This report assesses the performance and impact of the Investment and Contract Readiness Fund (ICRF) and makes six recommendations for the improving the Fund.
The Investment and Contract Readiness Fund (ICRF) aims to ensure social ventures are better equipped to secure new forms of investment and compete for public service contracts. It is the first fund of its kind globally and includes several innovative design features such as the use of an Investor Panel to evaluate applications and the introduction of repayable components to grants. This report, commissioned by the Cabinet Office, the Social Investment Business and Big Society Capital, draws on evidence from investors, providers and ventures, as well as the activity of the Fund, to assess the performance and impact of the Fund and make some recommendations for the future.
While the majority of activity supported by the Fund is yet to be completed there are already some strong positive themes. The emerging evidence suggests that the Fund is an important intervention both to improve the investment and contract readiness of social ventures and to help strengthen providers of investment and contract readiness services. The £21.4 million of investments raised and £13.5 million of contracts won so far as a result of ICRF supported activity is impressive and indicates the Fund could ultimately help social ventures win more than £100 million worth of investment and contracts.
The Fund has seen significant levels of activity since it opened for applications in May 2012 with over 200 applications up to December 2013 with a relatively even split between investment readiness and contract readiness proposals. Ventures applying to the Fund have varied significantly in size and financial strength and there has also been a wide variation in provider performance.
In assessing the impact of the Fund we considered three main criteria: investments raised or contracts won by the supported ventures; the extent to which the capabilities of ventures have been built; and the extent to which the provider market has been strengthened. Against all three dimensions our research found evidence of significant and positive impact.
Our research also highlighted six areas in which the Fund could be improved.
1. Increase transparency of provider performance
2. Improve feedback from the panel to applicants
3. Enhance the contract readiness experience on the panel
4. Reduce or remove the direct grant to ventures
5. Improve the predictability of the Fund
6. Enhance the role of the fund administrator
The success of the ICRF to date should be celebrated. Our research revealed widespread support for the Fund from ventures, providers and investors. All concluded that the Fund (or an equivalent) would be needed in the market for several years to come to ensure that increasing numbers of social ventures are investment and contract ready, willing to seek specialist support as required, and able to win in the market.