The investment comes in the form of two cross-government programmes – the Youth Engagement Fund and the Fair Chance Fund – that charities and other organisations can bid for to fund projects designed to help vulnerable 14- to 24-year-olds gain employment.
However, both funds will be delivered through social impact bonds (SIBs), a payment-by-results system, which means the government will only pay out if the initiatives are proved to be successful.
Research published last week by charity umbrella body the National Council for Voluntary Organisations found the amount of working capital required to deliver contracts tendered under payment-by-results made bidding too great a risk for many children's charities.
But Daniela Barone Soares, chief executive of philanthropic organisation Impetus-Pef, said the use of SIBs will engage more charities.
She said: “As more investors are showing interest in SIBs, it follows that charities and social enterprises want to be responsive.
“The real challenge here is for the charities to focus everything they do on meaningful and sustainable outcomes – that is, where the young people they work with are either learning or earning.
“We believe the social investment market will thrive only when funders and commissioners demand such outcomes and when charities and social enterprises are delivering those very outcomes.”
The £16m Youth Engagement Fund, jointly provided by the Cabinet Office, Department for Work and Pensions and Ministry of Justice, will be used to help 18,000 disadvantaged 14- to 17-year-olds improve their skills and employability in schools.
The Fair Chance Fund, jointly funded by the Cabinet Office and Department for Communities and Local Communities, is designed to support more than 2,000 homeless 18- to 24-year-olds over the next three years. This £15m fund will be used by specialist organisations to help homeless Neet young people into sustainable accommodation.
Announcing the funds, Clegg said: “Our most vulnerable young people can feel like they’re stuck in a rut and cast aside by society, with no future prospects to help them get the skills, confidence or opportunities they need to succeed.
“Our £30m package opens up the chance for people to invest in programmes that deliver real results.
“Helping all our young people get back on track needs innovation so that we can prevent young people from falling out of education, employment or training.”
