A new report from the think tank recommends a blended finance fund to attract funding for the Local Government Pension Scheme and a social impact bond.
A new report from global think tank Milken Institute responds to the challenge posed by the need to invest in national health prevention infrastructure while also funding existing spending priorities within the NHS.
The report proposes two financing mechanisms to channel additional capital into community-level preventative services: a blended finance fund to attract Local Government Pension Scheme funding, using business relief to attract additional private capital, and a social impact bond to provide an initial proof of concept.
The think tank calls its proposals “starting points” to inform policy conversations on how to ensure the long-term sustainability of the NHS.
“Investing in prevention improves individual health and makes economic sense,” said Simon Radford, director of policy and programming at the Milken Institute and one of the report authors.
Solving multiple ambitions at the same time
The report argues that the establishment of a prevention fund, structured as a blended finance fund, would leverage government resources and philanthropic capital to attract additional investment from local government pension pools seeking both financial returns and positive social impact.
By mobilising local government pension money, the government would solve multiple ambitions at the same time. First, it would meet the challenge outlined in the chancellor’s recent Mansion House speech for pension money to invest more both in the UK and into infrastructure. Second, it would help stem the flow of patients into the NHS. And third, it would temper the growing social care bill that is putting pressure on local council finances.
It would do this while providing returns for local government pension fund beneficiaries.
“While this report focuses on the UK context, we hope that this pathbreaking work will hold lessons for health systems globally,” added Esther Krofah, executive vice president of Milken Institute Health.
“Health systems around the world are wrestling with how to fund both the treatment of a growing incidence of chronic disease while also finding ways to finance effective, long-term investment in prevention to reverse this trend,” she added.
