THE ADOLESCENT CARE SITR FUND - Amazon Web …...THE ADOLESCENT CARE SITR FUND 4 All third party trademarks and trade names are hereby acknowledged. IMPORTANT NOTICE This Information

The Adolescent Care SITR FundApproved by Innvotec Limited which is authorised and regulated by the Financial Conduct Authority (FCA register number 122365)

INFORMATION MEMORANDUM

Social Investment Tax Relief (SITR)

THE ADOLESCENT CARE SITR FUND

MANAGED BY INNVOTEC

An investment opportunity offering Social Investment Tax Relief. Real social impact by providing support and wellbeing services to adolescents in

Local Authority Care.

“HELPING TO GIVE A VOICE, SUPPORT,

STABILITY AND HOPE TO YOUNG PEOPLE”

INFORMATION MEMORANDUM FOR THE ADOLESCENT CARE SITR FUND

Innvotec Limited is authorised and regulated by the Financial Conduct Authority as a small authorised UK Alternative Investment Fund Manager (FRN 122365)

Investment into the Fund is only for Applicable Investors defined as (1) professional clients, (2) retail clients who confirm that in relation to an investment in the Fund they have received regulated investment advice or investment management services from an authorised person, (3) retail clients who are venture capital or corporate finance contacts (4) retail clients who self-certify or are certified as sophisticated investors, (5) retail clients who are certified as high net worth investors or (6) retail clients who certify that they have not invested and will not invest more than 10% of their net investible assets in non-readily realisable securities.

THE ADOLESCENT CARE SITR FUND MANAGED BY INNVOTEC

In collaboration with Young London Today

An investment opportunity offering Social Investment Tax Relief. Real social impact by providing support and wellbeing services to adolescents in

Local Authority Care.


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All third party trademarks and trade names are hereby acknowledged.

IMPORTANT NOTICE

This Information Memorandum contains information relating to investment in the Adolescent Care SITR Fund (“the Fund”) that will comprise a Portfolio of investment via SITR Qualifying unsecured loans in Community Interest Companies (“CICs”) together with the Adolescent Care CICs.

It is dated February 2018 and constitutes a financial promotion pursuant to Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) and is both issued and approved by Innvotec Limited (“Innvotec” or the “Fund Manager”), which is authorised and regulated by the Financial Conduct Authority (the “FCA”) to carry on investment business in the United Kingdom as a Small Authorised UK Alternative Investment Fund Manager.

This document describes the arrangements by which Investors who wish to make loans to SITR Qualifying Companies appoint Innvotec to act as their common discretionary investment fund manager and to manage the loans made on their behalf.

This document may not be distributed without the agreement of Innvotec and may only be distributed in compliance with the FSMA and the rules of the FCA.

This document does not constitute, and may not be used for the purposes of, an offer or inducement by any person in any jurisdiction outside the United Kingdom. This document and the information contained in it are not for publication or distribution to persons outside the United Kingdom.

This Information Memorandum does not constitute an approved prospectus in accordance with section 85(7) of FSMA nor does it constitute a public offer of shares in the United Kingdom or elsewhere. The Fund is a complying SITR Fund, is not a collective investment scheme within the meaning of Section 235 of the FSMA nor is it subject to the marketing restrictions introduced by the FCA in respect of “non-mainstream pooled investments”.

By accepting this document and/or signing up to the Fund Management Agreement by signing an Application Form, the recipient by his or her action, warrants, represents, acknowledges and agrees that he or she is a person to whom this document may lawfully be communicated without violating applicable laws and that he or she has read and will comply with the contents of this Information Memorandum.

Investments in private Community Interest Companies (CICs) such as the loans that will be made by this Fund carry higher risks than investments in quoted shares. Potential investors should be aware that no established market exists for the trading of shares in nor the making of loans to unquoted companies.

The value of an Investor’s Portfolio of holdings can fall as well as rise and an Investor may not recover the full amount of money originally invested. Past performance is not a guide to future performance.

Attention is drawn to the Risk Factors outlined in this Information Memorandum on page 27 and 28 which should be read and considered carefully.

This investment product is designed for Applicable Investors only as defined in this document and is not suitable for all investors. Potential investors are recommended to seek independent advice from an investment advisor authorised under the Financial Services and Markets Act 2000, or an appropriately qualified taxation adviser before investing. Those who do not have the necessary professional experience cannot rely on the content of this document.

Please note that none of Innvotec Limited, Innvotec (Nominees) Limited, Young London Today Limited, or any of their agents or employees is able to provide any advice about whether a person should invest in this product.

Any references to tax laws or tax rates in this Information Memorandum are subject to change by the government or HMRC and tax benefits depend on personal circumstances.

Innvotec has taken all reasonable care to ensure that the facts stated in this Information Memorandum are true and accurate in all material respects, as at the date of its publication and that there are at that date, no material facts, the omission of which would make misleading any statement made in this Information Memorandum. However this document is not intended to constitute a recommendation or provide advice to a prospective investor. Any statements of opinion or belief contained in this document regarding future events or outcomes constitute Innvotec’s own assessment and interpretation of information available to it at the date of issue of this document and no representation is made that such statements are correct or that the objectives of the Fund will be achieved.

