The government has announced a new social impact bond that it hopes will lead to innovative solutions to tackling unemployment among young people. The £30 million package aims to help improve the prospects of up to 20,000 people.
A social impact bond is a contract with the public sector in which a commitment is made to pay for improved social outcomes, ranging from health care to education. The contracts are awarded on a payment-by-results basis, so investors are only rewarded if the agreed social outcomes are met. The bonds are designed to tackle social issues by harnessing the expertise of charities and social enterprises.
One of the issues around social investment is measuring impact. Last year, Sir Ronald Cohen, chairman of Big Society Capital, described vehicles, such as social impact bonds, as a “breakthrough” because they measure social good as well as financial return.
The new investment is made up of two cross-government programmes specifically targeting those aged between 14 and 24, helping them improve their educational achievements and employability.
The Youth Engagement Fund aims to support up to 18,000 young people across 100 schools. In addition, the Fair Chance Fund is designed to move over 2,000 homeless young people into sustainable accommodation, as well as employment, education or training over three years.
Deputy prime minister Nick Clegg, commented, “Our most vulnerable young people can fell like they’re stuck in a rut and cast aside by society, with no future prospects to help them get the skills, confidence or opportunities they need to succeed.
“Our £30 million package opens up the chance for people to invest in programmes that deliver real results.”
Organisations, charities and their investors will now have a chance to bid for a share of the £30 million pot. The government added that programmes likely to receive funding will include those that reduce the long term dependency of young people on benefits, decrease the likelihood of offending and support a specific group of homeless young adults.
Minister for civil society Nick Hurd said, “Britain is leading the world in using innovative finance models to tackle social problems and transform people’s lives. Through social impact bonds we are opening up resources to communities, businesses and charities to help change the lives of vulnerable people.”
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