Next Steps in Developing the UK Social Investment Market Helga Edström Office for Civil Society Helga.Edstrom@Cabinetoffice.gov.uk 07795 801624 @EdstromHelga Hello. Thanks for having me! Today I aim to: Assess progress towards creating an environment that allows social investment to flourish Explain what’s happening now to increase both demand and supply of social investment Look to the future at what further opportunities could be available

£32 billion £3 billion 2+ million Products and Services Impact Investments Employees Welcome! Hands up who’s a social investment expert? Hands up who knows a little bit? Anyone brand new to social investment? What is social investment? - Tool to help organisations increase their social impact - Helps many social sector organisations do more - Providing the capital that they need to deliver their services, grow or become more sustainable Why is government interested? - Supporting economic growth - Driving the innovation needed to deliver public services better - Tackling some of the most difficult social challenges that we face Why should you be interested? - This itself is part of a wider trend - £billions and millions of people in the UK alone, world leaders - Consumers, employers and investors are increasingly focusing on the social and environmental impact - Growing your organisation’s impact / Commissioning differently / Investing for social as well as financial return Examples: Elvis and Kresse’s designer accessories are made from old fire hoses and half their profits go to the Fire Fighters Charity. Jamie Oliver’s Fifteen trains disengaged young people to become successful chefs.

What has happened so far? Not going to bore you with a detailed history lesson, but worth noting: Not a brand new idea - momentum has been growing over 15 years Major milestones achieved - UK is the world leader in social investment Policy developed across central and local government, with cross-party support Examples: Social Investment Taskforce kicked things off in 2000. First social impact bond at Peterborough prison in 2010.

Increased supply Stimulated demand Created environment What have we aimed to do? Increased supply Big Society Capital (the world’s first independent wholesale social investment institution, building the market) Social Investment Tax Relief (another world first - provides a financial incentive for individual investors to provide social investment capital) Dementia Discovery Fund ($100m combining public and private money to create positive social impact – DH, Alzheimer’s Research UK, pharma companies) Stimulated demand Investment Readiness Programme (tailored capacity-building support to help secure social investment, win public service contracts, measure their impact) Social Incubator Fund (backed 10 social incubators to provide capacity-building support to over 235 social start-ups) Access – the foundation for social investment (£100 million charitable foundation, in partnership with the Big Lottery Fund and Big Society Capital) Created an enabling environment Centre for SIBs (to provide advice, tools, funding via SOF for local SIBs, YEF, FCF in partnership with other departments) G8 Taskforce (established by the Prime Minister in the last Parliament to bring together global expertise) GREAT campaign (to promote the UK as the global hub for social economy and increase social investment into the UK) What have we achieved? Over 30 SIBs have been launched across the UK Almost 500 social sector orgs supported by our initiatives £0.6bn committed by BSC and co-investors Created environment

Transforming public services Growing the social economy What are we doing now? Transforming public services Making it easier for public sector commissioners to buy social outcomes (GO Lab, Life Chances Fund) Building capacity within government to use social investment (supporting other government departments understand SI as a policy tool) Supporting the growth of innovative investment models (so that the public, private and social sectors can work together for social impact) Growing the social economy Understanding what mission-led businesses need (and how they ‘lock in’ their social mission without using a regulated legal form) Addressing legal and regulatory barriers to growth. Maximising the effectiveness of the Social Investment Tax Relief. Moving towards mass participation in social investment – institutional investors as well as trusts, foundations and individuals Ensuring market infrastructure works for social sector organisations Evaluating whether existing infrastructure is working effectively Actively intervening to strengthen the chain through which investment reaches social sector organisations Other wider efforts to support social sector organisations (Local Sustainability Fund secure more sustainable way of working through new operating models) Supporting market infrastructure

What does the future hold for growing the social investment market? Scale Number (for example, increases in numbers of deals, social enterprises) Size (for example, increases in sizes of investments, blended funds) Diversity (greater range of organisations, models available) Mainstream More awareness of social investment among commissioners (SIBs as a mainstream option to be considered for any contract for social outcomes) More involvement from high street banks and institutions in social investment (a range of products that offer social as well as financial return) More businesses putting social impact at the heart of what they do, not just in their CSR budget Partnerships We have not achieved any of this alone Always with others from government, the private sector and civil society Will continue to bring together collective expertise and experience to solve problems and create new ideas

What does this mean for next steps? For us, the future will be as the newly rebranded Government Inclusive Economy Unit, which includes responsibility for social investment. We aim to: Grow investment in social impact: - Catalyse private investment, and - Support the market that generates social impact alongside financial return - Get corporates, institutions and individuals involved as well Improve delivery of public services: - Develop models for public sector commissioning and service delivery - Which increase social impact and offer value for money - e.g. SIBs, public sector mutuals Encourage responsible business: - Mobilise the power of business to generate social impact - Social enterprise start-ups  companies that aim at ‘profit with purpose’ Next steps for you (regardless of your current level of knowledge or sector): Network: Use today to speak to people, build relationships, perhaps even across sector boundaries Replicate: Learn from existing examples and models and try something out Innovate: Adapt these or invent your own way of achieving greater social impact I look forward to hearing your questions and ideas!