The New Horizons project, designed by GMCP, is designed to support young people in areas including remaining in education or finding work. It will be managed by Triodos Bank and will involve GMCP and several local charities as providers.
The project is one of a six new payment-by-results schemes that were launched in January with the backing of the Department for Work and Pensions’ £30m Innovations Fund, set up to attract private investment to tackle the problems faced by disadvantaged young people.
At least two of the six will use the social impact bond model, including this new scheme, which has been funded by a number of social investors.
They will receive payment of up to 12 per cent a year if the New Horizons project succeeds in achieving a number of outcomes, including encouraging young people to remain in education, placing young people in training courses and placing them in jobs for 26 weeks. If the charities fail to hit those targets, the investors could make a loss, or potentially receive nothing.
Kieran Gordon, chief executive of GMCP, said: "The opportunity to tap into private investment from socially minded investors has enabled GMCP to develop and deliver innovative solutions for some of the most disadvantaged young people in our area.
"The partnership formed with Triodos Bank and, through Triodos, the relationship we have built with investors, is an exciting and, we hope, a productive one in realising common goals."