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Preventing Costs Before They Happen in Havering - The Social Investment Bond

The problem

The idea

Havering’s aim is to transform our services for children and families to prioritise prevention and early intervention. The highest proportion of our spend is on reactive and specialist services that address severe needs. We want to move to a preventive model that will enable us to stop the escalation of needs as soon as possible, thereby improving outcomes for children and saving money on specialist services. Making the transition to a preventive model is a challenge facing many local authorities. We need to be able to invest in prevention and early intervention whilst still spending what we need to on specialist statutory services. As we build our preventive services we will need to spend less on statutory services – a virtuous cycle will be created – but until we start to see the dividends from prevention the challenge is how to kick start the cycle.

Our idea is to use a Social Investment Bond in order to unlock the potential of prevention. The bonds provide an opportunity to invest in services that make a social impact and will only be repayable contingent on the targeted outcome being achieved. This reduces the level of risk for the local authority. We will work with 4Children to obtain a Social Impact Bond which will enable us to invest in a model of services for children and families that is built on prevention and early intervention and change the balance between prevention and reaction much quicker than would be possible otherwise.

What we need

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London Borough of Havering