Big Society Capital has given a community interest company a £1m loan to invest in community organisations set up to support people who receive personal care budgets.
Personal care budgets are given to some vulnerable people by local authorities to enable them to purchase their own care and support.
The social investment bank has awarded the loan to Developing Empowering Resources in Communities to set up seven programmes covering 3,000 people who are eligible to receive statutory social support so they can access services more cheaply.
The programme aims to address the fact that support for people in their homes has fallen in the past five years, leaving an estimated one million people without help, BSC said.
Local authority care services respond to crisis rather than providing support to prevent vulnerable people reaching crisis point, BSC said.
Under the new programme, there will be four schemes in Leeds, one in Sandwell, Birmingham, one in Belfast, and one in Medway, Kent.
Deric has estimated that if the scheme was rolled out across the UK potential savings could reach more than £1bn and would increase the scale and quality of care. The CIC is looking to raise further funds for investment in similar projects over the next five years.
Deric aims to provide support for at least 60 per cent of those eligible for support over the next three years. In addition to those people, a further 1,500 who are not eligible for statutory support, but who are identified as needing support, will be helped by the loan.
BSC said Deric would be providing expertise to and investing in community organisations set up to support people who receive personal budgets.
As part of the programme, ‘community supporters’ – local, trained volunteers – will also provide support to people receiving personal budgets.
Nick O'Donohoe, chief executive of BSC, said the savings would come from the fact that the community organisations would be using volunteers to provide services such as home visits.
"These community organisations deliver a care service that is paid for by people using part of their personal care budgets," he said. "The savings for local authorities come from the organisations being able to use volunteers rather than professionals to deliver the service."
Richard Brazil, programme manager of Deric, said: "Engaging with the community has meant that vulnerable older people have become much more valued and local people who are community supporters – trained and supported volunteers – have been able to use their involvement to develop further their expertise and skills, which will be of real use to them in other settings or opportunities."