Blog written by Toby Eccles of Social Finance.

Today is a big day for those that care about producing outcomes and making an impact. New Economy, in partnership with HM Government, is publishing unit cost data for a whole variety of costs within government, in one place, for the first time. For the 1% of you that have just leapt in the air shouting yippee, you don’t need to read further. For the 99% who gave a slightly questioning grunt of “so what?” or even “you what?” here are ten reasons why you ought to be just a teeny bit more excited.

    General Value

  1. Enables change: Ever shot at a target you can’t see? It can be quite irritating. Unit cost data are the building blocks for understanding the economic consequences for government of negative outcomes. Thus for anybody pitching an idea to government they are a vital part of building the case for change. While most if not all of these have been in the public domain somewhere before, now, instead of scrabbling about checking various sources, people can simply go to one place and look it up. And you know that government stands behind the numbers. Marvelous.
  2. Encourages effective measurement: In a world of no data, the anecdote rules. For many of us it is a tragedy that the most effective way of selling in the social world is still through telling harrowing stories about poor little children and their terrible lives. Stories are an important element of bringing work to life, but they have to be backed up with numbers and analysis. Unit cost data push more effective measurement and analysis into the core of the discussion. Even if one organisation doesn’t use them, another will, changing the nature of the discussion.
  3. Incentive to act: finding out the true cost of negative outcomes provides an incentive to public, private and voluntary agencies to build programmes that drive costs down and improve outcomes.
  4. Encourages joint commissioning: Most services are commissioned by one commissioner focused on specific issues. Unit cost data starts to show the potential for commissioners working together. For example, if a provider of intensive family therapy is commissioned by children’s services, and is finding from staff that the impact is wider, on substance misuse, or employment, then the unit cost data starts to give them a route into exploring the benefit they are providing to other commissioners. At the very least, it points out the benefit of collecting data on multiple outcomes, with a view to protecting the service in the future with alternative revenue streams.
  5. International precedent: Generally government unit cost data is hard to come by all over the world. This is a fantastic precedent for other countries to follow and can be used by social organisations and think tanks to lobby them to do so.

    Social Impact Bonds

    Social Impact Bonds (SIBs) are a way of enabling innovation, creating flexible contracts around social outcomes and providing linked investment. An issue in their development is that most interventions have a variety of social outcomes affecting different parts of government. The Cabinet Office Social Outcomes Fund and the Big Lottery Commissioning Better Outcomes Fund are designed to help with this problem by providing a top up payment to represent the value to these wider parts of government outside of the direct service commissioner. This unit cost data is really helpful for the development of SIBs and the use of these top-up funds:

  6. Encourages verification and transparency: If you disagree with a number, or if you think a number ought to be available, you can bring it up! This database is a start, and provides an important route to check and challenge government costs and data.
  7. Providing a source for secondary impact information: While most commissioners know their own costs they generally don’t know the costs faced by wider government. So figuring out the value to the rest of government and the potential for a top-up is tricky. Looking through different public sources is frustrating, it never gives you the number you were looking for, and the numbers you do find are inconsistent. The ability to just look up costs makes it much easier to apply to these funds and understand the potential benefit of an intervention.
  8. Reduces the cost and time of assessing potential SIBs: At the moment, far more time is spent trying to find and verify them than is in building the models to develop them. So unit costs will make it easier and cheaper to assess the value of a Social Impact Bond.
  9. Ensures consistent assessment: With all the applicants to the funds using the same unit cost data it becomes easier to understand the different applications and compare the impact and numbers they are using. Assessment becomes quicker and cleaner.
  10. Makes it easier for commissioners to try SIBs: All this makes it easier for commissioners to try using SIBs as a tool for reshaping services, increasing impact and reducing cost.
Date posted: 18/02/2014 | Author: | No Comments »

Categories: Uncategorized

Blog written by Daniel Shamplin Hall and re-blogged from Local Government Association (LGA).

I recently changed posts at the LGA and now, as part of my new role in the Finance and Policy team, will be working with the not-for-profit organisation Social Finance on Social Impact Bonds (SIBs). Social Finance and the LGA have been contracted by the Big Lottery Fund to provide support for commissioners and the wider community to develop SIBs as part of their Commissioning Better Outcomes fund.

