The £30 million Innovation Fund, developed by the Department for Work and Pensions, supports programmes that re-engage disadvantaged young people aged 16 to 24 in education or training, to improve their employability and reduce their longer-term dependency on benefits. The funding is provided through social impact bonds (SIBs). SIBs are a payment by results system where private investors fund innovative projects, often through charities and social enterprises, to prevent young people from becoming NEET (not in education, employment or training). The government then only pays out to the investors if the projects are successful.
Building on the success of the Innovation Fund, the Cabinet Office, Ministry of Justice and Department for Work and Pensions have developed a £16 million Youth Engagement Fund to fund social impact bonds that aim to preventing young people from becoming NEET.
The Youth Engagement Fund will open for initial applications in July. Read the Youth Engagement Fund prospectus to learn about its aims, structure and high level bidding process.
ThinkForward: success through the Innovation Fund
The ThinkForward programme is 1 of 10 social impact bonds around the country that is funded through the Innovation Fund. The charity Tomorrow’s People, working for ThinkForward, has put highly trained coaches in East London schools where they identify and support 14 to 17 year olds at risk of becoming NEET. Coaches provide a single point of contact for the young people for tailored, personal guidance and effective connections to employment opportunities.
Early results are promising; Tahiduz, a participant, overcame considerable personal adversity to become a star student and run for Young Mayor in his borough. He went on to win the Impetus Private Equity Foundation Young Person of the Year Award in 2013, and through ThinkForward he completed work experience at Kings College London. After his A Levels he plans to study medicine and become a surgeon.
ThinkForward is funded by investors including Impetus-Private Equity Foundation and Big Society Capital. The Innovation Fund repays investors if, and only if, the programme achieves the agreed education and employment outcomes for the young people. These outcomes include young people improving their behaviour and attendance at school, achieving qualifications and finding sustained work.
Charlie Green, Impetus-Private Equity Foundation Trustee says:
ThinkForward guides and supports young people at risk of dropping out as they navigate the often challenging journey through school and into their first job. One key to the programme’s success is building bridges between the often separate worlds of education and the workplace.
Once the programme’s impact is proven, we believe it has the potential to improve the prospects of disadvantaged school leavers nationwide.
Kevin Munday, Programme Development Manager at ThinkForward says:
Big Society Capital’s imaginative investment in ThinkForward is helping a generation of young people who are struggling to make a successful move from education into employment. The support that our coaches offer young people could not be delivered without the working capital they provide.
But Big Society Capital is more than just an investor to us. Not only do they contribute their expertise to govern and support the programme but, through our partnership, they have also made particular efforts to develop a rigorous and sustainable model for social investment.