Reliance on this Information Memorandum for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested.

It is very important that you read carefully and fully understand this document and the risks involved with the arrangements described, so you can decide whether they are right for you. The opportunity is not suitable for all and the “key” risks are highlighted in this document.

The Fund is not an “Approved” fund as defined by section 251 of the Income Taxes Act 2007.

Any income tax, capital gains or other tax relief will depend on personal circumstances and, if any person is unsure of his or her own potential tax liabilities or what tax reliefs may be available to him or her then he or she should seek professional advice from a qualified tax adviser.

Applications may only be made and will only be accepted subject to the terms and conditions of the Fund Management Agreement, a copy of which is available on request from Innvotec and satisfactory completion of the Application and the accompanying Appropriateness and Client Suitability Form.

Information Memorandum for the Adolescent Care SITR Fund.

February 2018

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INFORMATION MEMORANDUM FOR THE ADOLESCENT CARE SITR FUND (“THE FUND”)

CONTENTS

IMPORTANT NOTICE ....................................................4

INTRODUCTION FROM INNVOTEC - THE FUND MANAGER ..................................................6

LETTER FROM YOUNG LONDON TODAY - THE STRATEGIC PARTNER .......................................7

KEY FACTS ...........................................................................8

INVESTMENT BACKGROUND .................................9

The Problem .................................................................................9The Investment Opportunity .......................................................10SITR Benefits ................................................................................10

THE LOCAL AUTHORITY LEGAL FRAMEWORK ....................................................11

YOUNG LONDON TODAY (“YLT”) .....................12

Young London Today ....................................................................12Services Provided .........................................................................12Sample Of Typical Properties ......................................................13YLT’s Present Property Portfolio ..................................................15

THE INVESTMENT OPPORTUNITY .....................16

Proposed Provision Of Property ..................................................16YLT History ..................................................................................16YLT Structure ...............................................................................17YLT Management..........................................................................18

YLT CONTRACTS ............................................................19

Contracts ......................................................................................19Other Providers............................................................................20

WHAT IS A COMMUNITY INTEREST COMPANY - CIC? .....................................21

FUND STRUCTURE ........................................................22

Fund Structure ..............................................................................22Wind up of the Fund and Return of Investor Commitment ........22

STRUCTURE AND SHAREHOLDING OF EACH ADOLESCENT CARE CIC ....................23

FUND FEES ...........................................................................24

THE INITIAL ADOLESCENT CARE TEAM ........25

THE INNVOTEC TEAM .................................................26

RISKS ........................................................................................27

Investment Risks ...........................................................................27Specific Risks .................................................................................27Taxation Risks ...............................................................................28

HOW TO INVEST & ADMINISTRATION DETAILS.....................................29

APPENDIX 1 – TAXATION .........................................30

APPENDIX 2 – YLT FINANCIALS ...........................31

APPENDIX 3 – FINANCIAL PROJECTIONS FOR THE ADOLESCENT CARE CIC COMPANIES ..32

APPENDIX 4 – DEFINITION OF AN ELIGIBLE CHILD .......................................................34

APPENDIX 5 - DEFINITION OF A RELEVANT CHILD ......................................................35

APPENDIX 6 - CURRENT PORTFOLIO OF YLT CONTRACTS ............................................................36

APPENDIX 7 - CURRENT YLT OPERATIONS .38

APPENDIX 8 - RELATIONSHIP BETWEEN THE ADOLESCENT CARE CICS AND YLT ..... 39

APPENDIX 9 -SERVICES TO BE PROVIDED BY EACH CIC ............................................................... 40

APPENDIX 10 - HMRC ADVANCE ASSURANCE LETTER .......................................... 44


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INTRODUCTION FROM THE FUND MANAGER

Dear Investor,Innvotec Limited “Innvotec” is pleased to announce the launch of its initial Social Investment Tax Relief “SITR” Fund – “The Adolescent Care SITR Fund”, the ultimate beneficiaries being vulnerable, young Adolescents whose wellbeing remains the responsibility of the Local Authority.

The Social Investment Tax Relief legislation is from an investor’s perspective the financial equivalent of the EIS, but its specific purpose is to raise money for social enterprises and charities that provide benefit to the community. In the case of this Fund the commitment raised will bring enormous benefit to the wider society as it is directed towards the provision of adolescent care services to those who are in Local Authority care, especially those with the more challenging issues, but with a path to being able to live independently in two to five years.

Young London Today (YLT) is Innvotec’s chosen strategic partner for this Fund. YLT is a leading organisation in providing support in London for young people with the more difficult and complex problems, it provides these services as a preferred supplier to a majority of the London Local Authorities. The companies to be funded will offer their services on the open market with YLT as the launch customer.

Local Authorities are obliged by legislation under the provisions of the Children (Leaving Care) Act 2000 to provide accommodation and appropriate support for adolescents in the process of leaving full time care and moving towards independent living. They are obliged to do once the young person reaches the age of sixteen.

