The UK’s “fragile” social investment market needs to expand and involve more partners, a report is warning.

The warning has been made in a four-year review into the work of Access: The Foundation for Social Investment, which is overseeing the allocation of £87.5m in Dormant Assets funding and was set up a decade ago by the government, National Lottery Community Fund and Better Society Capital.

This review praised its work for investing in charities and social enterprises “who would not otherwise be able to access appropriate finance”.

However, it warned that it is operating in a social investment market “which continues to be jargonistic, niche, technical, fragile and largely unknown”.

Key challenges Access needs to meet to help improve the social investment market include defining long-term sustainability for a system that requires subsidy and mobilising additional capital beyond dormant assets.

It says that additional investment and a wider range of partners is needed to ensure more charities and social enterprises can better access funding.

Making the case for new investment

Access is being called on in the report to “have a national role” to make “the case for new funds and products”.

It suggests the UK government’s creation of the Office for Impact Economy to better coordinate funding for good causes as key to future lobbying efforts.

But it raises concerns that funding sources involved are “unlikely” to include “the grant aspect of blended finance” and “given the economic challenge facing the UK, ministers will likely focus primarily on the potential of ‘big-ticket’ impact investments”.

The report says that “Access will need to keep reminding ministers of its smaller — but high social value - investments in ‘place’ and communities”.

Vaughan Lindsay, chair of the Oversight Trust, which oversees Access and carried out the review, said that its findings confirm “what many across the sector already know: Access has made a difference to charities, social enterprises and the communities they serve”.

Access chief executive Seb Elsworth said that the challenge for the organisation is to "build" on its successes and "mobilise new sources of capital, and ensure this vital ecosystem remains resilient for the long term".

He added: "To meet long‑term demand, we need a broader coalition of funders to recognise the value of community-scale investment.

"Dormant Assets will remain vital, and we will continue advocating for further allocations and for a more stable, long‑term approach."

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