Policy

Social investment

Issue

Social ventures such as charities, social enterprises and community groups help improve the lives of people, finding long-term solutions for difficult social problems. Like all organisations they need finance to grow. They often find it harder to access this finance than commercial ventures.

The government is seeking to make it easier for them to access finance through social investment – finance provided by people and institutions that are willing to invest for both financial returns and social impact.

Social investment makes an economic difference by employing 2 million people and contributing £55 billion to the economy. It also makes a social impact by helping social ventures expand the work they do. Read a quick overview to social investment and examples of social investment in action.

Actions

We are expanding the social investment market by:

Some of our current activities include:

  • increasing the amount of money available for social investment through the world’s first social investment tax relief
  • piloting new social investment approaches to complex social problems – for example, using a £30 million social impact bond fund to improve employment prospects for young people
  • creating a new £100 million foundation called Access, which will help more social ventures take on social investment

Watch an overview of the social investment market and how the government supports it:

Social investment: an overview

Background

In 2011 we set out our plan to grow the social investment market. Since then we:

Growing the social investment market: 2014 progress update was published in June 2014 to report on the government’s progress.

Bills and legislation

The Public Services (Social Value) Act introduces new requirements for government commissioners when deciding where to award contracts for public services. Commissioners must now first consider how they can improve the social impact of their public service contracts before they start the procurement process, and consider consulting on the services to be procured. Read Social Value Act: information and resources.

The Finance Act 2014 introduced the social investment tax relief to increase investment into the social sector.

Who we’re working with

The Cabinet Office is working with Big Society Capital and Big Lottery Fund on developing long-term support for social ventures to build capacity and skills.

We work with Social Enterprise UK, a national body for social enterprise, to develop policy that supports the social enterprise sector. In September 2014 we supported Social Saturday, a day to encourage consumers to buy from and invest in social enterprises.

We work with the Social Investment Forum to co-ordinate policy and practical work to improve the way the social investment market works.

We are taking part in the international Social Impact Investment Taskforce, which was announced at the G8 Social Impact Investment Forum.

We are working across central and local government to help increase understanding of social investment. Read a guide to social investment for policy makers.