Essex council has confirmed plans to use social impact bonds to fund intensive and community-based work with families and children on the edge of care or custody.
The authority is the first council to receive government support for social impact bonds – recommended by MP Graham Allen in his report on early intervention – and plans to use them to reduce the number of looked-after children in Essex.
In a statement, Essex council said it hoped the bonds would attract socially motivated private investors who will receive a return on their investment only if a programme reaches its target.
Following a feasibility study, the authority found the bonds could be used to fund intensive multi-systemic therapy (MST) work with families with complex needs.
In the first year of the planned programme, MST teams will work with 170 children, aiming to reducing looked-after numbers by a further 90.
For every £1 spent on MST the council will save £4, because the ratio of investing in the therapy compared with the cost of a care placement is 4:1.
Peter Martin, the leader of Essex council, said the bonds will strengthen families’ capacity to cope and avoid children having to enter care or custody.
“Family intervention demonstrates that with support lives can be turned around, in Essex we want to be able to provide that support and commitment for our most vulnerable families,” he said.
Nick Hurd, minister for civil society, said: “The Cabinet Office will continue to work with other councils who have begun work in this area and we hope this will act as a model for even more authorities to consider social impact bonds as a way of raising finance to unlock better service delivery for their residents.”
Social impact bonds for families launched