Homelessness organisation St Mungo’s and alcohol and drug service Foundation66 have teamed up for a payment-by-results contract worth a potential £376,000.

London Councils has awarded the two charities the 18-month Target project, funded by the European Social Fund, to help around 300 people across the capital towards and into jobs.

People who are in treatment for drug and alcohol problems will complete accredited training and a two to four-week work placement. Job coaching and peer support will be offered with the aim of getting participants into full-time employment.

A spokesman for London Councils told civilsociety.co.uk that the first payment is made upfront at the start of the contract, which represents 15 per cent of the overall funding allocated (so £56,400). The 15 per cent is effectively a float – payments are made quarterly based on results, and in the last three quarters payments are reduced to recoup the costs of this start-up float.

"Thereafter payment is judged against results," the spokesman said. "Organisations send in their evidence quarterly to us and payments are then made judged against this evidence.

"In the Foundation66/St Mungo’s case, a payment will be made for the first 6,000 users supported and thereafter, when targets have been met for sustained job starts and putting people into active job training."

Rod Cullen, St Mungo’s group manager for Skills and Employment, told civilsociety.co.uk that measurements of success of the Target project include sustaining employment for 26 weeks, progression into education or training and completing work or volunteering placement.

He added: “We are really pleased to be working with Foundation66 on this joint programme. We have respect for each other’s work and, as we complement each other geographically, have the scale to work as a pan-London project.

"We also bring slightly different expertise, with ours in homelessness and substance use and theirs in detox and substance use. Our services are also slightly different from each other which gives clients a wider catalogue of services to take advantage of.”

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