Social impact bonds could provide a lifeline for cash-strapped housing providers, says Alastair Graham
Making a dent
In a climate of cuts and reform, the impetus is on housing providers to look for new ways to bring in investment and meet the needs of those we seek to support.
A number of charities have embraced the social investment market in the past year, as they have realised that a reliance on public sector grants is no longer an option for sustainable growth in this market.
For housing charities in particular, a social investment bond offers an exciting option, as it enables an organisation to raise money on a scale that donations and grants simply would not allow.
Golden Lane Housing has just received funding from the Big Lottery Fund, which will enable us to launch a £30 million investment bond early next year. We are a national housing charity, not registered with the Homes and Communities Agency, and as the housing arm of Mencap, we specialise in housing people with a learning disability. We have been looking for innovative ways to address the shortage of suitable accommodation for people with a learning disability, many of whom struggle to compete on the open market.
We will use the finance from the bond to invest in homes for people with a learning disability. Being able to purchase property in this way, rather than renting, will mean that we can meet the needs of those who for example, need longer term security than we could provide through leasing, or need adaptations to their homes which landlords would not allow.
We want this social investment bond to inform other housing providers working in health and social care, who require high capital investment and property assets to deliver services to those in need.
The next few months are a crucial period for us to develop key details ahead of launch, to ensure that our social investment bond is attractive not only to charitable investors, but also mainstream investors who are interested in a solid commercial return as well as social impact.
We are looking to share our learnings within the sector, both ahead of, and after launch early next year.
Alastair Graham is director of Golden Lane Housing