Abstracts: March 27th, 2013

This report gives a snap-shot of the status of social investment innovation. It describes how public-private partnership structures are emerging.

The report from the Cabinet Office draws together the insights of senior policy-makers, investors, advisors, academics and analysts from over ten countries. It highlights a range of issues in the development of the social investment market. It also describes new social finance instruments, the experience of implementing Social Impact Bonds and the recently launched government initiatives to tackle social problems through payment by results.

The UK is leading the world in the development of SIBs and the government has launched a series of initiatives to accelerate the market further including the Big Society Capital, the world’s first wholesale social investment bank, the creation of the £20m Social Outcomes Fund, and the Centre for Social Impact Bonds based in the Cabinet Office.

Social impact bonds are a UK innovation that is being applied by governments all over the world, as they strive to procure services in a way that aligns financial and social incentives for governments, service deliverers and private investors.

The Social Outcomes Fund helps tackle the problem of costs for an intervention borne by one part of government reaping benefits across other government agencies, which has previously inhibited the use of SIBs.

The Centre for Social Impact Bonds is concerned with disseminating information on SIBs to assist in their successful development; creating template legal contracts to reduce transaction costs; providing better data on public service costs; and providing light-touch support to individual SIB developers.

The report also features the Future for Children Bond, recently released by Allia. The Future for Children bond will invest 20% of its capital in Essex’s social impact bond for children on the edge of care. This is the first time that retail investors can invest in a social impact bond.

The Essex social impact bond is summarised in the report, along with other social impact bonds in the UK.

The Social Investment Market: The role of public policy in innovation and execution’, can be download here.