The government has launched an £80m fund that will use social impact bonds to help organisations dealing with entrenched social issues.
The Life Chances Fund, which opened for applications yesterday, will contribute to outcome payments for locally commissioned payment-by-results contracts involving social investors.
The Cabinet Office, which is running the fund, expects it will contribute 20 per cent of total outcomes payments, with local commissioners accounting for the other 80 per cent.
It will initially focus on projects related to children’s services and drug and alcohol dependency themes, followed later in the year by four other themes – early years, young people, older people’s services and healthy lives.
Expressions of interest in receiving funding from the first two themes of the Life Chances Fund must be received by 30 September.
The Cabinet Office said it had established a Government Outcomes Lab at the Blavatnik School of Government at Oxford University.
The GO Lab will try to increase understanding of outcomes-based commissioning, including social impact bonds, in the public and voluntary sectors.
Both the Life Chances Fund and the GO Lab are part of the government’s domestic strategy to stimulate demand for social investment in the UK over the next five years, according to a statement from the Cabinet Office.
Rob Wilson, the Minister for Civil Society, said: "I believe that the social impact bond market could be worth £1bn by the end of the parliament.
"This will require continued momentum, and today’s GO Lab and Life Chances Fund announcements will provide the support local commissioners need to use social investment bonds to transform lives.
"This is about central and local government, academia and the voluntary sector all coming together to work at tackling some of the most entrenched social challenges we face."