Local government has always been a leader in finding new and better ways of delivering services to improve lives and save public money. Our members are keen to look at how Social Impact Bonds can be used to tackle issues of concern to residents, such as truancy, criminal reoffending and antisocial behaviour.

Earlier this month, as part of the LGA-Social Finance joint support programme, I attended the first in a series of joint workshops on SIBs. These provide an opportunity for councils (and other organisations) to learn about SIBs and how they can be used in a local authority setting.

Workshop dates

Wednesday 22 January 2014, Birmingham
Monday 3 February 2014, Cambridge
Wednesday 12 February 2014, Nottingham
Tuesday 4 March 2014, Leeds
Thursday 20 March 2014, Manchester

For me, this was a fantastic first opportunity to hear directly from councils about what issues they hoped a Social Impact Bond could help them tackle.

Below is a summary of the key points from the event. I also thought it would be useful to list some links to key resources and provide some contact details. Above, sign up to one of remaining set of workshops

Here is a brief summary of the key points:

What is a Social Impact Bond?

  • A Social Impact Bond or “SIB” is a contract with a public sector commissioner, (like a local authority), in which it commits to pay for improved social outcomes.
  • On the basis of this contract, investment is raised from socially motivated investors.
  • This investment is used to pay for a range of interventions to improve social outcomes.
  • If social outcomes improve to an agreed level or measurement, investors will receive payments from the commissioner.
  • These payments repay the initial investment plus an agreed financial return.
  • The financial return is dependent on the degree to which outcomes improve. If no social impact is achieved, investors lose their money.

Case Study – the Essex County Council Social Impact Bond

  • The Essex ‘children on the edge of care’  SIB was the first local government SIB in the UK. Social Finance raised £3 million from social investors to fund work with adolescents on the edge of care in Essex.
  • It focuses on 11-16 year-olds at the edge of care or custody in Essex, with the objective of providing support in order that the young people can safely remain at home with their families, with the aim of substantial improvements in their lives.
  • Funders of the programme costs make a financial return on their investment if it is successful, with the size of return dependent on the level of success, but could lose their entire investment if it isn’t.

Find out more about the Essex SIB here

Support for Commissioners

There is a range of support and funding for potential commissioners to access:

  • The Cabinet Office launched its ‘Social Outcomes Fund’ of £20m last November as a means of dealing with the difficulty of aggregating benefits and savings which accrue across multiple public sector spending silos.
  • Over the summer, the Big Lottery Fund launched its ‘Commissioning Better Outcomes’ fund of £40m with the aim of growing the market in social impact bonds and other outcomes based investment instruments. Its aim is for organisations, and particularly VCSE organisations, to access new forms of financing to be able to reach more people (particularly those most in need), so they can lead fulfilling lives, in enriching places, as part of successful communities in England.
  • Applicants, who will use a single application and entry point to access both funds, will be public service commissioners (such as local authorities). They will be able to use the funding to top up payments to a delivery partner or via a social investment intermediary for providing certain services and delivering pre-agreed outcomes.
  • As well as our workshop offer, Social Finance and LGA are also offering a range of support, including technical guides, online tools, webinars, podcasts, workshops and one-to-one surgeries.
  • These tools will hopefully play a big part in supporting a commissioner’s proposal that could then go on to access technical development grants from Commissioning Better Outcomes, leading to a possible contribution to outcomes payments from either or both of the outcomes funds.


On the day, I was glad to see the wide spectrum of councils and other organisations represented. These included districts, counties and London boroughs as well as think tanks, and health and private sector organisations.

At the event, attendees were asked to write down possible social issue areas that they would like to explore using a SIB for, and group them together. There were a variety of issues that candidates thought had the potential to be tackled. One, for instance, sought to explore alternatives to residential care for adults with learning difficulties. Another wanted to focus on early years 0-5s NEET prevention in troubled families.

