Cameron plans to “transform our society by using the power of finance to tackle the most difficult social problems”. He highlighted that social investment could eradicate issues such as drug abuse, youth unemployment, homelessness and even global poverty.
Social enterprises, charities and voluntary bodies have the knowledge, human touch and personal commitment to succeed where governments often fail, Cameron said. “But they need finance too. They can get it from socially-minded investors. So, we need social investment markets, social investment bonds and social investment banks.”
Cameron announced three major new steps, as follows.
1. Tax breaks for social investments
In the Budget, Chancellor George Osborne suggested a consultation on Social Investment Tax Relief. Determined to see those benefits met, Cameron announced the need for suggestions on how such tax relief could be structured to help encourage as much as £500m pounds of extra investment.
“Social investment can no longer be the poor relation. I want you to help us shape an effective tax incentive that mirrors many of the features of the successful tax advantaged venture capital schemes,” Cameron said.
Big Society Capital has told the government that tax reliefs could generate an extra £500m in social investments over the next five years.
2. The Social Stock Exchange
Cameron plans on creating a “social stock exchange”, which will support online exchange and rate the savings from social investment schemes.
“For years the London Stock Exchange has made London the home for private finance. Today, London can cement its place as the home for social finance too,” he told investors. “The world’s first social stock exchange is an online portal that will become the first information platform on the planet to showcase publicly listed social impact businesses.”
The first 12 member companies – including Straight, Places for People and Accsys Technologies – were worth £500m, according to Cameron. The next group of businesses will join in October, which will add another £700m.
3. Help for communities to buy local assets
There are currently 311 community-owned shops, 18 community-owned pubs and bookshops, cafés, farmers markets and even broadband networks. But people need the right finance to make this happen.
Big Society Capital and the Big Lottery Fund will be offering a blend of long-term loans and grants to help communities rescue vital institutions through a new “community assets fund”. Cameron highlights that these social investment funds will give people the opportunity to buy these local assets.
Image sourceBy Shané Schutte
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