Essex County Council is to finance family and community-based work with young people on the edge of care or custody with Social Impact Bonds. Essex is the first council to launch a bond funded programme. This form of funding is being pioneered by the Ministry of Justice in Peterborough prison.
Social Impact Bonds provide up front funding for prevention and early intervention services, and remove the risk from the public sector that interventions do not deliver outcomes. The public sector pays if the intervention is successful. In this way, Social Impact Bonds enable a re-allocation of risk between the two sectors.
Essex will use the bonds to fund a number of Multi-Systemic Therapy teams to work across the county. Multi-Systemic Therapy is an intensive treatment programme that focuses on families with complex needs – the programme works intensively with the whole family and all that surrounds it; homes, schools, neighbourhoods and friends aiming to keep the family together and provide a range of support where needed.
In the first year the MST programme will work with 170 Essex children, with the aim of reducing care numbers by a further 90. The cost of investing in MST compared with the cost of a care placement is 4:1, so for every £1 spent on MST, Essex County Council saves £4.
Leicestershire county council are considering Social Impact Bond schemes involving one-to-one support to improve discipline and parenting skills in families where the parent has lost control and in exercise classes, to tackle obesity. Other Social Impact Bond schemes are being considered by Birmingham, Liverpool, Westminster and Hammersmith and Fulham councils. A new Health Impact Fund, similar to social impact bonds, has been launched to provide capital for NHS workers who want to launch a service that the NHS budget cannot support. Social Impact Bond are also being developed in Australia, Canada and the United States.
Social Impact Bonds align closely with Community Budgets and they have the potential to shape the re-modeling of public services. This form of funding can be used at neighbourhood and whole place levels. Early intervention has been shown to improve outcomes at a lower cost and Social Impact Bonds are an innovative way of attracting new investment around an outcomes-based contract that benefits individuals and communities.