Councils to trial new finance tool
Author: James Illman, LGC |
Four councils are to pilot innovative arrangements to fund intensive help for families with complex needs, minister for civil society Nick Hurd has announced.
Up to £40m could be raised by four social impact bond pilots, launched in Hammersmith & Fulham LBC, Westminster and Birmingham city councils and Leicestershire CC, the minister said .
Social impact bonds allow investors and philanthropists to put their money into social projects with the lure of a return if the projects are successful.
The pilot projects will fund intensive help for families blighted by anti-social behaviour, crime, addiction and poor education.
A Cabinet Office statement said: “If they are successful and families are taken out of deprivation and long term dependence on the state the taxpayer will repay the investments with a decent return. If not, then the taxpayer won’t pay.”
Mr Hurd said: “Social impact bonds could be one of many Big Society innovations that will build the new partnerships between the state, communities, businesses and charities and focus resources where they are needed.
“The four local authorities that will pioneer this work are taking a bold and exciting step.”
It is estimated that the public service bill for the 46,000 most deprived families is over £4bn a year, almost £100,000 per family. One example, uncovered by the Local Strategic Partnership ‘Be Birmingham’, revealed that just two crime families cost the taxpayer £37m over four decades.
The pilots are the latest initiative to support prime minister David Cameron’s ambition, set out in December 2010, to try and turn around every troubled family in the country by the end of the parliament.
The new trial will build on a social impact bond pilot to tackle reoffending in Peterborough Prison launched by the Ministry of Justice last September.
Other social impact bond initiatives are being trialled in Liverpool and Essex to support vulnerable adolescents and their families with the objective of preventing care entry.