Funding news

New Social Impact Bond Fund announced - 23 November 2012

The government has announced a £20 million Social Outcomes Fund to back social impact bonds and other payment-by-results contracts.

The fund will offer a matching element to allow bodies such as local authorities and health trusts to commission a payment-by-results contract in partnership with government. The element the public body must pay will be small enough for them to make savings if the contract succeeds.

It expects to back between 10 and 20 ventures and to make investments of about 20 per cent of the total value of a PBR contract. It hopes to attract £60 million of investment from other public bodies.

Francis Maude, minister for the Cabinet Office, said at the launch that government had been proved not to be good at solving problems such as "homelessness, worklessness and community breakdown" and that the government needed to find ways to find social enterprise and charity to do so instead.

He said that charities often didn’t have the resources to fund a payment-by-results contract, and that the outcomes fund was intended to help solve this problem by setting up social impact bonds, which transfer the risk to social investors.

He said the fund was a "big opportunity" for social organisations to approach commissioners with new ideas for bonds.

More details are available at the Cabinet Office website.

Source: http://www.thirdsector.co.uk/bulletin/third_sector_daily_bulletin/article/116132