By Sarah Shearman
LONDON, Oct 22 (Thomson Reuters Foundation) - When Josh Babarinde came up with the idea of a company hiring young ex-offenders to fix phone screens, he found Britain a good environment for accessing investment and sales took off.
Babarinde said Cracked It found its niche - and the awards and accolades rolled in - with Britain found to be one of the top nations in policies and support for social entrepreneurs in a global poll by the Thomson Reuters Foundation in 2016.
Three years on the sector is thriving in Scotland - but conditions for ventures with a mission to succeed commercially while helping society were stalling elsewhere in Britain with experts saying Brexit had dominated the political agenda.
The second poll of experts on the best countries for social entrepreneurs by the Thomson Reuters Foundation, released on Tuesday, found Britain had slumped to 13th place among the world's 45 biggest economies from third slot three years ago.
Babarinde, who recently announced plans to run for public office, said it was frustrating to see the pace of the sector's development slowing as social enterprise slipped down the political agenda.
"We have the capacity for a social innovation policy revolution - tax breaks for social enterprises, social innovation in the curriculum - yet we've only seen a very slow evolution over the last couple of years," Babarinde said.
"There's never been a need more than now for social enterprise. We need to treat social enterprise more seriously."
Britain's fall in the poll, produced in partnership with Deutsche Bank, came as experts cited less favourable business conditions and government support for social entrepreneurs and a fall in public awareness about what they do.
Britain's well-established social enterprise sector – with more than 100,000 social enterprises contributing 60 billion pounds ($78 billion) to the economy – is held up as an exemplar, tackling issues like homelessness, knife crime and pollution.
But since Britain's 2016 referendum, the country has become embroiled in a prolonged political crisis with no clarity on when and how the nation will depart the European Union.
"The political environment is so uncertain, unpredictable, and more extreme than it has previously been," said Peter Holbrook, chief executive of Social Enterprise UK, the trade body representing the sector.
"Whether you're a social business or mainstream business, this is not a great place – given all of the uncertainties and unpredictability – to start a business."
Britain was been hailed an example after launching a social enterprise strategy in 2002, issuing the first social impact bond in 2010, and introducing social investment tax relief.
It created a law in 2013 for all public sector commissioning to factor in social value, which it expanded this year.
But when about 900 social enterprise experts were asked in this year's poll how favourable conditions were for social entrepreneurs to start and grow their businesses, Britain slumped 10 places to 13th slot.
Asked if government policy supported social entrepreneurs, Britain slipped eight places to rank 15th.
A decision in 2016 to move responsibility for Britain's social enterprise sector from the Cabinet Office - a department at the heart of government - to the Department of Culture, Media and Sport (DCMS), left many industry leaders feeling side-lined.
A DCMS government did not comment directly on the results of the poll but said Britain was committed to supporting the sector which has a vital role in changing lives for the better.
"As set out in our Civil Society Strategy, we are placing social value at the heart of central government's estimated 49 billion pounds ($60 billion) of procurement spending each year," he said.
Cliff Prior, chief executive of Big Society Capital, said social entrepreneurship had been high profile in the political scene in Britain from the 1990s and to 2016 and it could be time for the well-established sector to stand up on its own more.
"Government is still important, as it sets the tax rules, sets the regulatory system, sets the procurement system ... but we should do a lot of our own sector development," he said
But while Britain as a whole declined in the poll, Scotland bucked the trend and was seen as a rising star of the sector.
The Scottish government, led by Nicola Sturgeon, in 2016 launched a 10-year strategy to promote social enterprises with about 5,600 running in Scotland employing about 82,000 people.
Since 2007 students in about 1,000 schools and colleges have been taught about social enterprise with the aim to teach the topic in all schools by 2026, according to Social Enterprise Academy (SEA), a training organisation in Scotland.
"Governments in the UK rarely think beyond their five-year terms, which has made it difficult to address issues like social care, housing or the attainment gap," said David Bryan, an SEA regional manager.
"The 10-year strategy has focused minds in the government on investing in the social enterprise sector, so that it can help government address some of these really wicked issues."
Glasgow-based Sophie Unwin, who set up Remade Network, a social enterprise to promote the repair and reuse of household goods, said there was a lot of support for social enterprises.
"But then it's a smaller place than England so you feel that support goes a lot further," she said.
($1 = 0.8109 pounds)
(Reporting by Belinda Goldsmith @BeeGoldsmith; Editing by Belinda Goldsmith. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's and LGBT+ rights, human trafficking, property rights, and climate change. Visit http://news.trust.org)
Our Standards: The Thomson Reuters Trust Principles.