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25 August 2011
Last updated at 19:44 ET
Private investors are being asked to fund a new government drive to help families blighted by crime and poverty.
Ministers want philanthropists, charities and other groups to put cash into "social impact bonds".
It is hoped a trial of the scheme in Hammersmith and Fulham and Westminster in London, as well as Birmingham and Leicestershire, could raise up to £40m.
It aims to help break the cycle of deprivation, without costing the taxpayer any more money.
The government has put the annual bill for assisting the UK's 46,000 most deprived families at more than £4bn a year, representing an average of nearly £100,000 per family.
They are often affected by multiple issues, such as poor education and drug or alcohol addiction, and ministers are concerned the current focus on treating the problems of individuals creates a costly cycle of deprivation, which they find almost impossible to break.
It is hoped the use of social impact bonds, where investors get paid a return for successful projects, can intensively tackle several problems in a family setting.
Announcing the trial, expected to be up and running next year, Civil Society Minister Nick Hurd, said: "We must not be afraid to do things differently to end the pointless cycle of crime and deprivation which wrecks communities and drains state services.
Continue reading the main story Case study: The cost of crime
In Birmingham, one of the trial areas announced by the government, an investigation uncovered two crime families in the city had cost taxpayers £37m over four decades.
Rival gangs, the Burger Bar Boys and the Johnson Crew, became notorious over the murder of teenagers Letisha Shakespeare and Charlene Ellis, in 2003.
Members indulged in petty street crime at first, but, as they moved into the city's growing drugs market, gang violence and gun crime flared up, causing misery for many families.
The Be Birmingham group put the cost of investigating a murder or attempted murder at £1.4m.
Since then, Birmingham City Council has been working to tackle the problem, and it hopes social impact bonds will help ensure the next generation is steered away from joining gangs a young age, as an alternative to a life of crime which costs society and the taxpayer dearly.
"Social impact bonds could open serious resources to tackle social problems in new and innovative ways."
Mr Hurd went on: "We want to restore a stronger sense of responsibility across our society and to give people working on the front line the power and resource they need to do their jobs properly.
"Social impact bonds could be one of many Big Society innovations that will build the new partnerships between the state, communities, businesses and charities and focus resources where they are needed."
The announcement came after Prime Minister David Cameron set a target to "turn around" every troubled family in the country by the end of the current parliament.
Social impact bonds, based on the theory that early intervention can help stop more serious problems later on, are already being used to tackle reoffending in Peterborough Prison.
Children's Minister Sarah Teather, said: "Family intervention demonstrates that the lives of children and young people can be turned around.
"At the same time this is a more efficient way for local authorities to work, as fewer children are excluded from school or taken into care, and this means money can be reinvested in helping more families."
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Ministers want philanthropists, charities and other groups to put cash into "social impact bonds".
It is hoped a trial of the scheme in Hammersmith and Fulham and Westminster in London, as well as Birmingham and Leicestershire, could raise up to £40m.
It aims to help break the cycle of deprivation, without costing the taxpayer any more money.
The government has put the annual bill for assisting the UK's 46,000 most deprived families at more than £4bn a year, representing an average of nearly £100,000 per family.
They are often affected by multiple issues, such as poor education and drug or alcohol addiction, and ministers are concerned the current focus on treating the problems of individuals creates a costly cycle of deprivation, which they find almost impossible to break.
It is hoped the use of social impact bonds, where investors get paid a return for successful projects, can intensively tackle several problems in a family setting.
Announcing the trial, expected to be up and running next year, Civil Society Minister Nick Hurd, said: "We must not be afraid to do things differently to end the pointless cycle of crime and deprivation which wrecks communities and drains state services.
Continue reading the main story Case study: The cost of crime
In Birmingham, one of the trial areas announced by the government, an investigation uncovered two crime families in the city had cost taxpayers £37m over four decades.
Rival gangs, the Burger Bar Boys and the Johnson Crew, became notorious over the murder of teenagers Letisha Shakespeare and Charlene Ellis, in 2003.
Members indulged in petty street crime at first, but, as they moved into the city's growing drugs market, gang violence and gun crime flared up, causing misery for many families.
The Be Birmingham group put the cost of investigating a murder or attempted murder at £1.4m.
Since then, Birmingham City Council has been working to tackle the problem, and it hopes social impact bonds will help ensure the next generation is steered away from joining gangs a young age, as an alternative to a life of crime which costs society and the taxpayer dearly.
"Social impact bonds could open serious resources to tackle social problems in new and innovative ways."
Mr Hurd went on: "We want to restore a stronger sense of responsibility across our society and to give people working on the front line the power and resource they need to do their jobs properly.
"Social impact bonds could be one of many Big Society innovations that will build the new partnerships between the state, communities, businesses and charities and focus resources where they are needed."
The announcement came after Prime Minister David Cameron set a target to "turn around" every troubled family in the country by the end of the current parliament.
Social impact bonds, based on the theory that early intervention can help stop more serious problems later on, are already being used to tackle reoffending in Peterborough Prison.
Children's Minister Sarah Teather, said: "Family intervention demonstrates that the lives of children and young people can be turned around.
"At the same time this is a more efficient way for local authorities to work, as fewer children are excluded from school or taken into care, and this means money can be reinvested in helping more families."
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