Britain not only spends too much money from government but it has significant problems in health spending and adoption. This new bond is a very intelligent approach to helping save money while also providing a better service for both government and particularly children who can have a better quality of life with foster parents.
Baker Tilly and a consortium of 18 charities have launched a national social impact bond scheme to help hard-to-place children in local authority care find permanent adoptive homes.
The social impact bond, which expects to raise £2m so far from Big Society Capital and Bridges Ventures, will fund the ‘It’s All About Me Scheme’. Through the scheme, local authorities can use a network of 18 voluntary adoption agencies to support the adoption of hard-to-place children.
Each local authority will pay around £54,000 per child for the service, around half the amount it would cost to keep a child in care over the same two-year period.
The expected £2m in social investment provided by Big Society Capital and Bridges Ventures will be used as non-recourse loans to the voluntary adoption charities. This will be repaid from payments by the local authority in four instalments – at registration, at placement, after one year, and after two years.
If the placement fails before the next instalment is due, no further repayments will be made.
Investors will receive a 4 per cent per annum return, with the potential for greater returns if the adoption placements are successful. The social impact bond is for a ten-year period.