Transforming Public Services | Big Society Capital

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Transforming Public Services

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Continuing our series of guest blogs, Chris Wright, Chief Executive of Catch22, looks at how social investment can transform public services.

Much of the buzz around social investment has focused on start-ups and Social Impact Bonds (SIBs). Catch22 knows from first-hand experience how exciting these can be. However, as the social investment market matures so must our approach to it.

As a large social business providing public services we recognise that investment offers many more opportunities to tackle stubborn social problems differently. Big Society Capital’s investment and support is beginning to create a market in which many things seem possible. The challenge now falls to investors and the social sector to make the most of this opportunity.

We believe that the biggest opportunities lie in reform, innovation and enterprise.

Reform: changing the face of public services

We see investment enabling social sector organisations to lead the largest public services. This could include probation, education, health, children’s social care, and welfare to work. Organisations like ours unite communities, businesses, and local charities around a shared vision driven by the user instead of profit. By combining this approach with social investment we can develop bolder, more effective, and more efficient services.

So far, social sector organisations have been largely excluded from leading the biggest outsourced public services. As the NCVO found, this is because the levels of financial risk and working capital requirements are too large. Catch22 acknowledges the need for a strong balance sheet and robust infrastructure. However, charities will never be able to absorb as much financial risk as our private sector competitors. We believe there is a major opportunity for investors to support organisations like ours with capacity building, working capital requirements, and financial guarantees. In doing so they will enable us to turn around the lives of thousands more people. 

Innovation: creating user led services

We are excited by the opportunities social investment creates to deliver the services we know will have an impact. For Catch22, this means early intervention, user-led services and strong, meaningful relationships with service users.  Our work to develop the world’s first gang-related SIB in the West Midlands demonstrates this. By helping at-risk individuals identify for themselves the value of positive change, we will deliver a reduction in violence and generate significant savings in the criminal justice and health systems.

While SIBs provide just one model of how investment can enable delivery organisations to innovate, we also see the potential of other new investment vehicles and delivery models and are keen to experiment with them.  Imagine the possibilities offered by joint ventures with major private sector organisations, corporate commissioned SIBs, and investment in entrepreneurial spin-offs to pilot new services.

Enterprise: building sustainable new solutions

Finally, by partnering with social sector organisations social investors could help grow sustainable social enterprises that add value to their business. These organisations can provide new solutions to old problems while also creating new revenue streams. For Catch22, this has meant creating employment opportunities for disadvantaged and vulnerable groups. Auto22 runs two garages that reinvest profits in to training disadvantaged young people. Launch22 is our affordable and inclusive business incubator. It is making starting a business accessible to young people of all backgrounds.

Social sector organisations have the expertise and networks that can deliver a step change in the impact of social enterprises. By partnering with them investors could create networks of businesses that rethink how we help those most in need. The possibilities that these ‘profit with purpose’ ventures offer are endless – from providing affordable fresh produce to incubating new affordable healthcare technologies.

We are optimistic about the challenges ahead. It is our mission to transform public services and social investment offers just the type of innovation we need to do that.

Last updated | 
29 April 2015