Minister for the Cabinet Office Francis Maude has called on charities, social enterprises and funders to put impact measurement at the heart of their activities, stating that ‘charities aren’t being handed anything’ and are having to compete for contracts and capital.

The minister, who was speaking at NPC and Third Sector’s Impact Conference, also criticised ‘risk averse’ commissioners and accused them of stifling innovation and preventing the opening up of public services.

He used his speech to announce plans to support the further development of Social Impact Bonds (SIBs).

He said: "Firstly, we are exploring an ‘Outcomes Finance Fund’ to make it easier for public bodies to issue payment-by-results contracts and social impact bonds for charities.

"The fund will serve as a top-up in instances when a public body wants to run a payment-by-results contract that would save money for a range of public bodies, but could not justify using its own budget to set it up.

"Secondly, we are developing a SIB ‘Centre of Excellence’ to provide practical advice and support to SIB developers. More details of both these initiatives will be announced later this year."

In the question and answer session after his speech Maude floated the idea of financing the suggested outcomes fund by top slicing budgets.

The Minister went on to say that this week the Cabinet Office and UK Trade & Investment are leading a delegation of social entrepreneurs and investors to the United States.

The trade mission aims to open up a dialogue between US and UK policymakers, investors and entrepreneurs, who will discuss barriers to and opportunities for developing the global social investment marketplace.

Dan Corry, chief executive of NPC, said: "Francis Maude clearly understands the importance of impact measurement and we welcome his support, for example for the Inspiring Impact initiative and its work to get more charities doing impact measurement.

"NPC’s Making an Impact report found that whilst the majority of charities are doing more evaluation work a quarter do not evaluate their impact, so there is clearly still a lot of work to do.

"As the Minister said, Governments have always praised the third sector but often fallen short when it comes to taking action to support and develop our work.

"As the need for the work of charities is greater than ever we hope that these promises of support are made good, enabling the sector to be resilient and help as many people as it can."

To coincide with the conference NPC has today released its Making an Impact report, the first representative study of impact measurement amongst UK charities.

According to the report 75 per cent of charities say they measure the impact of their work and nearly three quarters (74 per cent) of these have invested more in measuring results over the last five years.

Making an impact also finds that over half of respondents (52 per cent) measuring impact say they have increased their measurement efforts in order to meet funder requirements.

Only one in twenty (5 per cent) state service improvement as their main motivation.

Yet one in four (25 per cent) report improved services as the main perceived benefit of impact measurement.

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