Housing minister Grant Shapps and London Mayor Boris Johnson have today launched a £5m payment-by-results scheme to help London’s most persistent rough sleepers.

The new fund is being described as a social impact bond and will deal specifically with persistent rough sleepers, half of whom come from overseas and who are often facing multiple challenges such as drug, alcohol or mental health problems.

A spokesman said that the department of communities and local government will pay charities who deliver services within the bond on a payment-by-results basis.

The criteria they will be measured against include reducing the proportion of regular rough sleepers returning to London’s streets; reducing admissions to hospital accident and emergency units; and increasing the number of rough sleepers moved into settled accommodation and employment.

The fund is to be administered by the Greater London Authority.