HISTORIC PRESS RELEASE : Enterprise – A vital force against social exclusion [November 1999]

The press release issued by HM Treasury on 2 November 1999.

Encouraging enterprise has got a vital role to play in generating jobs and helping to build stronger communities, Stephen Timms and Patricia Hewitt said today.

They were speaking at the launch of a new report, Enterprise and Social Exclusion, produced by Policy Action Team 3, in response to the Social Exclusion Unit’s publication last year on deprived neighbourhoods.

The report sets out a new agenda for Government, banks, business support agencies and others to link enterprise and regeneration – through better advice and access to finance, and more support for a culture of enterprise.

Stephen Timms, Financial Secretary to the Treasury and Champion Minister for the PAT, said:

“We need more new and successful businesses in our least well off communities. People who have a business idea, and want to make a go of it, need to get the right support to give them the best chance of success. And existing firms need to be able to get advice and finance to help them prosper.

“This report sets out an ambitious agenda to promote enterprise as a force against social exclusion. It recognises that not everyone will have the skills or aptitude to run a business. But everyone with the potential to succeed needs to be given the opportunity to do so.

“There’s more that can be done by all the parties with a stake here to
give enterprise in deprived areas the attention it deserves – and the report makes some clear proposals. Some recommendations have already been implemented, and we’ll be looking closely at the rest. Much of the work going forward will fall to DTI, and I know Patricia Hewitt is relishing the task.

“I see this report as a contribution not just to the debate on social exclusion but also to the Government’s broad agenda for an enterprise society. Enterprise is an outlook, an attitude of mind, that needs to be encouraged right across society, and the proposals here are about one facet of that broader task.”

Patricia Hewitt, Minister for Small Business at the DTI, said:

“The job of the SBS is to provide top class support to start-ups and SMEs right across the country. That must include our most disadvantaged communities.

“There is just as much entrepreneurial potential in the poorest council estates as in the wealthiest suburbs.”

The key recommendations are:

Better support for enterprise

• the new Small Business Service should promote enterprise in deprived areas, as part of its remit to promote small business;
• Business Links should develop plans with others to support enterprise and business growth in deprived areas;
• incubators should be encouraged – they can add real value in building successful businesses;
• Regional Development Agencies should advise the SBS on regional priorities, and ensure regeneration programmes give real weight to developing enterprise.

Better access to finance

Steps to promote innovation in getting finance to enterprise in deprived communities:

• a national challenge fund to provide capital to community finance initiatives – who act as a bridge between mainstream institutions and entrepreneurs in deprived communities
• access to the Government’s loan guarantee scheme, on an experimental basis, to encourage commercial lending to community finance initiatives

Removing barriers

• social enterprises to be recognised as a group of businesses deserving support
• self-employment is a valid route from benefits to work, and should be recognised as such
• Government to promote involvement of mainstream businesses in deprived communities.

Two recommendations have already been agreed:

• Patricia Hewitt announced on 20 September the creation of a national network of volunteer business mentors, funded by DTI;
• the Bank of England has agreed to monitor the provision of finance for business in deprived groups and communities, and to report regularly on this.