We want to unlock the greatest impact, by helping to create a supportive policy environment in which social impact investment can help improve the way public services are delivered and tackle significant social issues. We do this by working with and influencing government at every level.
Social impact investment can often achieve the greatest impact when it is working alongside mission-aligned government bodies. We want to see a positive policy environment that helps social impact investment to thrive. Often that is just about levelling the playing field. For example, tax breaks are available for some private investments but are harder to secure for investments with a public benefit.
There are three elements to how we approach working with government:
- Firstly, we work together to create policies that support the overall social impact investment market. For example, we made the case for and helped design Social Investment Tax Relief, and contributed to the design and development of the Impact Investing Institute that was launched in November 2019. We worked with other social lenders and the Department for Digital, Culture, Media & Sport to set up the Resilience & Recovery Loan Fund (RRLF), to make the existing government scheme (the Coronavirus Business Interruption Loan Scheme) more easily accessible to social enterprises and charities.
- Secondly, we build partnerships around particular policy issues where social impact investment can make a positive difference, such as working with local and national government to improve the way public services are delivered, for example using social outcomes contracts for supporting at-risk children and people vulnerable to homelessness.
- Thirdly, we invest alongside public bodies in specific social impact investment funds that help them meet their policy objectives in new ways, such as in the arts and sports sectors.
Impact and learning
We understand our impact in this area according to these three elements:
Government support for the social impact investment market overall
As part of our efforts to ensure CBILS was more easily accessible to social enterprises and charities, Big Society Capital made an initial £25 million investment in the Recovery & Resilience Loan Fund, which was enabled by the accelerated release of £45 million of previously committed dormant accounts by the Department for Digital, Culture, Media & Sport. The £25 million was part of a wider package of support by Big Society Capital which includes changes to £29 million of the Community Investment Enterprise Facility. To date, the RRLF has approved funding to 40 social enterprises and charities, with a total value of over £15 million [by the end of November 2020].
In addition, Social Investment Tax Relief (SITR) has enabled 88 deals totalling £14.5 million since it was launched in April 2014 and was selected as the 4th best tax relief in Europe according to a report by PwC. For example, the first-ever SITR investment in 2014 unlocked investment into FareShare South West which has delivered over half a million meals to vulnerable people since lockdown.
Partnerships around particular policy issues
Social outcomes contracts have made a measurable, positive difference to the delivery of public services, maximising outcomes for people using these services, such as for at-risk children and young people and people vulnerable to homelessness. We estimate that more than 27,000 people have benefitted from our investments in social outcome contracts. Bridges Fund Management, our largest social outcomes contracts fund manager, has committed £32 million across a range of projects. These projects have achieved £50 million in outcomes payments from central and local government commissioners to date, with an estimated £85 million in current or potential cost savings.
In addition we are working with social property fund managers to support central and local government's Everyone In initiative, to provide charities and social enterprises with access to more longer-term housing for people who are experiencing homelessness and affected by the pandemic lockdown.
Measurable co-investment from public bodies
As of Q2 2020, we have invested alongside over £100 million from government bodies. For example, investing alongside Bristol City Council in City Funds, which is designed to strengthen organisations aiming to solve some of the biggest problems facing Bristol. Talking Money, for example, has taken on City Funds investment for their specialist advice, help and mentoring services for individuals and families in financial trouble, with many clients coming from the most disadvantaged parts of Bristol.