Many of these people come from deeply disturbed backgrounds and require a wide range of tailored support to address issues ranging from trauma, lack of confidence to the basics of learning to live by yourself and take your place in society, to protection from knife-crime and to assisting young asylum seekers.

In order to help integrate these young persons into society, a consistent and long-term infrastructure is needed to deliver the necessary support. Part of this infrastructure is the provision of shared, supervised accommodation within the local community. Mapping of where the properties are situated is paramount for the benefit of the young people’s safety and wellbeing.

Local government is obliged to support the youngsters financially but the problem being faced by YLT (and indeed organisations that provide similar services) is they are currently only able to rent properties on relatively short leases which makes it very difficult to provide the necessary stable background to meet the needs of many of the young persons to whom services are provided.

The vagaries of the rental property market in Greater London are well known as are the pressures on Local Authority budgets, especially in relation to the provision of care whatever the age of the recipient. YLT finds itself in the middle of increasing costs and largely static Local Authority budgets. To help maintain the level of service required in such challenging times, the proposal is to raise funds under SITR to help companies such as YLT address the difficulties surrounding the costs and short term nature of the leases.

SITR differs from EIS in that those committing can invest via unsecured loan or equity and this investment opportunity has been structured by way of unsecured loan with a return of 3% per annum and broadly equating to current property yields. Investor loans will have final repayment date of 31st March 2025.

The structure involves the setting up of a number of Community Interest Companies(“CICs”), all with the name Adolescent Care, and with a numeric suffix and, as such, each CIC is original. The CICs will deliver “semi-independent” living to young persons with complex needs and challenging behaviour. Operationally, YLT will be the first company to contract with each of the Adolescent Care CICs for the provision of specialist services as defined in this document, and such services will be delivered in properties that are acquired and fitted out for purpose by the Adolescent Care CICs.

Commitment to the Fund is best viewed as being a good investment, offering attractive tax reliefs and equally importantly addressing an issue that we all know is for real.

The Fund owes much to original thought and teamwork, in this respect Innvotec is indebted to the assistance provided by Chestertons, Magma and Stone King LLP, in property tax, and legal advice respectively.

Finally and importantly there are no charges or costs directly borne by the Investor whatsoever, thereby providing the maximum financial benefit to those young adolescents that need it most.

I do hope you find this proposal of interest especially given the purpose to which your commitment will be directed.

John MarsdenManaging Director

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LETTER FROM THE STRATEGIC PARTNER

Dear Investor,Young London Today is delighted to be chosen as the strategic partner for the delivery of the Adolescent Care SITR Fund. The successful delivery of this project is paramount to ensure housing stability for the Young People placed in our care. Whilst we will be the first company to use the services of the Adolescent Care CICs, we will also work hard to ensure that their capabilities are made known to others so that more young persons in the pathway to leaving Local Authority care can benefit.

The Government is challenged with ensuring that services such as ours are maintained in an ever- decreasing pool of available funding. However, the Office for National Statistics reports an ever-increasing number of Young people coming into care. It is the responsibility of myself and my colleagues as the leadership team at Young London Today to source and secure innovative ways to meet the needs of a changing and demanding Care Leaver population. We are very happy to be involved in a project which will go a long way towards helping to solve one of the most challenging areas of delivery; a stable environment in which to teach the young persons how to live independently.

The role of the Local Authority is to act as the “Corporate parent” which means transferring their responsibility to the Young Person onto the service provider, such as Young London Today, who then delivers a service to a vulnerable young person “in loco parentis”. What is the role of any parent? To support, and enable, the successful transition of a child into adulthood. We at Young London Today are tasked to carry this out on behalf of the real parent(s) and the Local Authority and seek to ensure through projects like this SITR Fund that the job is done well.

The legislative benchmark we work towards to ensure compliance is high. Our team endeavour daily to work with some of society’s most traumatised, challenging and vulnerable young people at an age where the best supported adolescent can struggle to find their feet in today’s world. We are encouraged by the good outcomes we have achieved with the dedication of a committed team and young people who are determined to achieve against the odds.

In our daily work we ensure that the ethos of “self-fulfilling prophecy” is understood and translated so our young people are positively encouraged to be the best they can be. Professionals work in partnership with external agencies to support young people who have fallen in their efforts due to lack of education, offending, Mental Health or perhaps they were not assisted by the agencies at the time of their presenting initial need. Semi-independent living where it can be achieved firmly gives Care Leavers the life-skills and confidence that they require to not only step into the world but also be equipped to make a positive contribution to the community in which they and we live.

The Adolescent Care CICs with their focus and resource will allow Young London Today, and companies similar to ourselves, to focus clearly on the task at hand; raising the young people in care into adulthood, whilst reducing the risk element posed by short-term, sometimes unsustainable property tenancies. In this joint effort, we will work collaboratively in the true spirit of the age old saying that it truly “takes a village to raise a child”.

We thank you for taking the time to consider investing into this project and look forward to working, towards pioneering a platform for the future which will undoubtedly have a very positive social impact.

Agnes Amo-Mensah Corporate Director of YLT


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KEY FACTS

Minimum Fund Size£1 million.

Maximum Fund Size£20 million although should there be sufficient demand the maximum may be increased at the Manager’s discretion.

