Dan Gregory Chief Officers Feb 2011Presentation Transcript
Local Partnerships The DH Social Enterprise Investment Fund, case study and lessons learned
Capital, finance, investment vs. revenue, funding, income
(debt, grants, equity) (grants, contracts, fees)
Investment need to respond to / be tailored appropriately to the potential for income generation. E.g. you only lend to someone if they can afford to repay. And you should only borrow to invest for the future.
So what is the potential for revenue generation? In other words, what is the ‘state of the market’…?
Case study: The market for community health services
Uncertain future commissioning landscape
Provider side dominated by state providers but opening up
Payment by results?
Comparison with youth services?
The Social Enterprise Investment Fund
To support the delivery by social enterprises of innovative health and social care services and products;
To provide start-up funding and longer term investment to emerging and existing social enterprises in the health and social care sector with a view to securing their sustainability.
For the SEIF to become financially sustainable through returns on non-grant investments and through leverage of funds from external investors.
For emerging and existing social enterprises
SEIF investment policy – the theory
Viable but not bankable
Business development grants
SEIF – challenges in practice
Perverse incentives for fund manager and Department:
Investment approach vs. programme model
A youth sector spin-out fund?
NESTA call for proposals
to use BSB capital to attract co-investment into a sustainable fund, which will provide financial support to youth services which wish to spin-out of the local public sector into viable social enterprises.
What is the opportunity?
To provide the financial means to catalyse, nurture and support the spin-out of youth services from the local public sector, into viable social enterprises.
To accord with an overall national and local policy direction , a move to a plurality of local services provision, moving services closer to the communities who rely on them.
To focus on youth services in particular, an area of national and local priority where there is evidenced demand for alternative means of delivery.
To leverage BSB capital by attracting co-investment into a fund which will provide the financial support for local youth services to spin-out into social enterprises.
To fill a gap in the market , fledgling spin-outs are typically un-bankable but spinning-out takes both human and financial resources.
Who will invest and how? Big Society Fund? Bank? (quasi-) equity Nesta f HSBC? CFS? Debt Commercial Lenders e Bridges? Baxi? (quasi-) equity Social VC d CAN? SFCT? Grant Social Investors c Local Authority? Grant Public sector b Staff and community? Equity Stakeholders a Example Investment Investor
Does this investment model respond to / is it tailored appropriately to the potential for income generation?
Could this offer an opportunity to create a social investment fund for the youth sector?