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Social impact bonds ‘will become the norm’ for government funding, says charities minister

 Social impact bonds ‘will become the norm’ for government funding, says charities minister
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Social impact bonds ‘will become the norm’ for government funding, says charities minister4

Finance | David Ainsworth | 3 Mar 2016

Social impact bonds will shortly be the most talked about method of public funding, Rob Wilson, the minister for civil society said yesterday.

Wilson gave a speech in London to the Social Investment Academy, an organisation which is designed to encourage investors to focus on social returns. He told delegates that social impact bonds were a “no-brainer” and that “the time for social investment has arrived”.

A social impact bond is a type of payment-by-results contract where a charity is backed by an investor to deliver a service to government, with agreed targets, such as decreasing obesity among a target population or reducing reoffending in particular area. The government only pays if the charity hits its targets, and the investor share the risk.

“Social impact bonds are barely mentioned in the media today,” Wilson said. “In a few years’ time they will be the most talked about funding mechanism for government social projects. I will be talking about them a lot.

“Social investment is growing. It will play an increasing role in how the sector will be funded and there is a role for all of us in achieving this. Social investment can accelerate the growth of new businesses, transform the impact of our public services and support stronger communities to tackle the social challenges that they face.”

Wilson also said he had embarked on a programme to reform the charity sector to make it work better.

“I’m pleased to inform you today that this government has embarked on a somewhat overdue and ambitious reform programme for charities and social enterprises,” Wilson said.

“It is my aim to deliver a sector that is more independent, more resilient and more sustainable. Better able to meet the many challenges that it faces.”

In an interview with Civil Society News earlier this year he said he wants to create a market for social impact bonds worth “at least £1bn” by the end of the Parliament.

 

Colin Davies
Director
C21 Consulting
5 Apr 2016

I like the idea of Social Impact Bonds and politically it's not unusual for things like this to be heralded as the next big thing. To offer one solution as a panacea for charity funding does however demonstrate a poor understanding of the sector and its complexity. The sector needs a rich mix of funding mechanisms and will do for some time to come even when you're talking about the narrow field of government work or contracted delivery. Having said that the sector is facing a crisis of change and I welcome measures which offer a way to secure long term financial sustainability for the third sector.

Rarry Revan
Ranter
Rantingrules
4 Mar 2016

“Social impact bonds are barely mentioned in the media today,” Wilson said. “In a few years’ time they will be the most talked about funding mechanism for government social projects. I will be talking about them a lot."

That is assuming you are still the minister for kicking charities in the future Rob and not shafting another part of society that might shine some light on the government's lack of effectiveness.

R

Barney Mynott
NAVCA
3 Mar 2016

To say this will be the norm for funding is a bit depressing - and very short sighted. There is a role for social impact bonds but they need to be used alongside other forms of funding. And grants are a key part.

Why set about tackling issues without giving yourself the full range of tools available?

Sir Robin Bogg
CEO
BUBB
3 Mar 2016

Is this the big announcement you have been teasing us with, Rob?

The one that will make people "look a bit silly"? I note you don't actually offer any detail as to exactly what you have embarked on.

Which is a bit silly.

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