An £80 million fund to provide payment-by-results contracts for locally developed projects by socially minded investors
Life Chances Fund
The Life Chances Fund (LCF) is an £80 million top-up fund, whose objective is to help those people in society who face the most significant barriers to leading happy and productive lives. This forms part of the Prime Minister’s life chances approach.
The £80 million has been committed by central government to provide contributions to outcome payments for payment-by-results contracts, which involve socially minded investors – ie towards Social Impact Bonds (SIBs). These contracts must be locally commissioned and aim to tackle complex social problems.
The Life Chances Fund will aim for contributions of around 20% of total outcomes payments, with local commissioners paying for the majority of the outcomes payments. However the level of contribution from the LCF will be refined to reflect the balance in savings that are generated for the wider public sector. Where the rate of savings to central government are relatively low and/or the immediate savings to the local commissioner are very high, levels of contribution will be refined to reflect this.
Based on existing central top-up funds, which have targeted a similar contribution, the LCF could leverage a further £320 million in outcomes payments from local commissioners, creating a total pot of £400 million for outcomes contracts.
The overall objective of the £80 million LCF is to help those people in society who face the most significant barriers to leading happy and productive lives. It will do this by:
- increasing the number and scale of SIBs in England
- making it easier and quicker to set up a SIB
- generating public sector efficiencies by delivering better outcomes and using this to understand how cashable savings are
- increasing social innovation and building a clear evidence base of what works
- increasing the amount of capital available to voluntary, community and social enterprise (VCSE) sector providers to enable them to compete for public sector contracts
- providing better evidence of the effectiveness of the SIB mechanism and the savings that are being accrued
- growing the scale of the social investment market
More to click The Life Chances Fund