Impact bonds tackle rough sleeping

HomelessPrivate investors are helping to protect vulnerable teenagers and rough sleepers under a scheme set up to tackle social problems while cutting demands on the state.

The Government has announced two new projects are being funded by social impact bonds, where social enterprises cover the upfront costs for a return on their cash if the initiatives are a success.

Ministers also announced that a £20 million fund is being set up to help simplify the way successful bonds are paid.

Prime Minister David Cameron said: "Britain is a world leader in using finance to help grow a bigger, stronger society.

"By providing new forms of finance to invest in more early intervention programmes we can help the most vulnerable and reduce demands on the state."

London Mayor Boris Johnson and charities St Mungo's and ThamesReach have developed a project to help around 800 rough sleepers in the city.

Mr Johnson said: "I am determined to halt the persistent problem of rough sleeping in London, and while we have made great strides in cutting the number of entrenched rough sleepers there is still much more to do.

"This complex issue requires innovative solutions, and our social impact bond is a good opportunity to encourage philanthropists and the private sector to help deliver a vital public service."

In Essex a social impact bond is backing a five-year programme to give intensive support to around 380 young people at risk of entering care. More than £3 million was raised from social investors, including Big Society Capital and Bridges Ventures, to fund the project. They will receive a return of up to 12% a year if it is deemed a success.

Essex County Council leader Peter Martin said: "I am proud that Essex has had the vision to progress with a new social care model to deliver improved services and support for our most vulnerable young people."
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