Details of how the £16m Youth Engagement Fund, announced earlier this month by Deputy Prime Minister Nick Clegg, feature in a prospectus document for potential investors and service providers.
The payment-by-results fund will look to improve the job and education prospects of 18,000 14- to 17-year-olds at risk of becoming Neet.
According to the government, young people who are Neet are 20 times more likely to be convicted of a crime.
The fund, which will also focus on children with mental health problems, looked-after children, and teenage parents, will be open for initial applications from July.
Shortlisted bidders will then be invited to submit full proposals in the autumn, with a final decision set to be made early next year.
The prospectus reveals that, depending on the quality of the bids, between four and 10 contracts will be awarded for the three-year project.
The £16m fund equates to £889 per person, but the government expects successful contacts to find additional funding from “at least one other source,” according to the funding prospectus.
The prospectus adds: “This could be from schools/academies, local authorities or others interested in supporting projects that improve outcomes for young people.”
The prospectus also suggests that police commissioners and clinical commissioning groups could provide additional funding.
The funding prospectus also reveals the government is looking to test a variety of payment-by-results models, including social impact bonds. “The need to test different models may be a factor in the final selection of bids,” it adds.
The government wants Youth Engagement Fund proposals to come from social investment partnerships – made up of one or more investor, one or more delivery body (potentially from the voluntary, community or social enterprise sector) and one or more “co-commissioner”, a local body that contributes financially to the project.
Kevin Munday is an investment director for Think Forward, a Neet project in East London that has been developed by Impetus – The Private Equity Foundation and run by the charity Tomorrow’s People as part of the Department for Work and Pensions’ payment-by-results-based Innovation Fund.
He says the Youth Engagement Fund is broadly similar to the Innovation Fund in structure and hopes it has a similar focus on ensuring outcomes and desired results are clear.
“For this new fund to be successful there needs to be a clear link between the payments and outcomes, which has been done very well with the Innovation Fund, for example in improving attendance,” he said.
Lottie Dexter, director of the Million Jobs campaign, said the Youth Engagement Fund must not repeat the experience of another unemployment payment-by-results initiative – the Work Programme – which was criticised by small charities for not providing enough funding.
She said: “We need a system that learns from the pitfalls of the Work Programme and ensures that smaller and voluntary sector organisations can compete for contracts, and receive a good chunk of the payment up front.”
She also called for the Youth Engagement Fund to ensure funding is targeted at those who are in the greatest need of support and includes mentoring involving “inspirational community or enterprise leaders”.