Triodos Bank and Greater Merseyside Connexions Partnership (GMCP) have won a £4.5m DWP Innovation Fund payment-by-results contract to help support young people in Merseyside who may be unemployed or at risk of unemployment.
Triodos Bank’s corporate finance team acted as lead adviser on the deal and in partnership with GMCP raised £2m of funding for the programme in the form of a social impact bond from a syndicate of UK social investors, including Big Society Capital which invested £500,000.
The programme, New Horizons, aims to improve educational, training and ultimately employment outcomes for 3,900 young people, many of whom will be young offenders, have learning disabilities, or be in or leaving care.
Minister for employment, Chris Grayling said: “The first round of Innovation Fund contracts we have awarded should offer a win-win solution, whereby private sector funding will allow us to test out innovative social programmes which are targeted at the most vulnerable. We’re delighted to see ethical financiers like Triodos working in partnership with credible delivery organisations like GMCP to have the greatest impact on communities in Merseyside”.
The Innovation Fund is a newly-launched DWP initiative aimed at encouraging social service delivery organisations, financial intermediaries and private sector investors to work together to design and finance programmes which can help improve employment outcomes for the most vulnerable young people in society. The DWP acts as main contractor and guarantor of a payment-by-results contract. Unlike typical social service delivery, the funding is provided at risk by private sector social investors, who only achieve a financial return if pre-agreed educational, training and employment outcomes are met.
Triodos Bank is one of six preferred bidders in the first round of the Innovation Fund. The Private Equity Foundation (PEF), which was the first organisation to get funding from Big Society Capital, is also a preferred bidder. PEF received £1m from Big Society Capital to help set up a social impact bond working with young people.
