The Cabinet Office has today launched a new £20m fund which will support the creation of up to 20 social impact bonds, as London and Essex announce their first social impact bonds.
Launching the Social Outcomes Finance Fund in Whitehall today, minister for the Cabinet Office, Francis Maude, said the government was putting its weight behind social impact bonds. “The Fund will provide top-up contributions which will make it easier for public bodies to issue social impact bonds,” he said.
It is hoped that the fund will enable better collaboration between public sector commissioners tackling complex issues across multiple departments.
Maude said along with public commissioners, the Fund will take expressions of interest from charities and social enterprises which recognise that they need payment from different parts of the public sector.
The Fund will aim to leverage in at least £60m of social investment
Along with the launch of the Fund, Essex and London today announced their first social impact bonds.
Essex bond for vulnerable youth
Social Finance and Action for Children have been awarded a contract by Essex County Council to deliver a social impact bond for vulnerable young people.
The Essex social impact bond will fund a five year programme, run by Action for Children, which will provide intensive support to 380 young people and their families.
Social Finance has raised £3.1m in investment for the social impact bond. If targets agreed with Essex County Council are met, investors might expect returns in the range of 8 – 12 per cent a year. If targets are not met, investors will lose all their money.
Investors into the social impact bond include Big Society Capital, Bridges Ventures and the Charities Aid Foundation.
The social impact bond will be funding multi-systemic therapy (MST), which delivers family therapy in the home by therapists. It focuses on improving parenting and rebuilding positive relationships so that families can mange future crisis situations.
Dame Clare Tickell, chief executive of Action for Children, said: “Programmes such as MST have delivered proven results. Stable funding from the social impact bond allows us to work with Essex County Council over the longer term to produce real results that will benefit children, families and communities.”
The programme will start next April.
Essex County Council is the first local authority to award a social impact bond contract.
The Mayor of London has also launched a social impact bond which will see St Mungo’s and ThamesReach support around 800 rough sleepers in London.
The London Homelessness SIB, commissioned by the Greater London Authority with funding provided by DCLG, began operations on 1st November 2012 and will run for 3 years