Civil society minister Nick Hurd wants to end the "hand-to-mouth" funding problems many social enterprises face
The government is considering launching two new funds to support social enterprise in the next year, according to a report published yesterday by the Cabinet Office.
Growing the Social Investment Market: Progress Update says the government is working on a "social incubator fund", which will back organisations that provide "space, finance and support" to start-up social enterprises, and also on an "outcomes finance fund" that will support social ventures delivering large public contracts with long-term goals, particularly through social impact bonds and payment-by-results contracts.
"We are particularly focused on what can be done to better enable collaboration between public sector commissioners when tackling complex social issues and where savings accrue across multiple departments or can only be realised once scale has been achieved," the report says.
The report does not say how much money will be available in the two funds, or when they might be launched.
The government is also working on removing legal, regulatory and financial barriers to investment, including the revision of community investment tax relief, the report said.
Nick Hurd, the Minister for Civil Society, says in the introduction to the document that the government wants more charities to deliver public services, but the sector is held back from doing so by a "hand-to-mouth" funding environment.
"It is a priority for us to open up new sources of funding and make it easier to access affordable, long-term finance," he says. "Our strategy is to accelerate the growth of the social investment market.
"It is an embryonic market, but it is real and we lead the world in developing it. We have the opportunity to create a third pillar of funding for the social sector to sit alongside philanthropy and the state.
"Success will unlock the potential to improve many more lives."
The document also outlines the progress made since the government’s social investment strategy, published last year, which outlined a number of goals for Big Society Capital, social impact bonds, tax breaks and regulation.