Homeless agencies cautious on Social Impact Investment scheme
Private investors to fund, bear risk and take ultimate responsibility for social projects
Homeless agencies have given a cautious welcome to the Social Impact Investing scheme announced in the budget, which will focus initially on housing projects. Photograph: Susana Vera/Reuters
Homeless agencies have given a cautious welcome to the Social Impact Investing scheme announced in the budget, which will focus initially on housing projects.
Under the scheme, private investors provide the money and bear the risk as well as taking ultimate responsibility for the performance of social projects. The State would then repay the investor once a series of specified outcomes are achieved successfully.
The pilot phase of the scheme is seeking private sector investment partners to provide long-term stable homes for homeless families in the Dublin region with the aim that more than 130 such families will move from private emergency accommodation into sustainable long-term tenancies.
During his speech in the Dáil on Tuesday, Minister for Public Expenditure and Reform Brendan Howlin described the measure, which is part of an overall reform of public service provision, as “radical and reforming” .
However, she cautioned: “We would be concerned that, down the line there might be a move away from investing in much-needed social services and a focus on paying back investors,” adding that the State has responsibilities in this area which are set out clearly in legislation.
“We need to make sure that the Government remains a key player in this area,” she said.
Pat Doyle, chief executive of homeless support organisation the Peter McVerry Trust, also gave a cautious welcome to the scheme, but said further information was required, particularly as to how the scheme would be funded, the returns that private finance investors would expect, the amount of funding that will be available to charities and the risks charities will have to bear.
“In the UK there are a number of similar schemes in operation and they have proved to be extremely arduous and complex to set up, with investors in London receiving a return of 6.5 per cent if targets are met.
“Those schemes are in the very early stages, and very few results or lessons have been gleaned from them. We look forward to meeting with the Minister for Housing and Planning to learn more about the proposed pilot,” Mr Doyle said.