Ten 'social impact bonds' worth up to £54m launched

18 Oct 2017 News

Ten outcomes contracts worth up to £54m have been agreed between charities and central and local government, the minister for civil society has announced today.

The contracts have been launched using cash from the first tranche of funding from the £80m Life Chances Fund, which is intended to match fund social impact bonds and other outcomes contracts at local authorities, and is delivered by the Big Lottery Fund on behalf of the Department for Digital, Culture, Media and Sport.

The government describes all ten contracts as social impact bonds, and says they are dependent on securing local social investors. However social finance experts familiar with the Life Chances Fund said that in practice it may not be necessary for them to meet the definition of a SIB.

SIBs are a type of payment-by-result contract in which a social investor backs a charity or other organisation to deliver a given outcome. A public funder agrees to pay cash if charities deliver, but if the project does not hit its targets, the investor bears the loss.

DCMS has not given details of the social investors who will underwrite the ten schemes, or how long they will run for, or what outcomes targets must be hit in order to trigger payments.

Altogether, £16.4m of outcomes payments are being provided through the Life Chances Fund. Another £37.6m is being contributed by 36 different local authorities.

The level of DCMS contribution is higher than was originally projected at the start of the Life Chances project. DCMS originally targeted a subsidy level of 20 per cent, but is now expecting that it will provide a third of all funding.

In the largest project, the Family Drug and Alcohol Court will get up to £6.05m to work with the family court system to support families whose children are subject to care proceedings due to parental substance misuse and domestic violence in the home.

East Midlands Children’s Services Social Investment Platform will receive up to £3m for the delivery of new services that support challenging young people aged 10-17 who are either in care or at risk of entering care.

And Integrated Family Support will receive up to £1.89m to fund the work it will carry out with families to reduce child safeguarding concerns associated with drug and alcohol use among parents.

Tracey Crouch, minister for sport and civil society, said: “This funding will benefit some of the most vulnerable people in society and provide vital support to help them transform their lives. The UK is a world leader in using social impact bonds to make a positive impact in society and these projects will achieve real results in communities across the country.”

 

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