Minimum Investment£10,000 and in tranches of £5,000 thereafter.

Maximum InvestmentNo maximum but income tax relief under SITR is only available on up to £1 million of qualifying investment per tax year.

Interest3% per annum rolled up, not compounded, and payable on repayment of the Loan.

Closing DateThe Fund closing date is 3rd April 2018.

Initial ChargesThere is no initial charge to Investors, meaning that relief is potentially available on 100% of commitment.

Investor CommitmentWill take the form of a number of unsecured loans to Adolescent Care CICs. The maximum number of loans per investor will be fourteen if the maximum commitment of £20m is raised and not extended.

Subsequent ChargesThere are no charges levied on the investor on this investment.

Young London TodayYoung London Today (YLT) is Innvotec’s long-term Strategic Partner in this SITR Fund. YLT is responsible for identifying opportunities for investment within the Young Adolescent Care Sector. YLT will also provide on-going support to both Innvotec and the individual Adolescent Care CICs.

YLT is a major provider of adolescent care services to the London Boroughs.

YLT will be the first client for the Adolescent Care CICs and YLT (and potentially others) will contract separately with each Adolescent Care CIC for the provision of specialist services with accompanying service level agreements.

CustodianLoans by the Investor to the SITR Qualifying Social Enterprises will be registered in the name of Innvotec (Nominees) Ltd with the designation SITR-AC. At all times each Investor remains the beneficial owner of the loans introduced.

SITR Tax ReliefA 100% SITR Investment. The Fund will only invest, via subordinated debt, in SITR Qualifying Companies that have received pre-assurance from HMRC. See Appendix 1 describing SITR regulations and conditions. Essentially an EIS model, which everyone understands, but for socially approved purposes.

Fund FocusAn investment product focused on improving the welfare of young adolescents in local authority care via Investor loans into a number

of community interest companies (CICs) formed for the purpose. These companies are each called Adolescent Care CIC and bear the appropriate number from 1 upwards. Each of the companies can accept up to £1.5m of investment by way of equity or loan. The intention is that investors’ commitment into the Fund will be equally spread across each CIC. The number of companies in which Investors will have loans will be determined by the size of the Fund.

The loan monies received by each Adolescent Care CIC will be used to provide support of the specified trade which is the provision of care to adolescents in local authority care but who are on the pathway to independent living.

Each Adolescent Care CIC is a Qualifying Social Enterprise for the purposes of SITR.

Investment PeriodThe timing of investment via the investor loans into the Adolescent Care CICs to ensure Qualifying Status will be before 5th April 2018 assuming the Minimum Fund Size is reached.

ManagerInnvotec Ltd has been making investments in start-up and early-stage opportunities for nearly 30 years and has been involved in raising and managing EIS and SEIS funds for 8 years. This is Innvotec’s first SITR fund.

Portfolio ApproachThe funds from the Investors will be used, in the first instance, to fully fund Adolescent Care CIC 1 to the permitted £1.5m maximum before applying additional commitment to Adolescent Care CIC 2 and then Adolescent Care CIC 3 etc.

The intention is that an Investor’s commitment will be divided equally between each and all of the Adolescent Care CICs funded with the proviso that no more than 30% of the total loan made to a CIC will come from a single Investor.

Portfolio CompanyAny Adolescent Care CIC which is in receipt of an Investor’s Loan.

TermWhilst there is no fixed term for the Fund, the Investor Loans have a final repayment date of 31st March 2025, effectively seven years after drawdown. The intention is to repay all the Investor loans to the Adolescent Care CICs and accrued interest within 7 years and after a minimum of 3 years, so as not to lose SITR relief. The ultimate date of termination of an Investor’s total Commitment to the Fund will depend upon the Manager and the directors of the Adolescent Care CICs ability to realise all the properties within each Adolescent Care CIC. It is likely that Investor Loans and accrued interest will be repaid over a period and not at a single point in time.

Specialist Services of the CICsTo include but not limited to services requiring qualified personnel which are delivered to young persons who exhibit complex care needs, present challenging behaviour, are expectant mothers who themselves are in care, are unaccompanied asylum seeking children, are struggling to come to terms with transgender and identity issues, who have adolescent mental health issues and who have health and mild learning disability. Each to be delivered in supported and fit for purpose accommodation.

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INVESTMENT BACKGROUND

THE PROBLEM

Published statistics from the Department of Education and the NSPCC indicate that as of February 2017 there were 93,000 children in care in the United Kingdom. Of these over 60% are there because of abuse or neglect and, in addition, this includes such things as sexual exploitation and child trafficking. These children are looked after either in residential homes or in the fostering system.

Some key facts follow:

• At the age of 16 in line with the Care Leavers Act of 2000, all Young People in care begin the transition of Leaving Care and they become classified as Care Leavers and on reaching 18 are identified as either an Eligible or Relevant Child.

• The Local Authorities responsibility for total support is expected to end from the time the child reaches the age of 18.

• If considered necessary, local authorities must continue to support care leavers until they are 21 (or 25 if in education and training) in line with statutory guidance from the Department for Education, which sets the overall framework for the delivery of support to care leavers.

