The council had previously said it was considering taking out loans to fund the expansion of its multi-systemic therapy teams who work with children and families.
But in an announcement today (7 February), the authority revealed it is planning to attract private investment through the use of social impact bonds – where investors only receive a financial return on their investment if the programme hits its target.
The council has already completed the feasibility stage of the programme working with Social Finance Ltd, which showed that social impact bonds could be used to provide intensive treatment to adolescents on the edge of care.
Leader of Essex council Peter Martin said: "Social impact bonds will strengthen families’ own capacity to cope and avoid young people having to enter care or custody in the first place.
"We want young people in Essex to have the best start in life, intervention with families before they reach breaking point can help us ensure more children in Essex get the chance to live their life with the same hopes, fears and opportunities we want for our own children."
In the first year of the multi-systemic therapy programme in Essex, the council will work with 170 children, with the aim of reducing care numbers by 90. The council already reduced the number of children in care by 95 between November 2010 and January 2011.
The ratio of investing in intensive therapy compared with the cost of a care placement is 4:1, so for every £1 spent Essex County Council hopes to save £4.
