As place-shapers, regulators, commissioners of services and large employers, local authorities have a mission to promote the economic and social well-being of their communities. They will need to pay much more attention to sustain and grow their tax base as budgets become increasingly self-financing. Many authorities have also developed sophisticated asset management and investment strategies to generate income that can fund core services. But these are conventional investments not socially-motivated impact investments. Are they missing an opportunity here?

New research published by Power to Change, the independent trust supporting community businesses in England, conducted by Social Finance, a not-for-profit social investment intermediary, shows that relatively inexpensive funds for investment do exist and can be used by enlightened councils seeking to deliver financial and social or environmental returns to benefit local communities.