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Social investment in health and social care. Richard Todd, Associate Director. Social Finance is authorised and regulated by the Financial Conduct Authority FCA No: 497568. 27 February 2014. What do we do?.

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social investment in health and social care

Social investment in health and social care

Richard Todd, Associate Director

Social Finance is authorised and regulated by the Financial Conduct Authority FCA No: 497568

27 February 2014


What do we do?

Social Finance works with government, social ventures and investors to unlock financial barriers and help drive social change.

Change the way government seeks to tackle problems


We create financial structures and implement programmes that bring stable and sustainable funding to organisations dealing with social issues

Help build and support growth of strong, effective social enterprises

Expand the range of investors able to participate in social investment

could social investment help transform health and social care
Despite the scale of spending in these sectors, there remain areas where radical improvement is neededyet traditional financial structures have been unable to effectively meet this need. Could social investment help transform health and social care?
social investment may enable the social sector to scale up
Social investment may enable the Social sector to scale up

Charities and social enterprises are already providing valuable services to the NHS, but these are often small and at the margin of core services.

  • An analysis of a sample of 2012/13 community health contract awards by provider type1 illustrates the issue.
  • Anecdotal evidence suggests that financial barriers remain for third sector providers in winning core service contracts, creating an uneven playing field for these organisations to compete for the larger contracts won by the private sector and NHS Foundation Trusts.
  • Number of contracts won by organisation type
  • Average value of contracts won by organisation type


  • 1 Survey of contracts awarded in 2012/13 identified as with the search term “community health” as detailed on UK health procurement portals (primarily and
  • NB: Primary Care Trusts were abolished March 2013 as part of the NHS reforms. Some of the services which were previously managed by local PCT will be transferred to Clinical Commissioning Groups (CCGs),

social investment can be deployed in different ways

Segmentation is already developing around the role that social investment is asked to perform, the risks that social investors take and the complexity of new models.

Greater complexity / greater impact

Investment in management systems and infrastructure

New delivery models

Whole pathway redesign

Financing for expansion from socially-motivated partners

Support for due diligence rigour

Integration of services

New contract models

some of the areas across health and social care in which we are working today
Some of the areas across health and social care in which we are working today

Social isolation and self-care for long-term health conditions SIB

A SIB to fund scaling of community volunteer resources to support those with long-term health conditions

A SIB to fund enhanced community end-of-life care provision

National expansion of Shared Lives social care

Support for a community health mutual to raise investment in services

Developing a social investment strategy across health and social care for a local authority

A care and wellbeing social investment fund

Better aligning services across health and employment

Working with a group of Almshouses to invest in new extracare housing

example reducing social isolation and loneliness in worcestershire
Example: Reducing social isolation and loneliness in Worcestershire
  • An ageing population, the changing nature of community and family life, and significant NHS and local government budget pressures together require health and social care commissioners to think innovatively about how to help maintain people’s health and develop new models of care.
  • Loneliness and social isolation are now recognised as one of the key determinants of health and well-being among older people but are historically under-invested in and poorly addressed.
  • Social Finance’s analysis suggests that effective programmes to reduce loneliness and isolation can deliver significant value for individuals and the health and care system as a whole.
  • However, previous experience suggest that it can be difficult to design and deliver effective services. Many fail.
  • This is therefore an area where commissioning differently – on the basis of outcomes – could have a significant advantages. A Social Impact Bond could transfer the risk of service implementation to social investors and allow the commissioners to pay only if loneliness is decreased across a population of older adults.

Payments on basis of outcomes


- CCGs, Local authorities, central government



Lead delivery organisation

Outline approach

Reduction in


CBT for most isolated

Peer support groups


Group Activity and Exercise

Reduced loneliness

social finance has undertaken modelling to better assess the costs of loneliness
Social finance has undertaken modelling to better assess the costs of loneliness

Social Finance has modelled some of the short and medium term health and social care value associated with long-term conditions developed as a result of loneliness. Total value will be higher.

example the care and wellbeing fund
EXAMPLE: The care and wellbeing fund
  • Social Finance is developing a £20+m proof of concept social investment fund focused on health and social care – the Care and Wellbeing Fund.
  • Our aim is to serve both a wider range of investors and delivery organisations. Through this we hope to catalyse delivery of impact and financial returns.
  • The Fund’s objective is:
  • ‘To improve health and wellbeing in the UK with particular focus on disadvantaged groups such as the frail elderly, those with a long-term health condition and those with a disability.
  • The Fund aims to support, with investment, the growth of ambitious charities, social enterprises and ventures which deliver improved wellbeing. The focus will be on prevention, early intervention and community-based solutions.’

Investment Strategy

Key Themes

  • Risk capital:
  • to support growth and development of social enterprises and social purpose businesses
  • to generate defined and measurable impact
  • which is a form of repayable funding
  • Ageing and long term conditions
  • Disability
  • Health improvement
  • Health and employment
  • Service innovation
  • A strongly mission-driven fund, seeking to attract socially motivated investment with cornerstone funding from Big Society Capital matched by co-investors
impact framework
Impact framework

The Fund will target specific investment themes and will have a defined framework for assessing and measuring social impact results

Fund Themes

Direct Impacts*

System Impacts*

A. Improved health & wellbeing

e.g. delaying onset of ill-health and recovery from ill-health

B. Reduced health & economic inequalities

e.g. greater access to services and employment for economically disadvantaged groups

C. Greater independence & dignity

e.g. improved feelings of independence, control & life satisfaction

D. Replicable/scalable approach

e.g. scope for widespread adoption

E. Building capacity of local health & social care system

e.g. supports local service integration

F. Improving financial sustainability of health & social care system

e.g. greater value for money than current practice

1. Ageing & Long term conditions

2. Disability

3. Health improvement

4. Health & employment

5. Wider innovation

* We will target investments that meet three of the impact criteria including both direct and system impacts.