The government will invest £60m in helping social ventures struggling to access finance to prepare themselves to receive social investment, the Cabinet Office has announced today.
The funding will come from loan repayments received by government from the former Futurebuilders fund, which made loans and grants of about £150m to voluntary sector organisations to help them take on public service delivery contracts under the Labour government before it was closed to new investment under the coalition.
Social ventures that could benefit from "business capacity building support" – such as short-term legal advice, governance restructuring or financial analysis – would be targeted as part of the new initiative, the Cabinet Office said.
The programme will be modelled on the Cabinet Office’s pilot £10m Investment and Contract Readiness Fund, which was launched in 2011 and operated for three years. The government said that social ventures that received finance from the fund received £38 for every £1 of government grant.
Two new social impact bonds have also been launched, in Worcestershire and Birmingham, for which the Cabinet Office has made up to £1.25m available for payments linked to successful outcomes.
They bring the total number of operational or funded SIBs in the country to 17. A further 15 SIBs are in development in the UK, and 11 more are under consideration, according to the Centre for Social Impact Bonds, part of the Cabinet Office.
The Worcestershire SIB has been established to reduce isolation in the area, helping people aged over 50 to minimise their dependency on health and social care services. The Birmingham SIB is designed to support vulnerable young people aged between 11 and 15 living in residential care or at risk of entering care.
The government has also published a report, Growing the Social Investment Market: a vision and strategy, setting out the progress it has made in growing the social investment market.
Nick Hurd, the Minister for Civil Society, said in a statement: "Engagement in social investment around the world has reached new levels, and the UK is leading the way in this global movement. Today’s announcements show our commitment to building a market that is accessible to everyone, and our report reflects on the huge progress we have made on turning our vision into reality."
The government’s Social Impact Investment Taskforce, led by Sir Ronald Cohen, meets today and plans to publish recommendations on growing the global market later this year.