Social Investment Business and Social Enterprise North West today announced the first local impact fund pilot in Liverpool, making £2m available to charities and social enterprises in the region.
The Liverpool City Region Impact Fund will offer unsecured loans of between £50,000 and £250,000 for up to five years to about 20 charities and social enterprises to help them scale up their activity.
It is financed with £1m from Social Investment Business, through its parent charity the Adventure Capital Fund, and £1m from the European Regional Development Fund’s 2007-2013 programme.
Social Enterprise North West will also provide the potential for “investment-readiness” grants from its existing Big Enterprises in Communities Programme alongside the loans.
Organisations need to submit expressions of interest for loans by 28 February and will then be able to apply on the Social Investment Business website from 1 April.
Val Jones, chief executive of Social Enterprise North West, said: “Three in four social enterprises tell us that lack of finance is preventing them scaling up the good work they do. Local impact funds will give them the scale of funding they need to realise their ambitions.”
Nick Hurd, minister for civil society, added: “It is fantastic that Liverpool leads the country in developing a local impact fund. Where Liverpool leads I hope others will follow.”
The local impact fund model has been designed to use EU structural funds for economic development from the EDRF and the Eurpean Social Fund, which are controlled by Local Enterprise Partnerships in England and aims to attract match funding from investors like Big Society Capital, local authorites, Clinical Commissioning Groups and others.
Hopes to attract £100m in new funding
Social Investment Business predicts that if the idea takes off £100m will be made available throughout England, with ten other regions already looking at setting up a local impact fund.
Sir Stephen Bubb, chair of Social Investment Business and chief executive of Acevo, said: “There is a groundbreaking opportunity to use local impact funds to attract over £100m of new social investment in the next couple of years.”
He added that: “We believe that about 15 to 20 Local Enterprise Partnerships will want to launch a local impact fund by 2016.”
A second pilot fund is planned in Northamptonshire in partnership with the University of Northampton, demonstrating that the model can work without EU funding. It intends to launch in the summer 2014.
Social Investment Business plans to invest £1m in the project and a group of local public and private investors has in principle committed £2m.
The four other local enterprise partnerships (LEP) in the north west of England, Greater Manchester, Cheshire and Warrington, Cumbria and Lancashire have already committed to setting up a local impact fund. Other interested LEPs are: Coventry and Warwickshire, Heart of the South West, Humber and Leeds City Region.
Social Investment Business will hold a roundtable in London at the end of March for LEPs.