The next step was for attendees to choose a social issue to focus on and plan a hypothetical SIB development process in order to fill in an initial expression of interest form. This involved identifying a target population, the intervention to be used, and a possible outcome metric that used to measure success. In tables, attendees then role-played developing a SIB within a local authority, through negotiation with the key stakeholders.

Feedback at the end was positive, with attendees appreciating the focus on real life examples, including hearing about the case study from Essex, and having the opportunity to talk with other authorities about their ideas.

I would encourage all those with an interest in Social Impact Bonds, whatever stage you are at, to attend one of these free events. We are also offering surgery sessions at the end of each workshop. Each 1:1 session will last 15 minutes and will be an opportunity for you to receive expert advice on your specific query.

I look forward to seeing you soon!
Key Resources

Full guidance, Q&A and Expression of Interest application form – Big Lottery Fund and Cabinet Office

Social Finance website

Template PbR contract and guidance, and SIB Knowledge Box – Cabinet Office

Key Contacts

Social Finance

Tom Symons, Associate:

Local Government Association

Philip Mind, Senior Advisor:

Daniel Shamplin-Hall, Advisor:

Date posted: 09/12/2013 | Author: | No Comments »

Categories: Uncategorized

On Wednesday 20 November HRH The Prince of Wales hosted a reception for supporters of social impact bonds at Clarence House. The reception was attended by over one hundred representatives from the social, private and public sectors who have been instrumental in driving the development of SIBs and other forms of social impact investment in the UK. The reception was an opportunity for HRH The Prince of Wales and the sector as a whole to acknowledge the contribution of those who have made the UK a global leader in social impact bonds, as well as to look forward to continued innovation in the field.

Date posted: 25/11/2013 | Author: | No Comments »

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This is a guest post by Indie Shergill, an intern at the Cabinet Office, 2013 Year Here Fellow, and Co-Founder of Rootless Garden.

Seven months ago I had very little idea what “social enterprise” meant. Fast forward to today, and I have been through Year Here, a six-month social innovation accelerator programme, am working at the Cabinet Office with the Social Investment and Finance Team, and am running my own social enterprise. I now believe that involvement in the world of social innovation, enterprise, and investment is an important shift in the way we tackle some of society’s most entrenched problems.

I want to give an insight into the past six-months and how they have helped me start my own social enterprise, Rootless Garden, and hopefully share some advice for others.

Rootless Garden is a service that reconnects care home residents with nature by bringing the outdoors indoors. We create pop-up gardens to provide stimulating, and immersive experiences for those who do not have easy access to the outdoors. We are particularly interested in bringing the benefits of nature to those suffering from dementia and living in care and in promoting intergenerational exchange through meaningful community events that connect younger people and older people.

Richard Frost, a resident at one of the care homes where Rootless Garden has been working

Richard Frost, a resident at one of the care homes where Rootless Garden has been working

This isn’t a shameless plug for my enterprise, but a view into process my team took to create our service. Unlike most, however, we had access to Year Here, a graduate fellowship that aims to create a generation of social leaders by pairing work experiences with frontline and social sector organisations with entrepreneurship training. The fellowship culminated by challenging the 12 fellows to design a social enterprise and compete for funding. I worked with Louise Ellaway and Nadia Daghistani for Care UK, who challenged us to design an innovative service for care home residents. My team were fortunate enough to win the competition, and we have secured seed funding from UnLtd, press coverage from Nesta, and business support from Emerge Venture Lab. Since August we have been working independently to get our start-up off the ground.

Identifying a need

Having a great idea is useless if there is no need or desire for your innovation. For this reason it is vital to get to know your audience, and learn about their experiences to ascertain where the latent needs lie. I say latent, because frontline organisations do an incredible job to meet the requirements of their beneficiaries, but my experience has taught me that the space for innovation is often untapped. You can only come to realise this by getting to know the environment and people you are hoping help, and the space in which you are trying to innovate.

I was extremely lucky, as Year Here provided us with the opportunity to spend four months working in frontline elderly services, with Care UK homes and Age Concern Kingston. Having incredibly supportive hosts allowed us to really get to know how elderly services are delivered and used. Most importantly it allowed us to learn from experiences of both older people and care staff by spending time with them, talking, and observing. Without this immersion in frontline care I don’t think I would ever have had the foresight and depth of knowledge to set up a service aimed at the elderly.

