Graham Allen MP produced a report commissioned by the Prime Minister, to tackle problems blighting deprived families through early years intervention. It concluded that by investing in early intervention would result in massive savings which would reduce criminal activities, teen pregnancy, poor education, and alcohol & substance abuse. The report proposed Social Impact Bonds to fund and implement the interventions alongside other projects.
Social Impact Bonds enable philanthropists and investors to fund intensive social intervention initiatives, to help deprived and affected families. If the initiatives are successful i.e. if the families are taken off long term dependence on state benefits and support, the taxpayer will repay the funds back to the investors. If however the initiatives are unsuccessful then the taxpayer keeps the investment.
We want a stronger sense of responsibility across our society and to give people working on the frontline the power and resource they need to do their jobs properly. 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. - Nick Hurd, Minister for Civil SocietyThe bonds will be trialled in Hammersmith & Fulham, Westminster, Birmingham, and Leicestershire and it has been estimated that they will raise £40 million. However, whilst the principle is fairly simple, it could prove challenging given that estimates for the public service bill for 46,000 of the most deprived families is over £4 billion per year. Yet the bonds are part of the government's statements of commitment to supporting the growth of the Social Investment Market. It is anticipated that the bonds will start investing in interventionist schemes as early as Spring 2012.
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