Growing the local social economy with place based investment Chris Dadson Business Development Manager The SIB Group are + About SIB Group Local Impact Funds: Overview • ‘Local Impact Funds’ direct investment into local areas to increase jobs and growth, grow a social economy and support social entrepreneurship. • Local Impact Funds can deliver ‘place based social investment’. They: • Combine wrap around business support with growth investment. • Connect EU, national and local supply with local demand for finance. • Support local economic and public services strategies. • The Liverpool pilot fund was launched in January, we are looking to launch a second pilot fund in Northamptonshire before the summer. • 10-20 Local Impact Funds could be set up over 2014-17. Local Impact Funds: Context and rationale Charities and social enterprises have a positive impact on society and economy • 38% work in the 20% most deprived communities in UK (compared to 12% SMEs). • £1 public investment generates £6.25-£8.33 of GVA (£3.57 across all markets). There is a demand for social investment • £1.3bn - £2.1bn annual demand for social investment, £286m of deals in 2012. • 38% annual growth of the social investment market: £1bn of done deals in 2016. There is a supply of social investment • BSC - £600m. • €6bn of EU funds, 2014-20, can be drawn on. We need mechanisms for connecting supply to demand… Local Impact Funds: Vision • Be locally driven, flexible, and responsive to need and context. • Provide a tailored package of support and finance for charities and social enterprises at all stages, from start up to sustainability and growth. • Build on existing local infrastructure and support, drawing into one place an appropriate blend of national and local actors, enhancing not duplicating activity. • Support social economic growth anywhere in the world. Don’t rely just on EU funds, as any group of interested partners could collaborate on this initiative. Local Impact Funds: Importance of ‘Local’ • Charities and social enterprises need to sell their products and services into functioning local markets if they are to thrive. • Local stakeholders can help enable the sustainability of Local Impact Funds: • Clinical Commissioning Groups (CCGs) • Local Authorities • Police Crime Commissioners (PCCs) • Other ‘buying’ institutions such as Universities, Housing Associations and large local employers. • Ultimately the Local Impact Fund can be an engine for public service reform, and provide a hook for corporates to support the sector through CSR activity. • The new Social Investment Tax Relief is a big opportunity to attract new and local investors into solving local problems. The time is now to make the most of these opportunities… Local Impact Funds: Model Type of investment: • Unsecured loans Investment terms: • £50,000 - £250,000 (av. c.£100,000) • Up to 5 years Pipeline support: • Start up, incubation, investment readiness • Different in each LIF area Liverpool City Region Impact Fund: pilot 1. The Liverpool City Region Impact Fund (LCRIF) is a partnership between the Adventure Capital Fund (SIB’s parent charity) and Social Enterprise North West. 2. We launched the £2m pilot Fund in January 2014. It will be open to applications from charities and social enterprises in the LCR from 1 April 2014. 3. It draws on £1m of existing EU investment from the 2007-13 programme, which ACF is matching with £1m from its Communitybuilders fund. 4. The LCRIF is linked to an existing £7m business support programme, Big Enterprise in Communities (BEiC), being run by SENW. 5. The LCR LEP has allocated 2014-20 EU money to build on the pilot: • £1.7m of ESF, for a £3.4m wrap around business support programme. • £3m of ERDF, for a £6m Local Impact Fund. GM and the 3 other North West LEPs are interested… Scaling the model up • The SIB Group has successfully applied to run the Liverpool City Region Impact Fund and will manage ERDF as part of the UK’s first Local Impact Fund. • We are on target to establish a second pilot in Northamptonshire. • We will evaluate both pilots to share learning with interested stakeholders. • We believe there may be demand for around 10 Local Impact Funds in 2014, and up to 10 in 2015 – 2017. • We will share learning and work collaboratively through a network of partners who set up and manage Local Impact Funds. • We are investigating the potential to create a template approach to developing, financing and managing a network of Local Impact Funds. More information about us www.sibgroup.org.uk @TheSocialInvest 020 7842 7788