My business partner, Louise Ellaway put it perfectly in a blog post of her own:

“Make the migration. Don’t just make it once: jog yourself to keep making it, day in, day out. Occupy their experience, and see them as whole…. Try to know what it feels like; know what it would feel like; know that it could, and may one day, be you.”

Designing a concept

Once a need has been established, it is time to create and innovate. There is no prescribed design process for designing a social enterprise – it is a unique journey for every entrepreneur.

I think most entrepreneurs spend a considerable amount of time at the design stage, and use it as an iterative time to perfect a service. My case was different however; as Year Here set us the challenge of creating a service, ready to pitch to investors in just two months.  I think Rootless Garden would have benefitted from more time at this stage, but the time constraint made us act fast and speed through the process. This forced us to be incredibly creative, lean, and focused and adopt the principle of contrast iteration and improvement.

I am usually someone who values process and structure, but at this stage in designing a social enterprise I had to let go. This was something quite new to me, but the more freedom you give yourself, the more creative, innovative and enterprising you become.

Start big, imagine anything is possible. Starting by imposing restrictions limits creativity. It is easier to strip back a seemingly impossible idea, and then turn it into a realistic one. Working backwards by design might seem illogical, but it allowed us to tap into some of our most creative ideas. One of our biggest insights here was that there was a desire for our service to be one that travelled to different communities rather than having an initial fixed space. It is because of this feedback that we now host pop-up events. Keep an eye on our website for upcoming events after the New Year.

Editing your Design

In case you’re feeling a little bit too lost in a world of abstract thought and avant-garde mind matter, there are support organisations that can provide practical advice listed on the Big Society Capital website.

One of the most useful tools that Rootless Garden used was the Business Model Canvas. It allows you to plot your design concepts against the quantifiable aspects of your business idea, including revenue streams and costs. The most useful part of this for me was plotting our value propositions and relationships.It allows you to see if your idea makes sense as a business, and flags the areas that need more work, and those that might not fit.



Researching, understanding and planning is vital, however, there is only so much you can do on paper to test your enterprise idea. The next step is to see if it actually works by prototyping. At Year Here we were lucky enough to have some in house advice on prototyping, as well as some valuable help from Nesta’s Innovation Skills Team and Participle.

Prototyping is a concept that I automatically associate with product design – but it should not go unrecognised in service design. This does not have to be a laborious, expensive or time consuming process, nor does it have to test the entirety of your social enterprise. One of the simplest and quickest ways of prototyping is on paper. Use storyboards to plan how a service might look – you don’t need to have much of an artistic inclination to do this, stick figures usually work best.

The best way to prototype is to test elements of your service. You’re creating a service for a target group, test it on them, and get their feedback and response. Harnessing an iterative process and being receptive to feedback is the only way you’ll get it right. This shouldn’t just be for the initial design of your social enterprise, but kept at the forefront of your project – bend and flex to the needs identified by your target audience.

Actually seeing your idea come to fruition is very exciting, however this stage is also the scariest. Taking your idea from paper, to testing it is a service can throw up a variety of bumps – use these as a part of the process, don’t ignore them. Having people criticise, not understand, or simply not care about your social enterprise is disheartening. However, take all of this on board and use it to shape your improvements – this is why we prototype, to iron out the creases before rolling it out on a full scale.

The next steps

Once you’ve rigorously tested your service, it is time to launch! This is where I am right now; applying for funding, incorporating the business, and delivering my service. This stage needs a whole blog post for itself!

Rootless Garden is taking its first steps into this stage, so we are still finding our feet. Look out for my post next month to read about our progress.

If I was to leave you with one message here, it is: don’t be afraid, if you’ve got an idea for a social enterprise, go for it! There is a whole ecosystem dedicated to growing the presence and effectiveness of social enterprise in the UK, and there are structures in place to support you…all it takes is one idea!

