Despite cross-party support for growing the social investment market, some say the political capital invested is yet to yield significant returns.
This year's Budget set the rate of social investment tax relief for individuals at 30 per cent. At April's Charity Tax Group annual conference there was agreement that the scheme might be of no benefit to a large majority of charities, with one attendee suggesting it was so marginal an issue it did not even merit the conference's attention.
Also in April, the Law Commission began consulting on a suggested new power for charity trustees to make social investments themselves. Although the commission is independent of government, it is believed that it fast-tracked this relatively niche project in response to governmental enthusiasm. Sarah Woodfield, a policy officer at the Charity Finance Group, said at the time that the issue was relevant to "only a small segment of our sector".
That same week, Nick Clegg announced £31m of funding for two new social impact bonds, and the next week the government said the SIB model used in a pilot project for inmates leaving Peterborough prison had been abandoned.
Nick Hurd, the Minister for Civil Society, insists the Peterborough SIB "hasn't stopped". He says that "reforms to the probation service have changed the context in which it operates", and points to the pilot's "promising results". But Hurd, who does not miss an opportunity to tell audiences that Britain is the world leader in this field, recognises concerns in the sector that social investment is currently of limited interest. "We want to build a market that is accessible to everyone," he says. "Over the past five years, we have seen vision turn to reality. The aim in the next five is to turn reality to mainstream."
Chi Onwurah (right), Labour's shadow Cabinet Office minister is also a social
investment fan, and recognises the need to broaden the market. She says social investment "has the potential to be a game-changer, in the right context with other measures to support the social sector". Whereas Hurd sees other countries looking at the UK, Onwurah says Labour is looking at France, Quebec and Italy to inform the social finance aspect of its policy review.
Her word "potential" is key; social investment is not the finished article, as the
Conservatives, Labour and others in the sector agree. Geoff Burnand (right), the chief executive of the social lender Investing for Good, says payment by results-related investments such as SIBs are "largely incomprehensible to mainstream investors". He believes that the market needs simplicity if it is to develop. "Social loans, or simple bonds, which have a yield and a maturity, appeal to many investors and are the best way forward," he says.
Richard Butler, a senior investment manager at the Charities Aid Foundation, says care must be taken over the market's progress. "We want the sector not to become too commercial and to retain its philanthropic roots," he says. Either way, the broader effect of the market is positive, he says: "What we need in this sector is a bit more innovation, and what is fantastic is that people are thinking more creatively about how to get capital into the sector."