Seven new Social Impact Bond investment schemes aim to support social entrepreneurs and help to reform public services. The UK now has more Social Impact Bonds (SIBs) than the rest of the world put together.
SIBs are a form of social investment where private investors provide the capital to address complex social problems. It is a payment by results system. Investors fund innovative interventions and the government only pays if these interventions succeed in, for example, helping young people get back into education.
Youth Engagement Fund SIBs
The Youth Engagement Fund will fund 4 new SIBs, supporting up to 8,000 disadvantaged young people to improve educational qualifications and secure employment. The YEF aims to find new ways to address the challenges facing disadvantaged young people. It includes £10 million from the Cabinet Office, £5 million from the Department of Work and Pensions and £1 million from the Ministry of Justice.
The YEF has been awarded through a competitive bidding process and the 4 winning bidders are:
- Unlocking Potential Ltd: working with up to 4,040 young people with behavioural, mental health or wellbeing issues aged 14 to 17 in Greater Merseyside
- Prevista Ltd: working with up to 1,000 young people aged 14 to 17 in London, 70% of whom will be gang members, ex-offenders/at risk of offending, in care/care leavers, and those with high levels of school absence
- Futureshapers Sheffield Ltd: working with up to 1,319 young people aged 14 to 17 in Sheffield who have poor attendance at or have been excluded from school, who have experience in the youth justice system, are ‘looked after’, have special educational needs or disability, or are teen parents
- Teens and Toddlers Youth Engagement LLP: working with up to 1,680 young people aged 14 to 17 years in Greater Manchester who are in care/edge of care, have a history of offending/at risk of offending and/or other risky behaviour (eg drugs/teen pregnancy), have behavioural or mental health issues and are truanting
Social Outcomes Fund (SIBs)
The Social Outcomes Fund will provide £2.5 million to support 3 additional SIBs to help people with long term health conditions, mental illness and children in care. The Cabinet Office set up the £20 million Social Outcomes Fund to provide a ‘top-up’ contribution to outcomes based commissions (social impact bonds or payment by results) that aim to deal with complex and expensive social issues.
In the North East, £1 million will support a social impact bond for social prescribing to support 8,000 people with long term health conditions such as lung disease, diabetes and asthma. Developed by Newcastle West Clinical Commissioning Group in collaboration with Ways to Wellness Ltd, social prescribing aims to improve the health and wellbeing of individuals while reducing the overall burden on local health care services.
Just over £1.3 million will support a social impact bond to help 2,250 people with severe mental illness into employment. People who sign up to the programme will get tailored support to help them find and maintain a new job through Social Finance, a leading social investment intermediary.
A SIB with support of £188,000 will help children at the edge of care. Evidence Based Social Investments Ltd has developed a new model for local authorities to easily access social investment to support using Multisystemic Therapy (MST) and Family Functional Therapy (FFT). Both MST and FFT provide intensive support to enable adoption and foster care placements to be successful.
Minister for Civil Society Rob Wilson said:
As part of our long term economic plan this government is committed to supporting charities and social enterprises to access the finance that they need to do more.
By working together across government and creating social impact bonds we can confront complex issues – whether it is chronic health conditions or youth unemployment – and save money in the long term as well as improving the quality of life for tens of thousands of people throughout the UK.
Work and Pensions Secretary, Iain Duncan Smith said:
I believe that social investment stands to make the single most significant difference to how government funds and delivers social programmes.
By focusing on outcomes, it means money is only spent on programmes that deliver what they say they will – whether that’s improving educational or employment outcomes, reducing reoffending, or tackling addiction. Transforming the lives of some of the most disadvantaged in our society.
We have already seen some remarkable results – and I’m delighted that today we are announcing this expansion.
Justice Minister Andrew Selous said:
Helping young people succeed in education and gain the skills they need to find work is vital in keeping them away from the criminal justice system.
This is why we are supporting the Youth Engagement Fund to provide further opportunities for young people from disadvantaged backgrounds.