The government’s big society advisor has said that new social investment methods and payment-by-results contracts will easily exceed the current loss of third sector funding fuelled by public spending cuts.
Lord Wei also said, however, that in order for social investment to reach its market potential — which could be as high as £10bn, he says — the sector will have to massively develop its abilities to measure and evidence its social impact. “There are not enough organisations that can measure their outcomes or how much money is recoverable from the state budget because of what they do,” Wei is quoted as saying in Third Sector Online. “I’m looking forward to developing that.”
I bet he is. Having been at a recent workshop on Social Impact Bonds (SIBs) run by Social Finance (reported in this post), I came away convinced that the social investment marketplace represents a bonanza for intermediaries selling professional services.
In this respect, I think SIBs will turn out to have something in common with private finance initiatives: their operating costs (design, management, monitoring, administration etc etc) will be huge.
If social investment really does become a primary means of financing public service delivery, then — like PFI before it — it is a marketplace that will grow not because it’s good for people, but because it’s good for the City firms seeking to sell their professional services within it.
The only difference will be that social investment will see some of our own sector bodies swallowing their principles and joining the queue to earn vast sums of money for providing ‘expert services’.