Futurebuilders consortium wins £100m DoH contract

Other social lenders object to the decision

A Futurebuilders England-led consortium has won the contract to administer the Department of Health's £100m Social Enterprise Investment Fund from June.

The fund will offer grants, loans and equity-like products to social enterprises that deliver health and social care services.

Futurebuilders will work with Partnerships UK, a public-private partnership that helps NHS staff to create social enterprises.

Jonathan Lewis, chief executive of Futurebuilders, the £215m government-backed loan fund, said the decision was "fantastic news. It's an indication of all the work that's gone into Futurebuilders."

"The Department of Health looked at us with a completely fresh pair of eyes and liked what they saw.
"We've now got a £330m fund altogether, and we're not finished yet. We'll look at winning more government contracts.
"The more substantial we are the more good we can do for the sector."

But two other social lenders. Charity Bank and Triodos Bank, said in a statement that the decision to award the fund's management to the Futurebuilders consortium was "questionable at best" and could undermine the long-term health of the social finance market.

"It provides yet more money to a government funder which is relatively new to the social finance market, unaccountable to a financial regulator or to wider stakeholders, and which fails to pay a return to investors - factors which raise important questions about how sustainable it really is.

"Ultimately, short-term funding solutions from Government risk displacing existing sustainable private sector capital. There is an active and growing social finance market in the UK. This includes but is not limited to Triodos Bank and Charity Bank.

"Together, we welcome new competitors to the market. But if their contribution is to genuinely improve opportunities for the sector, it is important that the contribution of Futurebuilders and SEIF addresses market failure where risk pricing cannot yet be determined with confidence.

"Both organisations, and the Department in setting its risk expectations, should be very clear about their position in the market to potential recipients of funding, so their activity does not displace established and effective players that already serve the sector well."

James Stewart, chief executive of Partnerships UK said: "Social enterprises already make a huge contribution to the delivery of public services. This contribution is only going to increase in the future. Partnerships UK is delighted to be working alongside the Department of Health and Futurebuilders England to help social enterprises realise their full potential in delivering health and social care services".

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