Developer of the Big Society Bank says a specific government fund would allow more bonds to be set up
Sir Ronald Cohen, who has helped to develop the Big Society Bank, has asked the government to allocate between £250m and £300m to government departments and local authorities to fund social impact bonds.
The bonds allow investors to provide cash for charities to carry out early interventions in fields such as crime reduction, drugs and childcare. If the charities are successful in reducing the number of people needing government support, their investors are repaid at a profit by the government.
Social impact bonds are currently being piloted in a £5m project to reduce reoffending at HM Prison Peterborough.
This week, Cohen told a meeting of the All-Party Parliamentary Group on Civil Society and Volunteering that he had suggested to the government it should set aside between £250m and £300m to support social impact bonds.
"We'd originally thought to raise £12m for the first social impact bond," he said. "One reason that we only raised £5m was that there was no allocation for it in the department's budget."
He said that if the government allocated a pot of money specifically to be spent on early intervention projects, which could be accessed by several government departments, it would make it easier to put bonds together in future.