Financing for Society: Assessing the Suitability of Crowdfunding for the Public Sector

Abstract

In what follows, we offer the first systematic study to assess the suitability of investment-based crowdfunding for the public sector. Our research engaged six public sector case studies along with external partners to evaluate the economic, legal, political, and technical potential of crowdfunding as an additional form of finance for public sector infrastructure projects. The UK has a long tradition of using private sector finance to fund public sector infrastructure projects such as: bridges and tunnels, hospitals, housing, prisons, rail, roads, and schools. The NHS has a long tradition of using private finance and, as it is unable to borrow money in the same way as other public bodies, this trend appears set to remain. So, as the UK crowdfunding sector continues to grow and to mature, we wanted to use our research to: • help overcome existing knowledge barriers; • test whether or not crowdfunding could offer better value to the public sector; and to • assess if the internal capacity required to develop crowdfunding for the public sector could be minimised so that it mirrored that for the PWLB, or via PPP project finance, as common sources of public sector funding. To achieve this, it was vital that our research to assess the suitability of crowdfunding directly engaged and collaborated with public sector bodies in order to generate a robust evidence base of case studies for others to draw upon