The first social impact bond focused on early intervention to prevent young people becoming neet (not in education, employment or training) has exceeded its GCSE results target by more than 80 per cent.
Big Society Capital and Impetus - the Private Equity Foundation each invested £450,000 in the ThinkForward programme (delivered by charity Tomorrow’s People), working in East London with 350 young people each year who are in danger of becoming neet.
The target this year was for over 30 per cent of these ‘low-attainers’ to attain five A*-C GCSEs, and last week’s results saw 55 per cent of the group achieve this goal - 83 per cent higher than the target.
In the social impact bond model, social investors take all of the financial risk, and if it is successful the Department for Work and Pensions (DWP) will pay back their investment with a small return.
Aim of £88,000 saving per student
The ThinkForward programme aims to save the taxpayer over £88,800 per young person. This is calculated by comparing the maximum cost to the DWP per student to the estimated lifetime cost of neets to the country.
Each individual will cost DWP no more than £8,200 over five years, whereas the department estimates that each neet youngster will cost the UK £97,000 during his or her lifetime (£45,000 in resource costs and £52,000 in public finance costs).
Educational outcomes are measured throughout the five-year programme (attainment, behaviour and attendance) with the goal of preventing at least 80 per cent of them from becoming neet.
The ThinkForward programme is currently operating in ten schools across the London boroughs of Tower Hamlets, Hackney and Islington, with coaches giving potential neets ongoing support to increase their chances of success. Tomorrow's People will be entering two further schools in September.
Big Society Capital: ‘Results show programme’s success’
Nick O’Donohoe, CEO of Big Society Capital, called the GCSE results “an encouraging indicator of how effective this programme is at supporting some of our most vulnerable young people into education and training”.
He said: “The model allows charities to deliver innovative preventative programmes that can deliver significant social benefits and cost savings, with social investors such as us taking the financial risk and government only paying if it works.
“The success of the programme will mean that we will then be able to reinvest the money so that this, and similar programmes, can be scaled up.”
Second neet bond also exceeds targets
Early figures from a second neet-prevention social impact bond, being delivered in Merseyside by Triodos New Horizons, has also recorded encouraging results.
Working with young people with issues such as learning disabilities, youth offending and living in care, the programme has exceeded both its own targets. Twenty-four per cent of the students achieved five A*-C GCSEs from a target of 5 per cent, and a further 46 per cent gained one or more Level 1 qualification out of a target of 35 per cent.
