{"id":14812,"date":"2013-06-06T13:28:37","date_gmt":"2013-06-06T13:28:37","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=3d51d3bbc15e4fd50d55d133be60f8a5"},"modified":"2013-06-06T13:28:37","modified_gmt":"2013-06-06T13:28:37","slug":"speech-g8-social-impact-investment-conference","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=14812","title":{"rendered":"Speech: G8 Social Impact Investment Conference"},"content":{"rendered":"
\n

Introduction<\/h2>\n

Last week I visited a community project in Newham, an East London borough, not far from here.<\/p>\n

There I met a group of teenage boys, all of whom, because of a tough home life, behavioural problems, or learning difficulties, had been identified as vulnerable. <\/p>\n

Normally their progression would be from the front of the class to the back of the class\u2026 and eventually, because of their poor behaviour, they would be excluded from school.<\/p>\n

From there, it is a slippery slope to worklessness, and in extreme cases, gangs and crime.<\/p>\n

Yet in Newham, something had changed for some of these children.<\/p>\n

As the result of an innovative mentoring programme and thanks to some social investment, outcomes are now more positive.<\/p>\n

Top and bottom<\/h2>\n

Yet across the UK, and the G8, too many vulnerable individuals still face a bleak future.<\/p>\n

This is something we must end, for the spiral into disadvantage is not only a drain on public funds and a drag on economic growth\u2026 <\/p>\n

\u2026 it\u2019s also a tragic waste of potential.<\/p>\n

Cut adrift from the labour market, all too often, those at the bottom of society come to feel they have no productive role to play.<\/p>\n

Meanwhile, at the top, we find some of our most successful and well rewarded professionals productively involved in wealth creation.<\/p>\n

The result is we are left with a society increasingly torn, as the gap between the top and bottom grows ever wider.<\/p>\n

Social investment<\/h2>\n

The question for all of us in the G8 is how we go about bringing these two ends back together \u2013 building a more cohesive society, and benefiting our economy at the same time.<\/p>\n

I believe the answer lies in social investment\u2026<\/p>\n

\u2026 a hugely exciting opportunity to use the skills of one group, to unleash the potential of the other.<\/p>\n

Historically, it has been left to governments to pick up the pieces of social breakdown \u2013 meeting that responsibility through the welfare, health, criminal justice systems, and so on\u2026<\/p>\n

\u2026 or, to philanthropists, using charitable donations to make a difference, but without expecting anything in return. <\/p>\n

For the rest \u2013 the \u2018profit maximisers\u2019 \u2013 investing money has too often meant putting it into commercial ventures and having to forget about the social consequences.<\/p>\n

Social investment is about unlocking a new approach, saying to investors across the world:<\/p>\n

\u2018You can use that money to have a positive impact on society, AND you can make a return.\u2019<\/p>\n

Social outcomes<\/h2>\n

The key, I believe, lies in identifying that any meaningful, positive improvement in a social problem comes with a value attached.<\/p>\n

Take the boys in Newham \u2013 for whom every record of attendance, every qualification gained, every job entry, is valuable\u2026<\/p>\n

\u2026 both in terms of a social return, as these teenagers develop into participating members of society\u2026<\/p>\n

\u2026 and a financial return, as government pays out less in costly social services.<\/p>\n

By putting a monetary value on each social outcome, government can then pay, not for the process of tackling the problem, but for results at the other end.<\/p>\n

In the UK, that is what we are doing with the Work Programme, the largest payment by results employment programme this country has ever seen\u2026<\/p>\n

\u2026 paying providers for the outcomes they achieve in getting the hardest to help into work and keeping them there.<\/p>\n

Because we are paying by results, the government pay for what works, reducing the risk to the taxpayer\u2026<\/p>\n

\u2026 AND the money follows the outcome, so providers are only rewarded for the positive life change we want to see.<\/p>\n

New funding streams<\/h2>\n

Social investment develops this model further still \u2013 opening up a whole new funding stream.<\/p>\n

Having monetised the outcome, by underwriting the return, government then allows investors to buy into a social bond\u2026<\/p>\n

\u2026 in turn, drawing in money from social enterprises and charities\u2026<\/p>\n

\u2026 as well as high-net individuals and those in the private sector, who would never previously have thought they could be part of the solution for change.<\/p>\n

