Social Finance in the UK: Cutting Edge, Bleeding Edge
In business there is belief in “first mover advantage”, when a company gains an advantage over competitors by being first to the market with a new product or service.In the social finance realm, Canadian practitioners have benefited from following UK’s social investment and social finance ecosystem, which is strongly supported by the government. The UK was able to pioneer and act as a role model for many new ideas and approaches that outsiders could learn from, emulate, or adapt. These include The Charity Bank, Bridges Ventures, ClearlySo, The Social Investment Task Force, The Commission on Unclaimed Assets, The Young Foundation’s and Social Finance UK’s social impact bond work, and more.
Now we are in the position of watching as the newly elected UK coalition government faces the challenge of wrestling with an enormous budget deficit. It has announced 30-40% cuts to departments across the board; the only ones protected were health and overseas aid. Hardest hit were charities and nonprofits - one charity advisory service, New Philanthropy Capital, predicted cuts to the sector of between £3.2bn and £5.1bn.
The austerity budget comes at the same time as the UK government has launched a new Big Society initiative that would see many government services outsourced to nonprofits and social enterprises. The goal is to deliver better local services managed by local communities better attuned to community needs.
While the verdict is still out, massive cuts can clearly undermine a Big Society agenda since infrastructure, capacity building and other support may not be available for assisting communities and their organizations to assume greater social responsibilities. Unsurprisingly, there is a dynamic debate underway in the UK about Big Society, its evolution and institutions, and the impact of the budget cuts. SocialFinance will try and cover further developments in this contested terrain in order to track lessons applicable to Canada.
An introduction to UK resources on this debate:
New books have been published, such as The Big Society Challenge (edited by Marina Stott) from Keystone Development Publications (available as a PDF download), which has one chapter on the Big Society Bank.
Adrian Brown from The Institute for Government has a lively blog, the latest entitled “The End of the beginning for the Big Society”.
Another informed follower is the London School of Economics through its British Politics blog that is covering the challenges of operationalizing the concept at a grass roots level.
Advocates of The Big Society have their own web site.
A voice for the social enterprise community, Social Enterprise magazine has excellent on-going coverage.
Individual commentators with blogs include:
- Rod Schwartz of ClearlySo
- Sir Stephen Bubb, Chief Executive of ACEVO (Association of Chief Executives of Voluntary Organisations)
- Peter Holbrook, CEO of the Social Enterprise Coalition (UK)
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