Third Sector Online announces today that Birmingham is one of four pilot authorities chosen to test a Social Impact Bond aimed at supporting “problem families”.
The other local authorities are Westminster, Hammersmith & Fulham, and Leicestershire.
Each council will devise a contract that specifies targets for families, which might include an increase in school attendance, a fall in criminal behaviour or a reduction in drug or alcohol abuse. Charities and social enterprises will then bid for the contracts and find private and social investors to give financial backing. The schemes are due to begin in Spring 2012.
OCS estimates that the four SIBs will require around £40m of working capital during their lifetime. OCS is not, of course, funding these schemes — that is the whole point of the SIB model — but is making up to £300K available to the local authorities to fund technical assistance and other expertise in designing the SIB contracts.