Photo: Joe-Anderson-Mayor-of-Liverpool

Liverpool launches first fund for social enterprises

23 January 2014

by Richard Forster

The UK city of Liverpool has launched a new pilot fund of £2 million to boost local charities and social enterprise.

The fund, financed by social investor, the Social Investment Business, and the European Regional Development Fund, will be the first Local Impact Fund to be launched in the UK that will offer business support and finance to local charities and social enterprises.

“We know that there is demand from social enterprises for funding to support expansion plans and we also know that securing funding from banks and other sources is both difficult and expensive,” a spokesperson for the Mayor of Liverpool told Cities Today. “A revolving fund that enables social enterprises to expand and create jobs is thus a good idea and something Liverpool is pleased to support.”

The Liverpool scheme will provide loans to startups and established organisations looking to expand with unsecured loans of £50,000 to £250,000 for up to five years. Fund managers will assess each investment individually and decide on interest rate levels dependent on risk and the expected social and economic impact of the investment. The fund will provide an on-going cycle of support as once loans are paid the money will be lent to new organisations.

Other UK cities, including Manchester and Leeds, are in talks to set-up their own local fund.

Sir Stephen Bubb, Chair of the Social Investment Business
Sir Stephen Bubb, Chair of the Social Investment Business

“We believe that about 15 to 20 Local Enterprise Partnerships will want to launch a Local Impact Fund by 2016, and we are already recruiting our next wave of partners,” said Sir Stephen Bubb, Chair of the Social Investment Business.

Liverpool and Liverpool City Region have already committed to invest a further £3 million of European Regional Development Fund monies for the next phase, provided the pilot achieves the success and outcomes expected. A first evaluation will take place towards the end of 2014.

“Local Impact Funds are not a government initiative to deliver local services,” said Bubb, when asked whether city councils risked losing some of their authority as the funds ‘take on public services’. “They should help, however, stimulate innovation and sustainable economic growth in some of the most deprived parts of the country.”

Similarly the Mayor of Liverpool’s spokesperson was adamant that the funds are not conflictive with the council’s own responsibilities. “Indeed it [the fund] complements it, so we see no risk that this could delegitimise councils,” he added.

Charities and social enterprises will be able to apply for investment from the Liverpool pilot fund from the website from 1 April this year, with the first investments to be agreed mid-year.

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