A new social impact bond (SIB) launched in Manchester gives investors an opportunity to support a programme funding foster placements for vulnerable children.
The project, which has been commissioned by Manchester City Council and will be run by charity Action for Children, will find specialist foster placements for young people living in residential care homes.
The foster carers will be trained to provide multi-dimensional treatment foster care (MTFC), which helps young people with challenging emotional and behavioural difficulties move back into family settings.
Councillor Shelia Newman, executive member of children’s services at Manchester City Council, said, “All the evidence suggests that foster care is the best option for the majority of children and young people who need care – although some children will continue to need to live in residential placements.
“However, some young people who go into residential care do so because there isn’t the right type of specialist foster care available for them. Multi-dimensional treatment foster care seeks to address this.”
SIBs raise private funds in order to support public services that provide a social impact. The public contracts are awarded on a payment-by result basis. This means investors will only see a return if the agreed social outcomes are met but there is a growing interest in the area and many SIBs have been successful.
The five-year programme is funded by the Bridges Social Impact Bond Fund, which will provide £1.2 million of working capital. If the social targets are met investors will receive a return from the council out of the savings it has made. The councils adds that a successful programme will result in “social benefits, savings for the local authority and a return for investors”.
Action for Children already runs a MTFC service in Hampshire and the results suggest that the project in Manchester will have a positive impact on the children’s lives. The young people that completed the three to five month programme in Hampshire showed a 94% reduction in offending and 96% were in education, employment of training.
SIBs are set up to provide support for a wide range of social challenges. One in Peterborough has been trialling a new method of rehabilitating offenders. In November last year, the project reported that since launch there has been a 12% decrease in the number of short-term sentence prisoners who had been reconvicted, compared to an 11% increase nationally.
In order to address the growing demand for investment in charities a new platform has been launched to allow organisations to raise medium-term debt through bonds listed on the London Stock Exchange.
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