Social Innovation In Britain Governments

david cameron

David Cameron, Britain's Conservative prime minister (2010-2016) spoke of his vision for a “Big Society” to “help finance social enterprises, charities and voluntary groups through intermediaries [to]… open up public services to new providers like charities, social enterprises and private companies so we get more innovation, diversity and responsiveness to public need”. This approach to public-private partnerships is commonly known as ‘social innovation’.

Whilst previous decades had seen the contracting out of the delivery of public services to businesses and non-profit groups in order to cut costs, the idea of ‘social innovation’ is to not only save money, but to transform the way public services are provided, by tapping the ingenuity of people in the private sector, especially social entrepreneurs who develop innovative answers to a social problem such as poverty or climate change.

Tony Blair creating the ‘Office of the Third Sector’ (OTS) to work with non-profit groups in the 1990s. However, the OTS often seemed more concerned with giving voice to the concerns of the charity establishment than with supporting ideas of social entrepreneurs. The office was re-branded in 2010 as the ‘Office of Civil Society’ by Mr Cameron and with the creation of a new business form, the ‘Public Interest Company’, has given British social entrepreneurs greater flexibility in using the profit motive to scale up social innovations.


The British government had experimented with social-innovation funds in previous years. In 2000 Tony Blair established a Social Investment Taskforce, but it was left to the next government led by David Cameron to implement recommendations, including using money in long-dormant bank accounts to capitalise a “social investment bank”.The Big Society Bank was established in 2012 with £600m of assets to invest.

Tax breaks and legal amendments have made investing easier with organisations created such as ‘ClearlySo’ who provide capital raising and advisory services to help investors discover innovative opportunities to make social and financial returns. They also manage investor relationships with leading institutional investors.

social impact bonds

‘Social impact bonds’ transfer risk to non-profit private capital markets and costs public money only if the scheme provides specific social benefits. If set output targets of a non-profit organisation are met, the investors will receive a return on their investment. If output targets are not met, there is no return. At launch, there was concern that social impact bonds would not be able to attract enough profit-seeking money to make a real difference. One success has been ‘Community equity shares’ to the very people who will benefit socially, environmentally, and economically from the activities of the issuing organization. This has led to renewable energy projects, shops, local food schemes, sports clubs, and other local enterprise initiatives.

‘The Global Impact Investing Network’ is another of Britain’s not-for-profit organizations dedicated to increasing the scale and effectiveness of impact investing with the intention to generate measurable social and environmental impact alongside a financial return.

The biggest obstacle in Britain has been the inertia of the bureaucratic, rule-bound public sector. The Young Foundation, working to create a more equal and fair society, work with the public and private sectors and civil society to empower people to lead happier and more meaningful lives. They have proposed that every government agency should be required to put one percent of its budget into innovation funds.

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