• Children must leave local authority care by their 18th birthday, whereas 50% of all 22-year-olds still live at home.

• Those leaving care may struggle to cope with the transition to adulthood and may experience social exclusion, unemployment, health problems, or end up in custody.

• In 2013–14, 41% of 19-year-old care leavers were not in education, employment or training (NEET) compared with 15% of all 19-year-olds.

• In 2013–14 local authorities reported that they had spent £265 million on care leaver services such as those provided by YLT.

• The Government wants local authority care leavers to receive the same care and support that their peers would expect from a reasonable parent and, in 2013, the government published the Care Leaver Strategy.

• As they start to prepare to leave local authority care the child is encouraged to become more independent, take more responsibility for themselves and begin the transition to adulthood and taking a full place in society.

A more detailed definition of an Eligible and a Relevant Child is contained in Appendices 4 and 5. Essentially the difference is that a Relevant Child is not, in legal terminology, “looked after” which means that they do not have suitable accommodation and the necessary support available as required by the Care Leavers Act and accordingly it falls upon Social Services within the Local Authorities to continue to provide and access such support.

A recent report by the BBC (George Greenwood 15th February 2017) highlights just how vulnerable Care Leavers in the age bracket 18 to 21 are. This section of our society make up about 1% of the population but suffer around 7% of the deaths, they are roughly seven times more likely to die and these figures are probably understated due to the difficulty of collecting comprehensive data.

Around 10,000 reach the care leaver stage each year and it is in this area of providing care to those in the transition stage and especially for the Relevant Child that YLT and similar businesses operate. It is a sad fact but this number has increased by almost 50% over the last 10 years, for a variety of reasons, including reduced adoption, increased family breakdown, radicalisation and teenage pregnancy and the trend looks set to continue. (DFE Graph 2004-2014).


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The Local Authority still retains the responsibility to support the Relevant child and if required needs to maintain them, find or provide suitable accommodation and other necessary support, which may include cash. This responsibility continues until the Relevant child is at least 21 and on to 25 if they are in education or training.

The latest costs reported by Local Authorities for looking after Eligible and Relevant Children, known as Care Leaver Services, is for the years 2013-14 and is estimated at £265million. The National Audit Office “NAO” states that local authorities spent on average £6,250 for each care leaver in 2013-14, ranging from an estimated £300 to £20,000. The NAO publish that Local authorities spent about £2.5 billion on children in care between April 2012 and March 2013 and worked out how much local authorities spent on every child in foster care or in a children’s home. For one year the average cost to local authorities is about £30,000 for a foster place and £130,000 for a residential place. The financial cost of not moving into adulthood successfully is likely to be high to both Care Leavers and the public. The principal outcome measure is the number of Care Leavers not in education, employment or training (NEET). In 2013-14, 41% of 19-year-old Care Leavers were NEET compared with only 15% of their age peers. According to the NAO, the lifetime cost of the current cohort of 19-year-old care leavers being NEET would be around £240 million, or £150 million more than if they had the same NEET rate as other 19-year-olds.

THE INVESTMENT OPPORTUNITY

The problems faced by adolescents and councils covered in this section of the Information Memorandum, does on a positive note, create an investment opportunity - an investment where investors can also do some good!

This is an opportunity arranged by Innvotec Limited “Innvotec” to invest in the Adolescent Care SITR Fund whereby Investors make loans to Community Interest Companies which will enable such companies to start to carry out their trade.

The key objectives of the Fund are:

• To provide Investors with a modest amount of upside via a 3% coupon.

• To provide investment into what is effectively the Public Care Sector, specifically the care and development of vulnerable young adults who exhibit challenging behaviour or whose circumstances render receiving additional service.

• To make a genuine social impact in improving the lives of young people who are on the fringes of society and need specialist support and understanding as they prepare to move to independent living. Such support is best provided in permanent and purpose-fitted accommodation.

• To manage each Adolescent Care CIC so that incoming receipts cover the costs associated with providing the service and the interest due on Investor loans.

Should one Adolescent Care CIC not be able to repay its loan and interest, any shortfall cannot be made good by another Adolescent Care CIC.

SITR TAX BENEFITSThe SITR tax benefits are only for Individual Investors. Further information on Taxation can be found on page 30 and in the Innvotec “Know More About: Tax Efficient Investing” guide.

0

2,000

4,000

6,000

8,000

10,000

12,000

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

6,800 6,800 6,700 6,900

7,6008,200 8,170

8,4608,750

10,020 10,03010,310

10,040

9,190

Young people aged 16 or over in the transition to leaving care

The number leaving fulltime care after their 16th birthday and being put on a path to independent living has increased by almost 50% in the past 10 years

Note1 Not all of these children satisfy the eligibility criterion for care leaver services (that is, that a child is looked after for a total of at least 13 weeks after their 14th birthday including some time after their 16th birthday).

Source: Department for Education, Statistical First Releases on children looked after by local authorities, 2004–2014, Table D1

INVESTMENT BACKGROUND

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THE LOCAL AUTHORITY LEGAL FRAMEWORK

The legal framework that specifies the Local Authorities’ responsibilities for children in care of whatever age and status is the Children Act 1989.

