The UK Government has released their strategy for how they will continue to support and encourage the social investment sector in the UK.
The strategy, Social investment: a force for social change, reports on the Government’s progress to date, details current trends in the market and outlines initiatives to grow the market in 2016/17, focusing on three key objectives:
- Using social investment to transform public services
- Growing the social economy
- Strengthening the social investment market place
Each objective includes numerous key initiatives and details of how the Government will measure their success (see below).
Objective 1: Using social investment to transform public services
Underpinning this objective is making it easier for public sector commissioners to buy socially, accelerating the growth of the Social Impact Bond market and supporting the use of new and innovative financing models. To achieve this objective, the Government will:
- Partner with a leading UK university to establish a centre of research and technical excellence on outcomes based commissioning
- Establish a $80 million Life Chances Fund to catalyse the take-up of Social Impact Bonds (SIBs)
- Contribute an additional $25 million to supporting SIBs focused on tackling homelessness, mental health and employment
- Support the growth of innovative investment models
To measure their success in delivering on this objective and corresponding initiatives, the Government will measure the overall number of people being supported with the help of social investment backed Government programs, the amount of social investment being made into public services and the number of central and local Government organisations that are actively using social investment models.
Objective 2: Growing the social economy
The Government will grow the social economy by better understanding how it works, reducing the barriers to being a social investor and ensuring the UK remains a global leader in social investment. Achieving this objective will involve:
- Investigating how the regulatory framework could be disadvantaging socially motivated investors with the long-term aim of the UK becoming the international standard-setters in developing and implementing a simple and consistent regulatory landscape for social investments
- Making it easier for institutional investors to enter the market
- Making it easier for trusts and foundations to engage in social investment through a statutory power of social investment for charity trustees
- Commissioning research to better understand the potential for mass participation in social investment and savings
- Maintaining their position as global leader
Their success in meeting this objective and these initiatives will be measured by the overall number of social sector organisations in the UK economy, the value of institutional and retail investment invested for social impact, the number of enterprises and individual investors that benefit from Social Investment Tax Relief and the number of foreign investments into, and overseas ventures entering, the UK social economy, and the number of successful exports of their social economy.
Objective 3: Strengthening the social investment market
This objective focused on ensuring the social investment is working effectively to frontline social sector organisations by improving existing market infrastructure and creating new infrastructure where necessary. Delivering on this objective will include:
- Reviewing and ensuring market infrastructure works for social sector organisations
- Actively intervening to strengthen the market including developing a digital offer that makes it easier for social sector organisations to understand repayable finance, assess the benefits of social investment and find opportunities that suit their needs
Success for this objective will be measured against the number and value of direct investments made into and contracts won by social sector organisations and the sustainability and growth of organisations that provide intermediary support to social sector organisations.