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UK social investment market grows to £202m

The UK social investment market grew by up to a quarter to £202 million per annum in 2011- 12 through an estimated 765 deals, according to a new report published today (3rd July).

Growing the Social Investment Market: The Landscape and Economic Impact, authored by ICF GHK in association with BMG Research, has been jointly commissioned by Big Lottery Fund, Big Society Capital, City of London Corporation and Her Majesty’s Government. The research finds that over the lifetime of their finance period, these 765 social investments resulted in the creation or safeguarding of 340 UK social ventures, 6,870 UK FTE jobs and £58 million in GVA contribution to the UK economy in gross terms.

A total of 29 Social Investment and Finance Intermediaries (SIFIs) were identified as actively investing in 2011-12. There is evidence of greater coverage of the English regions and Devolved Administrations, which both reinforce London’s presence and highlight other developing areas within the UK. This indicates substantial diversity in the geography, sector and social outcomes of investments. However, SIFIs reported that they met only around half of expressed demand by social ventures, illustrating a significant funding gap1 . Improved access to finance, particularly to unsecured lending, is needed in order for the UK marketplace for social investment to reach its full potential.

Measured purely for economic impact (and not social impact), a social investment of just over £1 million achieves 100 net national FTE jobs. A 3 year social investment of £11 million would generate almost £1.9 million net additional GVA in the national economy over the period.

“Social investment is an idea whose time has come. A quiet revolution that Britain is leading to transform the funding environment for charities and social enterprises. It is early days but these figures show an uplift in both willing investors and new projects ready to take on funding. By measuring the size of the market, and the effect it is having on real people’s lives, we can build an evidence base to attract even more funding and social entrepreneurs.” Minister for Civil Society Nick Hurd

“The continued growth of the UK social investment market is vital to supporting over 180,000 social enterprises across the country that contribute around £55bn to the economy. The tax relief announced by the Chancellor in the Budget was a welcome step in the right direction and we now need to build on this by encouraging more private investment in the sector.” Mark Boleat, Policy Chairman at the City of London Corporation

“We welcome the evidence of the growing diversity of the social investment marketplace across region and products, however clearly much more still needs to be done. Big Society Capital has been working to address this through investing across a broad range of financing and operating intermediaries since our launch in April 2012. It is crucial that we continue to promote the diversity that the social investment market needs, both through the investments we make and by helping bring other potential investors to the market.” Nick O’Donohoe, Chief Executive Officer, Big Society Capital

“It is encouraging to see the key trends of significant growth and greater diversity of social investment products across a wider range of geographic regions and devolved administrations. The research also points to the work that key players, including the Big Lottery Fund, are undertaking in support of further growth. As a continuation of its commitment to social investment, the Big Lottery Fund will be launching two further funds this summer, which will work to help catalyse the social investment market in a way that supports the voluntary, community and social enterprise sector to deliver investment to support people and communities most in need.” Nat Sloane, Big Lottery Fund England Chair

Last updated | 
3 July 2013