Private investors asked to help poor UK families

Private investors are being asked to help some of the country's most deprived families escape the poverty trap, potentially saving the taxpayer millions and earning themselves a profit. Ministers want philanthropists, charities and other help groups to buy "social impact bonds" as part of Prime Minister David Cameron's Big Society idea.
Launching the scheme on Friday, Civil Society minister Nick Hurd called it a bold innovation that could throw serious resources at social issues. He said the bonds supported Cameron's ambition, set out last December, of trying to turn around every troubled family in the country by the end of the current parliament.
Under the scheme, investors are to be paid a dividend for every successful initiative that targets problems ranging from anti-social behaviour, crime, addiction and poor education - issues that have blighted inner-cities for years. Returns will be paid out of the public purse, but taxpayers won't pay up if they fail, the government said.
They will be judged a success if families are lifted out of poverty and their long-term dependence on state benefits stopped, part of the Big Society goal of giving more responsibility to individuals and communities rather than the government. Four pilot projects earmarked for Hammersmith-Fulham and Westminster in London as well as Birmingham and Leicestershire, will be up and running by early next year and could raise up to 40 million pounds. Britain has estimated the annual bill for helping the country's 46,000 most dysfunctional and impoverished families at more than 4 billion pounds, an equivalent of almost 100,000 pounds per family.
Research by a local strategic partnership in Birmingham found that just two problem families in the city cost the taxpayer 37 million pounds over four decades. The launch comes two weeks after some of the worst riots in decades tore through English inner cities, prompting calls for the government to urgently tackle the root cause of the unrest, which many commentators say stems from urban decay.
In an interview with Reuters on Friday, former Conservative deputy prime minister Michael Heseltine said there were no quick fixes to the riots but that more had to be done to allow deprived inner cities to help themselves. Children's Minister Tim Loughton said that early family intervention can help young people turn around their lives when their family circumstances are intensively targeted.
Speaking of the bonds, he added: "This is also a more efficient way for local authorities to work, as evidence shows that fewer children are taken into care or excluded from school. Using Social Impact Bonds will raise additional money to be directed at helping more families."