Vulnerable Children

Local authorities are currently being asked to make significant savings in children’s services. In this environment, the public sector struggles to find the funds for early interventions aimed at improving future outcomes (which would reduce the need for acute services in the long-term). Preventative services are difficult to fund for two main reasons: firstly, there are a great many demands on increasingly tight public sector budgets. Reducing funding from acute services, such as residential care placements for those with complex needs, to pay for prevention work would be controversial. Secondly, prevention services are often perceived as financially risky, since their impact is sometimes difficult to predict.

Social Impact Bonds provide a way of financing the upfront investment required in the provision of preventative interventions in children’s services. Public sector payments are only made once the outcomes and savings are achieved. Some possible areas of intervention that a Social Impact Bond could fund include:

• Adolescent Intensive Intervention: The provision of interventions targeted at young people with complex needs and their families, aimed at reducing family breakdown and consequent entry into care;
• Making better use of adoption: The provision of interventions that enables better adoption performance and provides better support to adoptive parents.

Social Finance is currently undertaking a number of feasibility studies in conjunction with Local Authorities. These studies will assess the potential of Social Impact Bonds to fund preventative and early intervention services which improve outcomes for children and generate cost savings for Local Authorities.