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Charities paid for results

May 11 2014
New scheme to help homeless young people into housing and employment or training skewed towards larger organisations

The UK government has launched a scheme to pay organisations for helping homeless young people into housing and employment or training – but only once they deliver results worth a minimum of half a million pounds.

The relevant government department has set aside £15 million for its ‘Fair Chance Fund’, which aims to help upwards of 2,500 homeless young people, and to “develop and strengthen the capacity of the social investment market” in the homelessness arena.

That means charities and other organisations must first find the money for their project from philanthropists or so-called ‘social investors’ who are willing to take a bet on the organisation’s ability to deliver. Once successful results have been demonstrated, the government will pay up and the investors will get their money back – and potentially make a profit.

The scheme has a ‘price plan’ for the desired outcomes. There is £700 on offer for getting a young person into accommodation; a further £6,000 if they stay there for a year; £5,100 for completing an NVQ level 3 qualification; and £6,000 for holding down a full-time job for a year.

That means most schemes will have to successfully help at least 50 people, with outcomes worth on average £10,000 for each young person, in order to reach the £500,000 minimum threshold and be eligible for the Fair Chance Fund. For the government to hit its target of helping 2,500 young people, the payments will have to average £6,000 each – implying a minimum of 83 clients per project.

In a Q&A document published in mid-April, the government acknowledged that some small organisations 'operate well below the minimum grant level' and encouraged organisations 'to partner with others to deliver a wider range and support and services'.

One worker at a large London organisation which helps homeless young people told The Pavement that small charities would be shut out. “It’s skewed towards big organisations with a structure in place already,” she said.

Others are critical of the pay-by-results approach, which has been controversial in the past.

Our source said an excessive focus on measureable targets “can lead to a culture that’s not healthy for young people".

“Social investors could get cold feet part-way through a project,” she added. "But local authorities have a real vested interest in getting these results.”

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