An £80 million fund to provide payment-by-results contracts for locally developed projects by socially minded investors.
Call out for applications
The Life Chances Fund is now open for expressions of interest (EOIs) in the themes of early years and young people.
Applications can be submitted via an online application platform, which will go live in the coming weeks. In the meantime, you can view the application form and guidance documents for young people and early years on this website.
Send an email to email@example.com to discuss further questions about an application to the Life Chances Fund.
Social Impact Bonds
Social Impact Bonds (SIBs) represent a significant opportunity to reform public services, improve social outcomes and create savings for the taxpayer. To support the growth of this market, government is contributing £80 million to a Life Chances Fund, which will support locally developed projects.
Life Chances Fund
The Life Chances Fund (LCF) is an £80 million top-up fund, whose objective is to help those people in society who face the most significant barriers to leading happy and productive lives. This forms part of the Prime Minister’s life chances approach.
The £80 million has been committed by central government to provide contributions to outcome payments for payment-by-results contracts, which involve socially minded investors - ie towards Social Impact Bonds (SIBs). These contracts must be locally commissioned and aim to tackle complex social problems.
The Life Chances Fund will aim for contributions of around 20% of total outcomes payments, with local commissioners paying for the majority of the outcomes payments. However the level of contribution from the LCF will be refined to reflect the balance in savings that are generated for the wider public sector. Where the rate of savings to central government are relatively low and/or the immediate savings to the local commissioner are very high, levels of contribution will be refined to reflect this.
Based on existing central top-up funds, which have targeted a similar contribution, the LCF could leverage a further £320 million in outcomes payments from local commissioners, creating a total pot of £400 million for outcomes contracts.
The overall objective of the £80 million LCF is to help those people in society who face the most significant barriers to leading happy and productive lives. It will do this by:
- increasing the number and scale of SIBs in England
- making it easier and quicker to set up a SIB
- generating public sector efficiencies by delivering better outcomes and using this to understand how cashable savings are
- increasing social innovation and building a clear evidence base of what works
- increasing the amount of capital available to voluntary, community and social enterprise (VCSE) sector providers to enable them to compete for public sector contracts
- providing better evidence of the effectiveness of the SIB mechanism and the savings that are being accrued
- growing the scale of the social investment market
There is a 2-stage application process for the Life Chances Fund.
When a thematic call out is issued, proposals for SIBs in the relevant policy areas can be submitted for consideration. Applicants are required to submit their proposals via an expression of interest (EOI) and, if successful, a full application.
Please send an email to firstname.lastname@example.org to discuss further questions about the Life Chances Fund application.
Expression of interest
The initial stage of the process will ensure that applicants are clear on what it is they are applying for and how realistic a proposal they are making.
It will ensure applicants meet the fundamental criteria for applying to LCF.
A decision will be taken on each EOI form within 4 weeks (depending upon the volume of applications).
Proposals approved through the EOI submission will be required to complete a full application (FA) with more detailed information regarding the proposal.
Successful applicants will receive an in-principle agreement to fund outcomes and can then enter into commissioning service provision and launch.
From the point of call out, it is expected that it will take a maximum of 9 months for the application process to be completed, and a maximum of a further 3 months for a funding decision to be made. All money should therefore be committed by summer 2018.
Deadlines for applications will be as follows:
|Call out||EOI deadline||EOI decision||FA deadline||FA decision|
|1 to 4 July 2016||30 September 2016||31 October 2016||28 April 2017||31 July 2017|
|2 to 4 January 2017||31 March 2017||30 April 2017||31 October 2017||31 January 2018|
|3 to 5 June 2017||31 July 2017||31 August 2017||30 April 2018||31 July 2018|
All successful projects will be able to draw down money from the fund during this time (or for the duration of their SIB, if shorter). Projects can run beyond 2025, but top-up funding will not be available beyond the lifetime of the fund. We would normally expect all payments to have been claimed 6 months before the closure of the LCF (ie October 2024) or closure of your grant, whichever is the earlier.
This timeframe allows for the logistics of SIB set up and for the longer contracts that are better suited to SIBs (based on previous experience, this can be between 3 and 10 years dependent on policy area). Specifically, this provides sufficient time for cohort referral, programme intervention, and outcomes measurement and payments.