If you’re interested in Rootless Garden, or talking about starting a social enterprise, follow us on twitter @RootlessGarden or contact me at

Are you a social entrepreneur wanting to share your experience or respond to Indie’s story? ContactCabinet Office to share your own story on this blog at 

Date posted: 19/11/2013 | Author: | No Comments »

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As well as driving new collaboration and market initiatives, the G8 Social Impact Investment Forum last week was a useful reminder of how far the concept of social investment has already come. As well as showcasing initiatives from around the world, the event marked two years since the publication of the UK Government’s social investment strategy. In this strategy we set out a vision for a large and sustainable social investment market in the UK, to act as a third pillar of finance for our social sector, supporting social enterprises and their communities.

Alongside the G8 event, we published a 2013 progress update on this strategy. In this update we aim to set out both the actions taken by Government and the wider sector over the past 12-18 months, and some indicators of what’s happening in the market as a result.

Progress since 2012

As set out in our update report, the UK social investment market reached £202m in 2011-12, representing total value growth of up to 25% on the previous year1. This signifies a collective effort from Government and a growing ecosystem of innovative organisations.

In our 2012 progress update, we committed to a set of actions to further enable the social investment market to grow and we have worked hard over the last year to meet all these commitments. Our actions include committing to a Tax Relief for investment in social enterprise (for which the consultation is out now), launching a £10m Social Incubator Fund and setting up the £20m Social Outcomes Fund. We also used the Red Tape Challenge to remove inconsistencies and omissions in the existing regulatory framework that governs social investment.  We hope that this helps to create an environment more conducive to social investment. This action has been matched by a range of new investments, products and services across the wider sector. Big Society Capital led the way, making £56m worth of investment in its first 9 months of operation as well as championing the market through research, tools and guidance. This sat alongside a host of new social finance intermediaries, social investment platforms, products and services.

In the update report, we picked out a few key trends in the UK market, to get an idea of how (and whether) these actions were having an impact. This snapshot suggested a few things. One; the growing value of the market, and its range of new infrastructure shows that the concerted effort of the social investment sector is moving the market in a positive direction. Two, new research on social enterprises also confirms that the market supporting a high- potential sector. Social enterprises support economic growth, contributing £55bn each year to the economy, and employing over 2m people. This sector is also more innovative; last year 55% of social enterprises developed new products and services, compared to 43% of other SMEs.  Three; there is growing demand from all sides of the market, but this demand is not yet fully met.  For example, 68% of High-Net-Worth Individuals in the UK say that they are likely to invest in a product that has a comparable financial and social return, but only 16% can say for certain that they have these sorts of investments. SME enterprises’ applications for social investment have increased – they are now more likely to apply for finance than other SMEs, but social finance intermediaries reported that they were able to meet less than half of request for loans.   28% of social enterprises had worked for the public sector in 2012, and only 13% reported trade with the private sector as their main source of income; they could play a bigger role in both sectors.

In other words, despite huge progress, the full potential of the social investment market is yet to be realised, and there still some barriers remaining. This is not surprising, considering the fact that the market is extremely new. There’s still lots to be done in order for the market to flourish. That’s why Government is continuing its commitment to support it.   

Government’s social investment commitments for the coming year

To support the growth of the market in the coming year, we have set out five goals on which to focus our efforts:

1)      Diversify the investor base, by making it easier for foundations and individuals to invest.
2)      Open up markets, by working with the public and commercial sectors to use more social enterprises as suppliers
3)      Support investment-readiness, by working with the market to create a ‘what works’ evidence base
4)      Maximise the impact on economic growth, by supporting communities to take over local assets 

We hope that these actions, along with those in the wider sector, continue the positive momentum of market growth, and support its end goal – enabling social ventures to support communities in a more effective and sustainable way.

1 Forthcoming research commissioned by the Market Stewardship Research Group, which surveyed social finance intermediaries in the UK. The Boston Consulting Group estimated the size of the market to be £165m in 2010-11, based on a survey of social finance intermediaries in England.

