The final report of the social investment taskforce, established in 2000 to assess how UK could achieve a radical improvement in its capacity to create wealth, economic growth, employment and an improved social fabric in its poorest communities.
It is now some ten years since the Social Investment Task Force (SITF) first met. Its specific remit was “to set out how entrepreneurial practices could be applied to obtain higher social and financial returns from social investment, to harness new talents and skills, to address economic regeneration and to unleash new sources of private and institutional investment”. In addition, the Task Force was asked to explore innovative roles that the voluntary sector, business and government could play as partners.
The recent recession has shown yet again that the most disadvantaged in society are hit hardest by economic downturns. There is a critical need for sustainable investment in poorer communities if free market societies are to maintain cohesion. It is the Task Force’s view that this can best be achieved through social entrepreneurship and investment effected by a powerful social sector that acts alongside government in tackling social issues.
Over the last decade, there has been a significant increase in the flow of investment to disadvantaged communities and there are some encouraging developments in social investment, together with signifi cantly greater interest from mainstream financial institutions as well as trusts and foundations. This has accompanied a shift in mindset and culture among voluntary sector organisations, which have become both more entrepreneurial and more focused on the sustainable achievement of their targeted social results.
In its report, Enterprising Communities: Wealth Beyond Welfare (October 2000), the SITF produced five recommendations for the Chancellor of the Exchequer that have since been implemented in varying degrees. The implementation of these recommendations by Government has led to:
- the introduction of Community Investment Tax Relief (CITR);
- matching finance to help set up the fi rst community development venture capital fund;
- additional disclosure by banks of their lending activities;
- legislative and regulatory changes to provide greater latitude and encouragement for charitable trusts and foundations to invest in community development finance; and
- the creation of the Community Development Finance Association (cdfa) to provide support for community development finance institutions (CDFIs).
The Task Force has continued to meet periodically, monitoring progress and considering further ideas to take the social investment agenda forward. This final report looks at the changes that have occurred over the past decade in the market for social investment in the UK. It then reviews progress achieved to date on each of the Task Force’s recommendations. Finally, this report focuses on three specific initiatives that will help defi ne the future of social investment in the UK:
- Establishing the infrastructure necessary to create a dynamic market in social investment through initiatives such as the Social Investment Bank;
- Creating new tools to deliver social change through financial instruments such as the Social Impact Bond; and
- Engaging the financial sector to invest in disadvantaged areas through a Community Reinvestment Act.
The publication of this report marks the completion of the Task Force’s mandate. The way ahead is clear and it is now time to set up a dedicated organisation, a Social Investment Initiative, to drive continued development of a powerful, sustainable and effective social investment sector in the UK.