Social impact bonds are a useful new tool for public service delivery, and the Government is keen to see more of them. The Cabinet Office is promoting the development of more social impact bonds in central and local government.
The Ministry of Justice launched the world's first social impact bond in 2010, aiming to reduce reoffending among short-sentence prisoners released from Peterborough prison. The return for investors will depend on the degree of success in reducing reconvictions, up to an overall cap of around £8 million. The results for the first cohort will be known in 2014. The Department for Work and Pensions is supporting further social impact bonds under its Innovation Fund, targeting disadvantaged young people and those at risk of disadvantage. Six social investment projects have so far been selected for support. The available funding is up to £30 million over three years from 2012.