Policy and Politics
The City is urged to invest in early intervention
Work and Pensions secretary Iain Duncan Smith has called on banks to help fund early intervention.
At a conference on the subject last week, Mr Duncan Smith, who commissioned an independent review into early intervention led by MP Graham Allen, told bankers it was a real opportunity for investment which would yield a financial return.
He called on the financial sector to help the coalition Government to transform the way early intervention is funded and transform society at the same time.
'In both good times and bad, successive Governments have shown too little willingness to engage with fundraisng instruments other than taxation,' he said.
He suggested that a similar scheme to the work the Ministry of Justice is doing on social impact bonds, using private finance to reduce rates of reoffending, could be appled to early intervention.
In this case, if the rate of reoffending drops by more than 7.5 per cent within six years, investors will receive a payment representing a proportion of the cost of reoffending.
'The answers for early intervention may not be the same - but they need to follow the same principles. If investors put money in now to reduce Government expenditure down the line, then some of the savings could be used to reward those who invest,' he said.
