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Cameron outlines new deal for social enterprises

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Voluntary groups and social enterprises should be able to keep a share of profits made from delivering public services, the Conservative Party has said.

In a new policy green paper, “Voluntary action: a stronger society in the 21st century”, the Tories said they would “establish a level playing field” between voluntary and private providers of public services by allowing them to share “substantially” in surpluses created by their work.

The paper, which was launched by Tory leader David Cameron, also said contracts would last a minimum of three years and be written to a standard format.

It proposed a return to grant funding on the grounds that public bodies should trust charities they knew to make good use of public funds. The paper said contracts should only be used rather than grants “where there is a clear justification”.

The Big Lottery would become the Voluntary Action Lottery Fund, independent of government, and would not see its funds “cannibalised” to support government initiatives, said the paper.

The paper also took forward proposals on social enterprise zones recommended by a Tory taskforce last year. The ideas included a Social Investment Bank to provide capital for the zones and the party is considering the idea of tax reliefs on investments in the zones modelled on the venture capital reliefs of the 1980s and 90s.

Stephen Bubb, the chief executive of the Association of Chief Executives of Voluntary Organisations welcomed the Tory proposal to allow groups to retain surpluses made on public contracts.

He said: “It’s great to see plans to develop our role in transforming public services, reducing regulation, strengthening the compact and improving contracting. Recognition that we should be making a profit from contracts is spot on and we look forward to this policy being implemented by Tory local authorities.”

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