Date posted: 17/06/2013 | Author: | No Comments »

Categories: Blogs


Steve Goldberg, US Independent
Social Investment Adviser

caffeinated capital logo

These are heady days for impact investing, and the Prime Minster’s call for a G8 Social Impact Investment Forum on 6th June promises to be a watershed event.  Three emerging trends herald an auspicious occasion.

First, innovative solutions to seemingly intractable social problems developed in one country are being exported to others, accelerating the prospects for wider adoption.  For example, after some three decades of painstaking testing, refinement and validation in the U.S., Multi-Systemic Therapy and the Nurse-Family Partnership still reach less than 5% of the at-risk children and first-time mothers whose lives they can transform.  In June, 2011, the report of the Early Intervention Review Team led by Graham Allen MP showcased both prevention programs, attracting the support of Big Issue Invest, NESTA, Impetus Trust, Big Society Capital, Social Finance Ltd., the Bridges Social Entrepreneurs Fund, and other impact investing pioneers.  These exemplary “evidence-based practices” could well span the UK in less than a decade. 

Similarly, just four months after Essex County Council announced the first Social Impact Bond to improve outcomes for vulnerable young people on the edge of care, the Treasurer of New South Wales signed Australia’s first Social Benefit Bond to help children already placed in care to return safely to their families.  And City Year, born in Boston (Massachusetts, not Lincolnshire) in 1988, and now deploying 2,500 full-time volunteers to enhance educational attainment in 238 U.S. schools, arrived in Birmingham (England, not Alabama) in 2010 with a big boost from Credit Suisse and a Big Society Award from No. 10.

Second, innovative financial instruments and structures are cross-pollenating internationally.  What began as microcredit in Bangladesh in the 1970s has become a flourishing “financial inclusion” industry offering savings, insurance and fund transfers to more than 130 million of the world’s poorest people.  Three decades later, it’s easy to lose count of the number of countries embracing the UK’s Social Impact Bond model (welcome aboard, Social Finance Israel) to make public service delivery both more effective and less costly.  President Obama has proposed a SIB incentive fund in the Treasury Department modeled after the Cabinet Office’s Social Outcomes Fund, while Impetus has studied the White House’s Social Innovation Fund as a guide for “scaling what works.”  Not long after the Omidyar Network brought its market-based, “philanthropic investment” approach to London, the respected specialist fund manager Bridges Ventures, which recently announced the first SIB Fund, is standing up a US operation.  

Third, an international impact investing marketplace is organizing to attract, deploy and manage billions of pounds, well beyond what any country could do alone.  Led by Minister for Civil Society Nick Hurd and the Cabinet Office’s Social Investment Team, and with the collaboration of too many distinguished non-governmental partners to name, the U.K. is developing a “global hub” of intermediaries, advisors, fund managers, analysts, and exchanges with the horsepower to connect the worldwide supply of and demand for social investment capital.  Complementary efforts of the Euclid Network, the European and Asian Venture Philanthropy Associations, the Nexii capital marketplace in South Africa, the Canadian Task Force on Social Finance, Bertelsmann Stiftung’s work in Germany with New Philanthropy Capital, and the New South Wales Treasury’s work on Social Benefit Bonds are all keen to be joined up on a global platform.

These coordinated developments in social innovation, impact investment and collaborative market institutions reinforce longstanding efforts by Sir Ronald Cohen, Michael Porter and many others to reinvigorate capitalism itself.  This is a timely conversation worthy of the G8’s consideration.

Date posted: 03/06/2013 | Author: | No Comments »

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The UK is blessed with thousands of innovative and dynamic entrepreneurs using profit for social good. The entrepreneurs belonging to the Nexters programme are typical examples. The Social Investment and Finance Team invited a group of Nexters to come and speak about their businesses and explore how Government can help them to maximise their social impact.

Cabinet Office’s Social Investment and Finance Teamrecently hosted a group of social entrepreneurs from Nexters. Backed by foundations, philanthropists, businesses and social investors, Nexters is a programme which provides support for entrepreneurs building scalable and high social impact businesses.

