A pot of dormant assets worth £880m is to be unlocked by the government to help tackle social issues.
It has also pledged an additional £31m to help impact investment organisations, as well as create wealth funds to help communities decide where money goes.
The announcement helps solidify the Community Enterprise Growth Plan, a coalition from the social, business and investment sectors that came together last summer to support communities that have not benefited from social investment.
This plan aims to use the dormant assets in three ways.
One, extend the availability of small, flexible affordable loans to smaller community enterprises through blended finance – using a mixture of grants and loans which have proved effective, particularly for investors in the most deprived communities.
Two, invest in non-profit community lenders in underserved areas to support micro-businesses and enterprises that struggle to access funds from mainstream banks.
And three, provide tailored business support. This includes advising start-ups and incentives like match trading to encourage small enterprises to grow into more challenging areas.
The growth of social investing has enabled organisations across the country to make more of an impact.
Examples range from an enterprise which turns wasted food into affordable meals in Sheffield, to a Birmingham enterprise helping ex-prisoners find employment and a Doncaster-based scheme providing affordable furniture to low-income families.
Nick Hurd, speaking on behalf of the Community Enterprise Growth Plan, said: “Over the last decade, in a large part due to the pioneering investment from dormant assets, the amount invested in UK charities and social enterprises has grown tenfold with more than £7.9bn invested in thousands of mission-led organisations working to tackle social and environmental challenges in our communities.”
Thanks to its role in leveraging capital, social investment can quadruple the amount of funding available to communities.
For example, Big Society Capital – the social investment vehicle created under David Cameron’s premiership – estimates that every £1 from the dormant asset scheme spent on social investment has unlocked another £3 from other investors.
It is though, not yet clear how much of the £880m will be dished out by the government or when it will be released.
But Stephen Muers, chief executive of Big Society Capital, said social investors are standing by. “The social investment infrastructure is already in place, meaning we will be able to deploy funds at pace,” he said.
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