This was amended by the Children (Leaving Care) Act 2000 which replaced the provisions in Section 24 of the 1989 Act relating to the duties and responsibilities of the Local Authority towards children in their care and creating new duties regarding Relevant Children. These came into effect on 1st October 2001.

As the child reaches the age of sixteen and moves towards leaving the immediate care of the Local Authority, the Local Authority must provide a written statement describing how the needs of the child/young adult/young adolescent will be addressed and the on-going support the Local Authority will have to either provide or procure. This includes details of their accommodation, education, assistance in finding employment, health needs and financial support and is known as the Pathway Plan and is personal to the individual. The Pathway Plan is regularly reviewed and updated as the young adult achieves specified goals and their needs and situation change.

The 1989 Act requires that a Pathway Plan must be prepared for all Eligible Children once reaching eighteen and continued for all relevant and former Relevant Children. Each young person’s Pathway Plan will be based on and include their care plan and will set out the actions that must be taken by the responsible authority, the young person, their parents (if appropriate), their carer’s and the full range of agencies responsible, so that each young person is provided with the services they need to enable them to achieve their aspirations and make a successful transition to adulthood. This plan must remain a “live document”, setting out the different services and how they will be provided to respond to the full range of the young person’s needs.

The Pathway Plan must address in particular :

• The young person’s health and development building on the information included in the young person’s health plan established within their care plan when they were looked after. The plan should support the young person’s access to positive activities

• Education, training and employment. The Personal Education Plan (PEP) should continue to be maintained while the young person continues to receive full or part-time education. Information within the PEP will feed directly into the Pathway Plan. Pathway plans must have an explicit focus on career planning, taking into account the young person’s aspirations, skills, and educational potential.

• Contact with the young person’s parents, wider family including siblings and friends and the capacity of this network to encourage the young person and enable them to make a positive transition to adulthood.

• The young person’s financial capabilities and money management capacity, along with strategies to develop the young person’s skills in this area.

The Adolescent Care CICs will provide targeted support delivered by experienced care professionals to ensure that the specific needs of the young person as directed by their Pathway Plan are addressed. The Adolescent Care CICs will deliver Individual Care Plans in partnership with the Local Authority, YLT and others who are the main contractors to the Local Authorities and the young person. There is ongoing assessment by the Local Authorities to support young people to meet their long and short term goals in their journey towards independent living.

The specialist services to be provided by the Adolescent Care CICs will be delivered under contract to YLT and others who hold the master framework contracts with the Local Authorities.


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YOUNG LONDON TODAY

YOUNG LONDON TODAY

Young London Today (YLT) will be the first client of the Adolescent Care CICs. It is an established business and essential to the young adults they care for as well as being the initial conduit to providing income for the CICs.

It is a company limited by guarantee, dedicated to helping young people leaving local authority care make a successful transition to independent living.

Young London Today has framework contracts with the majority of the London Boroughs and will outsource a considerable number of its specialist support services under such contracts to the Adolescent Care CICs under service level agreements.

SERVICES PROVIDED BY YOUNG LONDON TODAY

It is at this point, when the child reaches the age of 16 and begins the transition to being a Care Leaver, that providers such as Young London Today (YLT), step in and offer a full package of support and, where appropriate, accommodation as specialist contractors to the Local Authority.

The services provided by YLT are made available 24 hours a day, at the weekend and on national and public holidays. It is contracted to provide services during the day, sleep-over services or waking nights.

YLT offers a supported homes service that is managed by a series of care professionals ranging from qualified social work practitioners to frontline care workers with a minimum of two years of experience in the field and a QCF level 2 Qualification in Health and Social Care in Children and Young People Services.

When a young person is placed with a Service Company such as YLT, that Company works with the young person to develop a regular routine which enhances their quality of life.

Examples of the more basic tasks the Adolescent Care CICs (under contract to YLT and others) will monitor and support the young people with are:

• Registering with the GP, dentist and optician • Support with shopping and food preparation • Support with managing a household and all aspects of daily living • Support in managing and attending appointments in the

community and with other professionals • Support to access education, employment or training • Managing incidents • Support with accessing information about leisure opportunities

available to them in the local area• Support with managing any benefits and applications • Support with managing their finances and budgeting • Support with understanding and accessing opportunities to be

able to make a positive contribution • Support in learning how to keep themselves safe in the

community and in their own home

The fundamental physical basis for providing these services so as to meet the transitional needs of these young people in suitable and long-term accommodation. Typically the accommodation part of their needs will be provided by their sharing a normal three or four bedroom suburban house in carefully selected areas of Greater London, in the case of YLT these are South or West London. Most but not all houses, have round the clock on site supervision but, depending on the maturity and needs of the adolescents, some units are not supervised and a few are individual and not shared.

Whatever the unit of accommodation, the intention is to provide the young adolescent with the freedom to access the “real world” yet be based in a safe and controlled environment which can also monitor the success of the provision of the additional support they need.

