Ever since Social Impact Bonds (SIBs) have been introduced in the UK – the first devised with an intent to reduce recidivism for a Peterborough jail – there have been 10 set up in the country. Essex County Council became the first local authority to commission an SIB to help vulnerable youths.
Social Finance developed the SIB and raised £3.1 million to fund interventions for 11-16 year old youths at risk of going into care, so that they can remain safely at home with their families. The Big Society Capital and Bridges Ventures are the lead investors of this SIB.
The five year program aims to provide “intensive support” to approximately 380 adolescents and their families. The target is to divert 100 adolescents from entering care. The success of this SIB will be measured by the reduction in days spent in the care by adolescents, as well as improved school outcomes, wellbeing, and reduced reoffending. If the interventions are successful, investors’ expected returns range between 8-12% p.a.
Children who enter care typically suffer poorer outcomes than children in the general population: educational attainment would be five times worse, one third are NEET (not in education, employment, or training) at age 19, and a quarter of all prisoners have been in care.
Youths often enter care because of multiple and complex behaviour problems triggered at adolescence which lead to aggression, antisocial behaviour, parental loss of control, family breakdown, and ultimately the lack of desire to continue living with the birth family.
Social Finance reports cost of state care to be expensive, ranging between £150,000 and £180,000 per annum per child in residential care, and £20,000 and £47,000 per annum per child in foster care. The problem is large and growing, both nationally and in Essex.
Essex County Council was the first local authority to award a social impact bond contract, which will start next April.
The Greater London Authority also began a three-year, £5 million SIB program at the beginning of this month to combat homelessness in London, which is carried out by homelessness charities Thames Reach and St Mungo’s, and funded by the Department of Communities and Local Government.
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