Bonds could fund early intervention

It comes as a major report from charity Action for Children and think-tank New Economics Foundation this week suggested using government bonds to fund preventative work.

The study argues that investing in preventative work to combat problems including crime, mental illness, family breakdown and drug abuse could save the country billions of pounds.

Mark Robertson, spokesman for Ethical Investment Research Service (EIRIS), said: "There is a growing demand for investments that have a low-risk profile and a social aim. Increasingly, charities are looking to invest in line with their mission, and HSBC earlier this year started to issue bond offerings focused on combating HIV in South Africa."

More than 60 per cent of UK ethical funds are managed by clients of EIRIS, which provides independent assessments of companies' social, environmental and ethical policies.

Robertson added: "The government is going to have to make cuts to public services. The more alternative methods of funding that can be set up the better."

Liberal Democrat MP Annette Brooke, member of the Children, Schools and Families Select Committee, told CYP Now that a range of ways of investing in early intervention should be explored.

She said: "We have got to look at all ways of funding because early intervention is so important."

The Action for Children report develops an economic model, which it hopes the Treasury will adopt to fund preventative work.