The voluntary sector's Early Action Task Force has criticised the Cabinet Office’s decision to allocate some of the £28m Futurebuilders repayment money to the Social Outcomes Fund, which is only open to government and other commissioning bodies.

The £20m Social Outcomes Fund was launched by the Cabinet Office to support “intelligent commissioning” of public services. Government departments, local councils and other commissioning bodies in England can apply to the Fund to help them deliver innovative services.

Applications to the fund must involve payment by results and ideally be financed by a Social Impact Bond. Applications at expression of interest stage can be submitted by any group, but final applications must be submitted by commissioners. They must also deal with a social issue that affects multiple parts of the public sector, be based in and of benefit to an area within England, only require a minor proportion of funding from government top-up funds and agree to publish data on savings, money generated and effectiveness of the intervention.

An example would be a bid from a local authority for top-up payments to allow them to introduce a SIB to improve outcomes for troubled families by providing up front funding to a charity to carry out a project.

David Robinson, chair of Community Links and a member of the Task Force, said the government was wrong to divert the money away from the sector.

"We welcomed the establishment of the Social Outcomes Fund because investment in early action often results in cross-departmental savings," he said.

"However, although the savings may not accrue to a single department or local public agency, they do benefit government as a whole. The Fund should therefore either be directly financed by the Treasury or funded by contributions from each benefiting department. 
 
"The Futurebuilders fund was designated for the third sector. The repayment pot has been aquired as the funded programmes have delivered on their promises and returned the loans. This money should now be redirected towards a new third sector programme dedicated to early action.

"In time it too would benefit the public purse but taking this money out of the sector now and giving it exclusively to other government agencies effectively punishes the sector for success." 

The Cabinet Office is due to publish an update on its social investment strategy today, which will include news of two new social impact bonds partly funded by the Social Outcomes Fund.