Investment from big banks and other private firms in “Social Impact Bonds” could save taxpayers £22bn and revolutionise public services, a new report Capital Investment has said.
These bonds encourage social enterprises to come up with ideas to address social problems. The government identifies the cost of the problems, and investors front the cash to solve them.
Tory London Assembly member James Cleverly, the report’s author, said: “A charity has a new proven idea to cut drug use and prevent the most vulnerable from becoming addicts. The government calculates the long-term costs of drug addiction on society. An investor who believes in the charity’s new … idea provides the needed funds, and the government agrees to give a portion of the savings to the investor, if the outcomes are met.
“If we could treat even half the UK’s drug users, we could save about £22bn over their lifetimes.”