There are some hidden nuggets in the budget designed to entice those of us who regard strengthening civil society as a
sine qua non of good governance - and for those of us who regard social investment as a key element of a rebalanced, ethically investing, asset owning, all-round-good-egg economy.
While there was nothing genuinely new from the Government in this space - and as Kim has noted in
this post we await substantive detail on the new 'green investment bank' - there were some recycled announcements and interesting details that suggest a promising direction of travel - and one, as with many things pertaining to civil society and social innovation, that has significant cross-party support, and so has every chance of progressing.
The first thing, in red book section 6.45, was the crystallisation of the
Total Place Pilots into a few micromeasures. Radicalists will bemoan this as 'tinkering,' but it is not insignificant. Total Place, which allows localities to coopt funding streams into a 'single offer,' and so co-design services across sectors, using more individual budgets (ideas ResPublica are investigating in some detail in our upcoming innovation research projects) represents a real form of budgetary devolution. Red book section 6.45 announced £1.3bn of ringfenced of funding given to local authority discretion, reducing pertinent indicators to 18 and various streams from 110 to 94. Not exactly 'freeing the slaves,' but baby steps towards some promising work in this direction.
Even more interesting was to be found in boxes 6.1 and 6.2 of the red book. The great Sir Ronald Cohen and similarly great Toby Eccles announced a
huge success last week: the implementation of the first social impact bond, to encourage more private sector investment into outcome-based service delivery in the reoffending and prison sector. The model is fantastic and promises a real micro-economic and macro-economic change; more private money for social purposes and more widely, a move to what we refer to as 'The Blended Economy' (and watch this space for more research and innovation on that). There was not so much a new annoucement on this as recognition of the work taking place and a commitment to learn therefrom.
Thirdly, red book section 6.2 saw the treasury fill in a little welcome detail on the much delayed Social Investment Bank. The point of this much-misunderstood institution would be to bring money into scale social projects; ideally (as I see it) to get more private money into social projects. I am not sure the Government really understood this and have been coy on the model they would use. Per section 6.2, the model that the Government now appear to have settled upon is one that keeps the money in the sector and encourages retail organisations to coinvest with the wholesale bank, rather than, as with the social impact bond for example, encouraging private sector organisations to invest through tailored vehicles specifically for social investment. It is not the most transformative way of getting more money to social enterprises, and worse, as it is, the Government's social investment bank is
woefully undercapitalised; the Government have pledged to begin with £75m of cornerstone capital. Sir Ronald Cohen, ACEVO, the NCVO all agree - not enough at all to get going.
And that is very sad, because it misses a very great opportunity; an opportunity in which the social investment bank is a key element. These three innovations especially are intimately linked. By capitalising the CDFI sector through the social investment bank and freeing up local authorities through total place to invest in social impact bonds, a real incentive and marketplace emerges for the private sector to invest in good, cross-cutting community projects. At this point, the much campaigned-for British version of a
Community Reinvestment Act becomes important. With a well-tailored, capitalised social investment market, good quality structured social impact bonds available to all financial institutions, this would free up the private sector to discharge potential future CRA obligations by
innovating and creating new forms of social impact or other bond. The whole represents an attractive vision of a future British social investment landscape.
So, one cheer for budget 2010 as a work-in-progress of promise and very good intention. The building blocks are almost in place. The ideas are sort-of coming together. Baby steps are all very well, but some more radical thinking in some areas is needed to take advantage of the huge innovations in others - as well as a bit more boldness overall. We would prefer fewer baby steps and more of a much-needed leap into the ethical economy: one of the few remaining boom sectors of the west.
PS: a little discussed section is red book 6.52, which states that details of how capital fiscal stimulus will be spent will be made transparent and put online. Great! The Post-Bureaucratic Age in action! But why then, when downloading the budget chapters, this year, as last year and every year before, was it such a pain. I know the treasury feel the need to guard against all-too-rapid rebuttal, but surely even they realise how irritating it is for most of us?