By Richard Johnstone | 23 January 2014
Liverpool has today launched the UK’s first local investment fund to provide financial support to social enterprises that want to expand.
The city’s £2m Local Impact Fund will offer business support and finance to local charities and social enterprises, providing unsecured loans worth as much as £250,000. It has been awarded money from European Union structural funds.
The scheme has been developed with the city’s local enterprise partnership by the Social Investment Business investor group, which hopes to eventually launch 20 such initiatives across England, providing more than £100m of social investment. Ten further cities and regions, from Devon to Cumbria, have already announced plans to set up their own programmes to meet the ‘unmet need’ for affordable place-based social investment.
Sir Stephen Bubb, chair of the Social Investment Business, said: ‘We believe that about 15 to 20 local enterprise partnerships will want to launch a Local Impact Fund by 2016, and we are already recruiting our next wave of partners.
‘We expect these funds to be between £5m and £10m initially, and they will be a critical first step in bringing social investment to communities anywhere in the UK.’
Speaking ahead of the launch, civil society minister Nick Hurd said there was ‘an exciting opportunity to support organisations that can bring both economic and social benefit to an area’.
He added: ‘Britain leads the world in developing the idea of social investment. It is fantastic that Liverpool leads the country in developing a Local Impact Fund. Where Liverpool leads, I hope that others will follow.’
Liverpool Mayor Joe Anderson added that he was confident the fund would show how communities anywhere in the country could benefit from social investment.
‘Liverpool has a strong tradition of social entrepreneurship, with people taking the initiative to improve life in their communities, and this innovative product will help deliver the finance they need to achieve their ambitions.’
The fund will be able to provide support and finance to charities and social enterprises at all stages of development – from start-ups to established organisations looking to expand.
EU money will have to be matched with national or local investment, such as the government-backed Big Society Capital.
It could also be used to help social enterprises take on public sector work through backing from local authorities, NHS Clinical Commissioning Groups and other public bodies. The government has been promoting the use of mutuals to deliver services through its Mutual Support Programme.