The effect this investment can have is dramatic.<\/p>\n

Imagine you create a social bond in a particular deprived neighbourhood \u2013 be it in London, New York, Berlin or Moscow. <\/p>\n

Investors buy into it and as with any investment, will want to see it flourish.<\/p>\n

Because they are risking their money \u2013 money that could otherwise be reaping a return elsewhere \u2013 those investors will want to see that social programme succeed, bringing a whole new discipline and rigour to how it is delivered.<\/p>\n

This is the fidelity guarantee \u2013 ensuring what you pay for is delivered, nothing more, nothing less.<\/p>\n

Or to use a British term, that \u2018it does what it says on the tin\u2019.<\/p>\n

But what\u2019s more the same investors will want to take an interest in that community where they would otherwise be totally detached.<\/p>\n

In doing so, these wealth creators could have a powerful influence on the communities themselves\u2026<\/p>\n

\u2026 a human interface between two different worlds, bringing success to the doorstep of failure.<\/p>\n

Innovation Fund<\/h2>\n

The UK government is a global leader in putting this idea into practice.<\/p>\n

We now have 13 social impact bonds now up and running, 10 of which are financed by my Department\u2019s \u00a330 million Innovation Fund\u2026<\/p>\n

\u2026 testing cutting-edge projects to improve the employment prospects of our most disadvantaged 14-24 year olds.<\/p>\n

Under the Innovation Fund, each social investment partnership has freedom to determine how their own approach \u2013 meaning we are seeing a real variety of delivery models\u2026<\/p>\n

\u2026 some that challenge the status quo\u2026 others harnessing inspirational leadership\u2026 and many tailored to the needs of local young people.<\/p>\n

In less than a year, over 6000 young people have been helped and over 1800 positive outcomes achieved\u2026<\/p>\n

\u2026 so we\u2019re already seeing these programmes develop a meaningful track record. <\/p>\n

With more time and a greater evidence base, the intention is that they could be rolled out on a national basis. <\/p>\n

Growing the market<\/h2>\n

But as well as showcasing what can be achieved through social investment, I believe it is also government\u2019s job to help grow the social investment market\u2026<\/p>\n

\u2026 establishing the right fiscal and regulatory infrastructure for the market to flourish.<\/p>\n

Crucial to doing so is an understanding of what works \u2013 so that money can flow to those interventions that get results.<\/p>\n

That is why in the UK, the government is supporting a number of organisations to develop our evidence base\u2026<\/p>\n

\u2026 including launching an independent body \u2013 the Early Intervention Foundation \u2013 to rigorously assess what works, determining value for money\u2026<\/p>\n

\u2026 and to advise local commissioners, providers and potential investors on the best evidence-based programmes.<\/p>\n

Through these steps already taken, and those still to come \u2013 notably our aim to introduce a tax relief on social investment, with a consultation launched today\u2026<\/p>\n

\u2026 I believe we can harness the full potential of the social investment market \u2013 by some estimates, worth as much as \u00a31 billion in Britain by 2016.<\/p>\n

Conclusion<\/h2>\n

Representatives from G8 are here today because this opportunity is greater than Britain alone.<\/p>\n

We want to see a step-change, encouraging and enabling a dynamic social investment market across the globe.<\/p>\n

I believe Newham is a microcosm of what could be achieved right across the UK and even the G8 \u2013 savvy investors in partnership with an inspirational voluntary organisation, working tirelessly to achieve social justice.<\/p>\n

To make this a reality, all of us here\u2026<\/p>\n

\u2026 whether representatives of government, business, the financial, voluntary or social enterprise sectors\u2026<\/p>\n

\u2026 have a role to play\u2026 <\/p>\n

\u2026 applying our knowledge and resources where they can have the most impact.<\/p>\n

In doing so\u2026 from Paris to Tokyo, Toronto to Rome\u2026 we can make a transformative difference.<\/p>\n

What we now need is all nations to work together, with a meaningful G8 commitment to this agenda.<\/p>\n

Driving success, securing a return and changing lives.<\/p>\n

Let bring Wall Street and the City, to the inner city and poorer streets.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Speech by Rt Hon Iain Duncan Smith at G8 Social Impact Investment Conference.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/14812"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14812"}],"version-history":[{"count":0,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/14812\/revisions"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14812"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14812"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14812"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}