Private money to fund family scheme

Private investors are being asked to fund a new government programme to help families blighted by crime, addiction and poverty. Social bond schemes, in which private investors plough money to projects to tackle social deprivation and are paid if they are successful, are being piloted in four local authorities. Ministers want philanthropists, charities and other organisations to contribute to the projects for 120,000 families to reduce the teen pregnancy rate, cut the number of days their children spend in care and lower the number of visits to hospital accident and emergency wards. Investors who contribute to the "social impact bond" will in return be paid a dividend for any successful projects. The government expects to raise up to £40m across four pilot schemes which are expected to be running early next year in Birmingham, Hammersmith and Fulham, Leicestershire and Westminster. The selected areas contain more than 6,000 "troubled families", leading such chaotic lives that taxpayers currently contribute more than £100,000 a year per family. 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. Announcing the trial, minister for civil society, Nick Hurd said: "We must not be afraid to do things differently to end the pointless cycle of crime and deprivation which wrecks communities and drains state services. "Social Impact Bonds could open serious resources to tackle social problems in new and innovative ways." Hurd continued: "We want to restore a stronger sense of responsibility across our society and to give people working on the frontline the power and resource they need to do their jobs properly. "Social Impact Bonds could be one of many Big Society innovations that will build the new partnerships between the state, communities, businesses and charities and focus resources where they are needed." However, speaking to Radio 4’s Today programme, Guardian columnist Polly Toynbee said the system were "a kind of PFI" 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". Jowell said: "The devil is in the detail - what criteria will be applied to financial backers? How will the government ensure they are serious about tackling these problems long term? What indicators will be used to judge the success of these projects and how will government ensure the payment by results model doesn't just allow providers to cherry pick members of the target group who are the easiest to help? "We have seen too much hot air about the 'big society' to take such initiatives purely at face value." The announcement of the scheme came after prime minister David Cameron set out an ambition to try and turn around every troubled family in the country by the end of the present Parliament. Social Impact Bonds were advocated by Labour MP Graham Allen in a report commissioned by the government into early years intervention.