Interviews

Showing social investment works

Finance | Vibeka Mair | 20 Jun 2011

In August, Jonathan Lewis leaves social lender Social Investment Business to become chief executive of NHS spin-out Bromley Healthcare. Vibeka Mair interviews Lewis on his time with the UK’s largest social investor.

It’s getting off to a slow start, but the Big Society Bank looks set to mark a new dawn for social investment, bringing a potential £400m into the market. But before this, in 2007, a new-style social lender entered the market with a relatively modest £15m, before growing into one of the largest social investors in the country.

The organisation started off as the Adventure Capital Fund, which then became known as Futurebuilders – generating the organisation's biggest fund to date, finally settling on Social Investment Business – a clear catchall to describe the organisation, and a nod to its ambitions to run the Big Society Bank, a concept known as the social investment wholesale bank under the Labour government.

Its outgoing and first chief executive, Jonathan Lewis, says he is most proud that Social Investment Business has shown that social investment works:

“With Futurebuilders (the £215m fund managed by Social Investment Business on behalf of the Office for Civil Society) we were supposed to help charities win something like 300 contracts. In fact they won over 800, which shows that if you give them a bit of appropriate help they can win lots of contracts by providing innovative and transformative services.”

Lewis is also proud that the write-off rate of loans with Futurebuilders was so low, especially since it funds organisations which can’t access traditional finance.

“Through Futurebuilders, we lent £120m to organisations which couldn’t get bank finance, and the culminative write-off rate on that money over six years is less than 4 per cent. I’m extremely proud of this fact.”

Despite its positive effect in financing the charity world, some have criticised it for growing so large so quickly – it has managed a number of funds on behalf of the government and is worth around £400m. Lewis makes no apology:

“Though it was slightly unpopular to grow this quickly, I think creating a large social investor moves the market on a little bit, and the market is going to be moved on again by the Big Society Bank.”

Lewis’ time at Social Investment Business could be viewed as the frontier of social investment. His new role follows a similar pattern. Lewis leaves to head the staff-run NHS social enterprise spin-off Bromley Healthcare, one of many public service providers deciding to become a mutual under minister for the Cabinet Office Francis Maude’s new "right to provide" agenda. Maude is leading a drive to support employees of public services to set up mutuals.  Bromley Healthcare is a staff-run healthcare provider organisation rather than a commissioning one. Lewis joins it as chief executive in August.

Lewis says it is a natural move: “I think I am staying in the same world – going to an organisation driven by a social purpose.

“I’ve left Social Investment Business as I think I’ve taken it to a stable place. When I started there were four of us in a room with £15m to play with. Now we are the largest social investor. We are well funded. We have a good reputation and we have two years of guaranteed existence based on our current contracts.”

“Now it’s time for someone else to come up with other ideas and take the company in a new direction.”

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Directory: The Social Investment Business
Who's Who: Jonathan Lewis