The government is to invest an additional £80m over the next four years to encourage the creation of further social impact bonds, the Chancellor said today.
Social impact bonds require investors pay up front for projects that help tackle social problems, and then receive payments based on the results achieved. They have been used by charities such as ThinkForward to help fund its youth unemployment scheme.
In his speech to the Commons, George Osborne said the government would provide "£20m a year of new support for social impact bonds".
The £80m investment over four years would take the total spending on social impact bonds to £105m across government over the course of this parliament, the Cabinet Office said in a statement. It added that the bonds would be used to help tackle issues including homelessness, mental health and youth unemployment.
Andrew Levitt, investment director at the social investor Bridges Ventures, said in a statement: "Outcomes-based contracts enable government to pay directly for the successful delivery of better social outcomes for some of the most disadvantaged people in our society.
"So this commitment of an extra £80m will make a massive difference to the lives of at-risk children, the homeless, the chronically ill and others who are already benefiting from these programmes."