The session represented a fantastic opportunity for the team and officials from across Whitehall to engage with entrepreneurs delivering social change on the ground. As policymakers we need to understand the challenges our stakeholders face and think about devising policy interventions that help them overcome these obstacles. It is also important that people working on the front line are given the opportunity to influence policy and see how government works.

Tech for Good

The current Nexters cohort is running technology-based businesses. Technology, in general, is underutilised as a driver of social change, but the tech community is becoming increasingly interested in using its skills to do good. The turnout at the “Tech for Good” conference Cabinet Office ran alongside Nesta was bigger than any other conference Nesta has staged.

Two key areas where technology can deliver significant social change is education and health, and four of the Nexters who presented to us are delivering social change in these spheres. Ed Baker’s Educational Games Network is aiming to raise literacy rates, Diane Shawe’s Express Training Course uses an online Learning Management System to provide soft skills vocational training and Stephen Taylor’s is an employability network. In the health sector, Alison Baum’s Best Beginnings is aiming to improve the health and well-being of babies in the UK through products like the mobile phone apps “Bump Buddy” and “Baby Buddy”.

Lee Hazard and Rajeeb Day’s enterprises, Fused Education and Enternships, are focussed on inclusion. Fused Education provides online money management courses to prisoners, while Enternships is reducing youth unemployment by connecting young people to internships and jobs within the start-ups and SME’s. Lastly, we heard from Simon Gordon, whose company, Facewatch, is an online reporting platform for low level crime.

Challenges and Opportunities

Life as an entrepreneur delivering social change is not straightforward. The Nexters spoke of struggling to infiltrate the labyrinth of Government and of the procurement process excluding small businesses like theirs. Many were finding it challenging to attract investment, and the shortage of programming skills in the UK is making it difficult for them to find suitably qualified Chief Technology Officers.

Nevertheless, more and more people are attracted to the idea of using profit for social good. There are over 64,000 social enterprises in the UK contributing around £24bn to the economy. Programmes like Nexters provide social entrepreneurs with holistic support and access to new networks, but Government is committed to supporting them as well. Through the Social Investment and Finance Team’s work, Cabinet Office is increasing the level of capital flowing into the social investment market, creating an enabling environment for investment to occur and growing demand for social investment by helping to create a pipeline of investible opportunities.

The Nexters we met are typical of the thousands of entrepreneurs making the social investment market one of the most exciting and dynamic parts of the UK economy. Enormous thanks to them for providing such an interesting and inspiring session.  

Date posted: 08/04/2013 | Author: | No Comments »

Categories: Uncategorized

The social investment market has witnessed dramatic growth in the past few years.  In any space that experiences such rapid expansion, the opportunity to gather industry leaders and have deep discussions about successes and failures, goals and fears, lessons learned and mistakes made is absolutely vital to its future success.  It is similarly vital, or even perhaps of greater importance, that these learnings are distributed beyond the walls of conference rooms to facilitate industrywide conversations.

We are pleased to present a report titled “The Social Investment Market: The role of public policy in Innovation and Execution”. This report, arising from a symposium co-hosted by the University of Oxford and the Cabinet Office in November 2012, captures the reflections of senior policy-makers, investors, advisors, academics and analysts from over ten countries as they discuss the historic and future role of public policy in the social investment market.

During the symposium, the increasing sophistication and scale of the UK social investment market was evidenced, as well as the fact that the innovations in funding intermediaries, legal structures, financial products, tax incentives and government commissioning and procurement act as examples to governments and private entities worldwide.  Sir Ronald Cohen noted that “The Social Investment Symposium was a landmark in the progress of this new, vitally important market. It has set the scene for greater international collaboration…”.  We look forward to global collaboration and welcome comments on this report.

This report was written by Aunnie Patton, Dean’s Fellow at Oxford’s Said Business School. You can read more about her work on social investment at

Date posted: 22/02/2013 | Author: | No Comments »

Categories: Blogs

In the last twelve months, significant progress has been made in developing the UK social investment market. We have seen the launch of the first social investment institution of its kind in the world in Big Society Capital; the development of pioneering social impact and charity bonds, supported by infrastructures such as the Social Outcomes Fund; and the emergence of new investors from across the financial and philanthropic world. This momentum firmly establishes the UK as a leader in driving this social innovation. In turn, this creates commercial opportunities to establish the City of London as the global hub for social investment.

