Social Impact Bonds for troubled families scheme

The Cabinet Office has announced details of Social Impact Bonds, as part of its campaign to turn around the lives of troubled families. The Bonds are intended to let people invest in social projects to address social issues and be paid a return if the projects are successful. Up to £40million could be raised by four Social Impact Bond pilots in Hammersmith & Fulham, Westminster, Birmingham and Leicestershire.

These would be the first Social Impact Bonds to tackle multiple problems in a family setting. Investors and philanthropists can invest in the bonds, which then fund intensive interventions. If they are successful and families are taken out of deprivation and long term dependence on the state, the taxpayer will repay the investments with a decent return. If not, then the taxpayer won’t pay.

These are part of the national programme for families with multiple problems. The Department’ of Education has an Early Intervention Grant funding stream for early intervention and preventative services, including services for families with multiple problems. They say that the grant is not ring-fenced, which gives local areas the freedom to respond to local needs, drive reform and pool and align funding. Around £2.2 billion will be allocated every year, with every authority receiving an allocation.

The Department for Work & Pensions (DWP) has also announced around £200m of European Social Fund money over the next three years to help families with multiple problems overcome barriers to employment. The new programme will be delivered by private and voluntary sector organisations working with local authorities to identify families and ensure activity is appropriate to the local area. The provision will operate on a payment-by-results basis, with providers rewarded for helping move members of the families they are working with closer to a point where they are ready to apply for work and get a job. The aim will then be to help individuals in those families get into work directly, or through mainstream support such as the Government’s new Work Programme.

epolitix reports that Guardian columnist Polly Toynbee said the Social Impact Bond system were “a kind of PFI” [Private Finance Initiative] and “incredibly complicated”.

She said the social bonds would take money from charities and then “drain off money” to accountants and “the government will have to pay out whatever the results”.

Shadow Cabinet Office minister Tessa Jowell welcomed the government’s interest in the area but said “beneath the headline lies a whole host of unanswered questions”

Private money to fund family scheme

Article from the Guardian’s social affairs editor, Randeep Ramesh, on these proposals is worth a read, questioning the fundamental approch to philanthropic welfare systems.

Could there be profit in such trades? With money tight and few ideological qualms about big business making money from poor people, the present government is inviting companies, charities and social enterprises to lead families out of social dysfunction. So there is £100m from the European Social Fund next year to pay to get these families, gulp, into work in a year. But even rough calculations show it is not enough.

In the US and France, it has become fashionable for billionaires to want to pay more tax to produce social equity. In England, the rich will be tapped to “invest” in problem household bonds. Investors pay a company to get results and take profits if it works. Taxpayers only pay investors if the promised savings materialise. If they don’t, then the rich lose their money. Call it charity. It’s certainly not welfare.

Forget welfare, the poorest people must now rely on ‘charity’

The Guardian reports that Emma Harrison, who is David Cameron’s senior adviser on troubled families, has set up a firm to bid for work under this programme. Its overall aim is to get 120,000 households into work under a scheme that she helped design, despite publicly saying that to make money from the scheme would be a “conflict of interest”, according to documents obtained by the Guardian.

Harrison told the Guardian she withdrew from bidding when the government announced the first tranche of contracts, worth £200m, in February. She said she had accepted the unpaid role but had been “shocked” to learn there would be hundreds of millions of pounds in funding.

However, documents sent to private firms who bid for the work reveal that Harrison’s company had set up in January a “partnership” called Families Unlimited, with a former civil servant who until this year was running the Department for Education’s “support services for families with multiple needs”, to pitch for the cash.

Emma Harrison set up firm to pitch for government cash on project she devised

Have found the document referred to by the Guardian

Families Unlimited A Partnership between A4e and Gill Strachan Limited Supporting DWP Prime Contractors to deliver effective, efficient family support

A4e and Gill Strachan Limited have entered into an innovative joint venture – Families Unlimited - to deliver new services that support the United Kingdom’s most disadvantaged families. Families Unlimited brings together two market leaders, combining their expertise to create a new offer that helps families build sustainable lifestyles and move out of poverty.

A4e will not bid as a Prime Contractor for these services due to a conflict of interest arising from the work of its founder and Chairman, Emma Harrison, through the Working Families Everywhere initiative. However, DWP have advised that no conflict arises where A4e is acting as a subcontractor.

Well that went well then, despite previous claims of 100% success rate in some areas…...

£1.3bn troubled families scheme has had ‘no discernible impact’