The government is to set up a Social Impact Bond Centre of Excellence to support the development of more social impact bonds across the public sector, and has mooted a dedicated fund for outcomes-based finance through social impact bonds.

The Centre and potential fund have been announced in a new government report outlining its progress on growing the social investment market.

Over the next twelve months, government will focus on three areas to grow social investment.

It will set up a Centre for Excellence to develop more social impact bonds across the public sector, and will potentially launch an ‘Outcomes Finance Fund’ to enable social ventures to deliver large public service contracts through social impact bonds.

The report says while there is often strong political backing for social impact bonds, government departments can be reluctant to contribute to social impact bonds commissioned by others, because the model is relatively new. It hopes a potential dedicated fund for social impact bonds can enable better collaboration between public sector commissioners tackling complex issues across multiple departments.

As announced in this year’s Budget, HM Treasury will also review and remove legal, regulatory and financial barriers to social investment and social enterprise; and the government plans to support start-up social ventures through a potential Social Incubator Fund. 

Further, the report says government wants to encourage more social investment from high-net-worth individuals, charitable foundations and mainstream institutional investors; as well as individual savers through new social ISAs or pension funds.