)
Brian Gibbons: I’m answering this as Minister for Social Justice and Local Government.
The Social Enterprise Joint Working Group (SEJWG) which is made up of representatives from the public, social economy and voluntary sectors, including several social enterprise practitioners, has identified four priority areas: procurement, finance, mentoring and asset transfer/management. All are vitally important if we are to effect the cultural change necessary to move Welsh social enterprises away from grant dependency. Progress is being made but the shift will take time.
SEJWG sub groups have been established bringing in other partners such as Value Wales. As a result of the work done so far the first mentoring pilot will begin shortly in north Wales; and the Development Trusts Association Wales has been funded to work on the asset transfer/management agenda.
Social enterprises can and do provide innovative solutions to local problems tackling under represented markets for example credit unions providing affordable credit; or market failures in local service delivery such as childcare or social care. The Community Economic Development and Enterprise strategic frameworks under the new structural funds programme will aid progress by encouraging social enterprises to bid for contracts, rather than grants to provide such services in the future.