Small policy changes that would make a huge difference
Big Society Capital, the UK's leading social impact investor whose focus is on growing the amount of money invested in tackling social issues and inequalities in the UK, welcomes the comments the Shadow Chancellor, Rachel Reeves made at the Labour Business Conference on Financing Growth including helping to address the social and economic challenges that families and communities face every day of the year.
Stephen Muers CEO commenting on the Shadow Chancellor’s speech said:
“We welcome the actions that Labour is taking to deliver on its key pillar to deliver inclusive growth, to address regional inequalities and to help all of the UK thrive. Today I am calling on Labour to increase their emphasis on social impact investment. We and our partners have demonstrated there are ways of doing this which will not hit the Treasury for more money but provide innovative place-based impact investing models to crowd in more private finance to fund development of cities and regions.
“We encourage Labour to go further, and faster, and be bolder to unlock the potential of this proven model to put private capital to work. We share their aim to get finance into communities most in need, and there are already brilliant structures in place to achieve this. At Big Society Capital, we understand how to unlock private money and channel it into public good, via 40+ fund managers supporting thousands of organisations across the UK.”
Every day this “social impact” money helps social enterprises and community organisations to tackle some of the UK’s biggest challenges, from homelessness to helping young people with complex needs to reducing the causes of crime. This includes projects tackling homelessness facing young people in Greater Manchester, providing specialist domestic abuse support in Hull and financing community owned solar farms across England and Wales. And with some relatively simple changes within Labour’s fiscal rules, the social impact sector can do even more.
Firstly, launch a Local Community Growth Fund to bring private investment to local areas – redirecting underused grant programmes to be managed by Big Society Capital for Labour’s National Wealth Fund. This is about allocating existing spend to projects that crowd in more social and private investment, meaning no new public money is needed. Over 5 years, with £300mn from existing streams, this could leverage c.£1.2 billion of private capital for enterprises, and support Labour’s aim to grow businesses as the best route to well paid jobs everywhere.
This could replicate the success of Bristol City Funds, which have committed £8.4m locally; mixing private investment and public grant funding to support initiatives such as programmes providing education and employment for young people in creative industries to organisations tackling food poverty with low-cost meal delivery.
Labour could also undertake simple changes to the existing Community Investment Tax Relief (CITR) to incentivise private investment into deprived areas of the UK. Working in partnership with Government we believe we could deliver £1.5 bn, a tenfold increase for enterprises, charities and community finance initiatives.
Big Society Capital wants to integrate social impact investment across government. It can play a vital role across health, education, housing and care and we believe will be most effective if there is a cross-government strategy with responsibility sitting centrally – in either Cabinet Office or Treasury. Big Society Capital would work with Labour’s Office for Value for Money to ensure that across the missions, impact investment is driving better outcomes, and better value.
In the last decade, Big Society Capital has helped grow the UK social impact investment industry to more than £9.4 billion. There is more capital to be unlocked, to crowd in more private investment and help public money go further to improve lives, spend smarter, and help restore growth to the UK.
Ian Young, PR & Media Officer, Big Society Capital email@example.com
About Big Society Capital
Big Society Capital is the UK’s leading social impact investor. Our mission is to grow the amount of money invested in tackling social issues and inequalities in the UK. We do this by investing our own capital and helping others invest for impact too.
Since 2012, we have helped build a market that has directed more than £9 billion into social purpose organisations tackling issues from homelessness and mental health, to childhood obesity and fuel poverty, a ten-fold increase in ten years.