YLT homes, whilst rented, are of a high quality, are inspected yearly by a member of the Chartered Institute of Environmental Health and on an announced and unannounced basis by placing Local Authorities to ensure that they meet the requirements of the Health and Safety rating system. YLT ensures that all properties used comply with full Fire and Health and Safety regulations in line with the Housing Acts, Public Health Act, Fire Precautions Act 1971, Furniture and Furnishings Fire Safety Regulations 1988 and as amended 1989 and 1993, and any other national and local regulations as to the safety and standards of housing. All Houses of Multiple Occupation (HMO) comply with all appropriate legislation, regulations and guidance relating to HMO’s. The homes run by the Adolescent Care CICs operate under and adopt the same high standards and principals.

All HMO’s are licensed by the relevant local authority, have a current fire safety certificate and shall meet all safety standards current at their time of use. Pursuant to this Select List, each young Person shall have full access to separate and/or communal facilities (living room/dining room, kitchen, bath, shower, toilet, laundry, drying and ironing areas) where appropriate.

The law relating to HMO’s is complex and currently derives from the Housing Act 2004. The Provider, in this case the Adolescent Care CICs, shall make themselves aware of this legislation so that they can ensure that any properties offered to the Participating Authorities fully meet its requirements.

The intention is that whilst YLT and others have the master contracts with the Local Authorities, as much as possible of the delivery of specialist support services under such contracts will fall to the Adolescent Care CICs and their ability to provide a far greater stability to the lives of the young people being cared for, as described in more detail elsewhere in this document.

The Adolescent Care CICs will focus on delivering “semi-independent” living to those young persons with complex needs and challenging behaviour.

13

A SAMPLE OF TYPICAL PROPERTIES


14

A SAMPLE OF TYPICAL PROPERTIES

YOUNG LONDON TODAY

15

YLT’S PRESENT PROPERTY PORTFOLIO

Mirrors that of other similar providers. At present the accommodation needs of the young adolescents in care are met entirely by properties available in the commercial rental market.

This has a number of serious disadvantages to both the care provider and the young adolescent as a receiver of such care;

YLT, by way of example, presently has a portfolio of nineteen properties, seventeen of which are on a short notice rental basis, the other two, more recent additions, are on three and five year leases.

All the rental properties are subject to termination at only two months notice. Although some have been held for some time, the position is exposed to a marked increase in volatility in the market, both as to rental increases and terminations.

Unfortunately some landlords are aware of the difficulty providers like YLT have in relocating their young adolescents which makes rental increases harder to resist.

This has serious implications, particularly the first point, below: o A vital ingredient for these young people to recover from past

traumas and develop is to be in a stable environment. To be moved from house to house, on occasions in different parts of London, as short notice terms or unacceptable rental increases are enforced is extremely unsettling and undermines much of the good that YLT and others have done for the young people.

o The notice periods are far too short should providers wish to

make significant investment in improving the properties and making them a better fit for use.

• Property rental and lease payments are the second largest cost item for YLT after the costs of the supporting social workers. The cost of the support staff is approaching 40% of income and rental/lease payments approaching 35% see Section 6.3. This is both expensive and subject to (upward only) market fluctuations which complicates budgeting. Other providers will face similar financial challenges.

• The economics of this approach are becoming increasingly adverse. Local Authority budgets are forever being stressed and each is under increasing pressure to reduce costs. This is at a time when demand for care services in general is growing and will continue to grow. At the same time the suburban London property market is showing, and is expected to continue to show, strong growth in capital values and also accompanying rentals.

• The intention is for YLT to subcontract all or as much as is possible of its specialist services to the Adolescent Care CICs and that instead of delivering such services in rented property with the aforementioned disadvantages, the Adolescent Care CICs with their own freehold properties will be able to offer greater stability to the lives of the young people.

• To the extent that YLT is unable to utilise the resource available within the CICs, the CICs will look to engage with other providers.

YLT and other providers will remain the primary contractor with the Local Authorities as they have the longevity and credibility to be preferred suppliers.


16


THE INVESTMENT PROPOSITION – PROPOSED PROVISION OF FREEHOLD PROPERTY

The existing way that suppliers like YLT meets their accommodation needs, as required to help the adolescents in their care, is increasingly unsatisfactory from a financial standpoint.

This investment proposal is underpinned by YLT’s and, it is assumed, other provider’s desire to provide the most stable care possible for the Relevant Children in their care and this includes accommodation that is both permanent and affordable, given the ever-increasing financial constraints, and fit for purpose.

By working alongside the likes of YLT and other providers, the Adolescent Care CICs with their freehold property base underpinning the provision of specialist services, are poised to become a significant provider of young adolescent care services to the London Boroughs. At the same time monies expected to be saved in property related costs can be ploughed back to improve the services provided by the CICs.

It is intended that the Adolescent Care CICs buy freehold premises wherever possible at auction and under the direction of Chestertons, so as to acquire the most suitable freehold premises at the most affordable prices. The properties acquired will be fitted out so to be classed as being Houses of Mass Occupancy and capable of providing suitable, fit for purpose, accommodation for typically between three and five young persons.