The Cabinet Office Social Investment and Finance team sits at the heart of these developments. We support the UK social investment market to grow by:

  • Increasing the supplyof capital into the market – for example, through developing the potential for retail investment, and promoting London as a global hub for social investment
  • Growing the demand for capital – for example, through increasing the capacity and capability of social enterprises to take on investment, as well as supporting the development of SIBs through our specialist Centre for Social Impact Bonds
  • Creating an enabling environment for investment to occur – for example, through tackling the regulatory barriers to social investment in the UK and exploring new legal forms of investment structures to catalyse the market

In partnership with the Impact Investing Policy Collaborative, we currently have a potential internship opportunity available for an exceptional candidate looking to influence the global debate on social impact investing.

The CO Social Investment Fellowship is a 3 to 6 month position. We are open to applications of interest on proposals that will develop the UK social investment market in line with our mission, and will look particularly favourably at proposals on:

  • Policy development around articulating the UK’s offer as an ‘innovation lab’ for international Philanthropic and Charitable Foundations looking to develop their understanding of the potential of social impact investing
  • Research around the barriers to, and opportunities of, more active social impact investing from large institutional asset holders, notably UK pension funds

If you are interested in finding out more about this internship opportunity, or wish to submit a 500-word proposal on a research or policy development initiative, please e-mail with the subject title “CO Social Investment Fellowship” by Feb 25, 2013.

Date posted: 12/02/2013 | Author: | No Comments »

Categories: Blogs


Demand for social investment is clearly on the rise. If the forecast by Boston Consulting Group is anything to go by, it could reach £1bn by 2016. There’s a significant amount of activity taking place to develop investment models, spurred on by things like the Investment and Contract Readiness Fund and the recently announced Social Outcomes Fund. But all this activity will be severely restricted if the growing demand for capital can’t be matched with growth in its supply.

The encouraging news is that there are signs that more investors are looking for social investment opportunities. One positive result of the banking crisis is that it seems to have prompted many individual investors to think about the social impact of their investment and not just the financial return. Equally, with refreshed guidance from the Charity Commission in CC14 there is growing interest amongst charities and foundations in using their investment funds to deliver their objects.

There are however some challenges to overcome:
• Many social investments – including those made into social impact bonds (SIBs) to date – have had to be by private placement rather than public offers. Consequently there are limited opportunities for retail investors to participate.

• Much social investment is innovative and high risk, possibly involving total loss of investment – this is particularly true of SIBs

• There is often little opportunity for exit should investors require funds before the end of the programme.

To try to address these barriers, Allia was awarded a grant last year by Big Lottery Fund to develop a ‘capital plus’ bond – a genuine bond to invest in high risk ventures like SIBs, offering repayment of capital with the potential for an additional variable return according to the success of the venture. The result is today’s launch of the Future for Children Bond, which will invest into the Essex County Council SIB, developed by Social Finance, to support children at risk of entering care.

Allia’s Bond will work by lending 78% of the funds subscribed at a fixed rate to Places for People Homes (PfPH), a Moody’s Aa rated provider of affordable housing. The repayment of this loan plus compound interest at the end of the bond will equal 100%, thereby providing the funds with which to repay bondholders the principal amount invested.

After Allia’s costs, the remaining 20% will be committed to investments in the Essex SIB. Whatever payments are received from the SIB will be rolled up and paid on maturity as the variable return to bondholders.

The Bond has a minimum investment amount of £15,000, is transferable and can be offered to the public based on the exemptions Allia benefits from as an Industrial and Provident Society.

Being the first time an investment into a SIB has been offered to the public, this is entirely new territory. Allia has therefore asked NPC to capture what we’ve learned so far in developing the offer and to listen to the views of investors and financial advisors on this product. We look forward to sharing the results with you after the bonds are issued in a few months’ time.

Date posted: 04/02/2013 | Author: | No Comments »

Categories: Blogs