Labour MP Graham Allen has called for the establishment of a £200m investment fund for charities and other organisations providing early intervention services for vulnerable children.
Allen’s recommendation is contained in a report commissioned by the Prime Minister, David Cameron.
Early Intervention: Smart Investment, Massive Savings, which was published this week, says the £200m should come from private sources and the Big Society Bank.
It would be used to pay delivery costs for early intervention services that are contracted for by local authorities and delivered by voluntary sector providers on payment-by-results contracts.
If charities hit their targets, the fund would get its money back from the local authority.
The initiative would work on a similar basis to social impact bonds, which pay investors a profit if targets are met.
Allen also called for the creation of an Early Intervention Foundation, co-funded by £20m from government and philanthropic sources, to promote the fund and early intervention. However, a government spokesman said today it would not contribute to the foundation.
His report said that 27 local councils were ready to run pilot schemes and that the initiative could begin with £1m pilot schemes in each of these areas.