This Social Investment Insights paper focuses on how social investment can be used to tackle long-term unemployment for people aged 25 and over.
Unemployment carries significant costs for individuals, society and the government. For the purposes of this paper we have focused on how social investors can support social sector organisations tackling the issue of long term unemployment which we have defined as people who have not been in work for the last twelve months or more and are aged 25 or over. Beneficiary groups covered include: disabled people; the elderly; the financially excluded; people with addiction issues or mental health needs; homeless people; and ex-offenders.
There are multiple government funding streams to provide employment support, including the coalition government’s flagship employment service the Work Programme (a scheme designed to help the longterm unemployed and disadvantaged to find work and leave benefits) and Work Choice (a specialist voluntary programme providing pre-employment and in-work support for disabled people who want to work 16 hours or more).
The three main business models being used by social sector organisations (SSOs) in this sector involve either:
1. increasing reach or access to existing jobs;
2. providing employability support; or
3. supporting self-employment.
Each of these business models face specific challenges when it comes to accessing social investment. However, there are also broader ‘systemic’ challenges for SSOs including for example for many SSOs who work with beneficiary groups with multiple needs.
Whilst the existing social investment landscape already caters to the various capital needs of these SSOs, through investment funds like Big Issue Invest, CAF Venturesome, Key Fund and Impact Ventures UK, we have identified additional opportunities for social investors. These include: supporting social sector bids in the re-tendering of large Department for Work and Pensions (DWP) contracts such as Work Programme 2 and Work Choice 2; bridging funding silos to support holistic commissioning; and supporting mutualisation and joint ventures.