UK launches first local authority social impact bond
One of the UK’s pioneer social investors and the world’s first social investment bank have joined forces to fund a new Social Impact Bond (SIB) to help vulnerable young people at risk of going into care.
Bridges Ventures and Big Society Capital today announced they are lead investors in the bond commissioned by Essex County Council and developed by Social Finance.
The Essex SIB, the first local authority SIB in the UK, will fund a £3.1m, five-year programme that will deliver intensive support to 380 vulnerable adolescents and their families through Multi-Systematic Therapy (MST).
MST, an evidence-based programme with a 30-year international track record, delivers family therapy focusing on improving parenting and rebuilding positive relationships so that families can manage future crisis situations.
Adolescents are the single largest age group within looked after children overall in the UK and life chances for children who enter state care are typically bleak. A quarter of all prisoners have been in care compared with 2% of the population overall and one third of previously looked after children are NEET (not in education, employment or training) at age 19.
The programme, run under a payment-by-results contract, will be managed by Social Finance and delivered by Action for Children, one of the UK’s largest children’s charities.
Bridges Social Entrepreneurs Fund and Big Society Capital will be investing alongside other social investors.
The Bridges Social Entrepreneurs Fund is already leading investments in three payment-by-results programmes under the Department of Work & Pensions’ Innovation Fund – set up to support disadvantaged young people improve their education, employment and training outcomes.
Big Society Capital has announced investment commitments of £37m since its launch in April, including a £10m commitment for a Results Fund to enable social sector organisations to compete for payment- by-results contracts.
Antony Ross, head of Bridges Social Entrepreneurs Fund, said: ‘The MST programme has a track record of delivering real benefits to vulnerable children and the Social Impact Bond mechanism will enable Essex to pilot this level of targeted intervention. We are delighted to be a cornerstone investor supporting the authority’s first SIB-funded intervention.’
Nick O’Donohoe, CEO of Big Society Capital, said: ‘The launch of this SIB by Essex County Council is a major breakthrough and shows the potential for the development of the market in social investment. We hope that Essex will pave the way for other local authorities to follow.’