YOUNG LONDON TODAY - HISTORY

What has evolved into Young London Today was founded by April Mitton in 2001. April, who studied Law at SOAS University,

opened a small lettings agency in South London and during the first two years of growing her company she first and foremost recognised a growing demand to provide quality assured properties to vulnerable and looked-after young people exiting the local authority care system. It was expected of these young people that they should immediately become independent, which for the majority was not attainable due to their mental, emotional, financial and physical needs.

April started to build a team to provide the necessary support and the team’s drive, determination, passion and understanding of vulnerable young people led to the formation of Young London Today (YLT). Agnes Amo-Mensah joined forces with April in 2010 providing strategic direction, operational disciplines and steering the organisation towards longer term sustainability.

They and their team have worked tirelessly around the clock, to develop and implement penetrable and effective methods to develop and improve the lives of looked-after young people. This would later become their unique selling point when securing the provision of services to many of Greater London’s boroughs. Such methods include but are not limited to: rapid intervention, 24-hour support, 24-hour supervised accommodation, prompt financial aid and in-depth peer mediation.

YLT was incorporated as a company limited by guarantee in 2012. The nature of the sector is not conducive to making a meaningful profit and whatever profits are made are reinvested into the business.

The dynamic, diverse and experienced leadership team has a track record working with some of London’s most challenging and vulnerable young people. Such experience and consistent positive results, has propelled the organisation to the forefront of innovative research focused on marginalised young people, social care packages and international government consultancy.

17

YLT STRUCTURE

Today YLT is currently caring for some 72 young people in 20 rental properties throughout South and West London and can provide care services for 74.

This activity is supported by a staff of 65 of which a core team of 15 are on the payroll and the rest, who are typically professionals, provide the specialist support services and are on sub-contract.

The organisation chart below shows the structure of the company

MAINTENANCE TEAM

BUILDING MANAGER

FOUNDER

ADMIN

QUALITY ASSURANCE

CARE MANAGER

CORPORATE DIRECTOR

FINANCE MANAGER

FINANCE ASSISTANTS

CARECO-ORDINATES

OUTREACH KEYWORKERS

KEYWORKERS

INFORMATION ADVICE &

GUIDANCE

BUSINESS DEVELOPMENT

MANAGER

FOREMAN

The intention is that the Adolescent Care CICs ultimately provide all the services currently undertaken by the self-employed professionals and, where appropriate, buy-in management supervision from YLT. More detailed descriptions are given elsewhere in this document.

Employed by YLTSelf employed specialist


18


YLT SENIOR MANAGEMENT

The Management Team at YLT are multi-disciplined care professionals who have dedicated their careers towards enhancing the lives and outcomes of vulnerable people in our society.

The Senior Management Team comprises;

• a qualified Social Worker with over 25 years experience both in the private and statutory sector and is registered with the Health and Care Professions Council

• a Corporate Director with over 15 years experience as an Auditor of Services

• a Placements Manager with 30 years of experience in the private and statutory sector; all three with a minimum of Level 5 in Health and Social Care

• a Housing and Property Manager with 20 years of experience in the housing and building sector and

• the Founder with 15 Years of business and contracting experience in providing private sector services to Government bodies.

• the Head of Quality Assurance who is supported by a team

of 2 Information, Advice and Guidance officers who have been through the care system and are dedicated to improving outcomes for Young People.

• Associated Social Work professionals, and Care Co-ordinators each having a minimum of 10 years of experience in supporting Care leavers to transition into independent living.

The company is led by Agnes Amo-Mensah with the support of the founder April Mitton and their CVs appear below

Agnes is the Corporate Director of YLT.

Agnes has extensive experience in finance and administration gained in a wide variety of commercial environments ranging from retail, JD Sports, and IT, such as MBA IT, to auditing within the agricultural industry for UK Government. During this time, she developed a strong, practical understanding of financial systems and control.

She joined Klearwater in 2010 and went on with April to form YLT in 2012. Her administrative ability and strategic oversight has provided the structure needed for both the rapid expansion of YLT to the significant organisation seen today, and also forms the basis for further substantial growth.

AGNES AMO-MENSAH

April is the Founder of YLT

She has an LLB in International Law from SOAS and has undertaken Media Studies at Cardiff University. After obtaining her LLB, April founded a lettings agency in south London, Klearwater, which she grew to a property portfolio of some 200 homes and a client base of around 500 landlords. While developing the business she increasingly provided accommodation and support services for adolescents leaving care, which now forms the basis of YLT.

She has seventeen years of social care experience, particularly focused on Leaving Care and Learning Disability.

APRIL MITTON

19

YLT has a high reputation with all the London Boroughs with which it works and is on the list of preferred suppliers for all West London Boroughs and eleven South London Boroughs. This is the main reason that it is the chosen strategic partner for the Adolescent Care SITR Fund.

YLT has a portfolio of current framework contracts with thirteen London Councils plus a Tri-Borough contract. These are described in detail in Appendix six.

Overall, YLT successfully delivers services to the following Local Authorities who place their Looked After Children into the care of YLT.

By consistently providing high quality services, YLT is currently on the Preferred Provider List for many authorities and given the opportunity to tender for new contracts as they arise. This status means that for such authorities, YLT is automatically shown suitable opportunities for helping young people as they arise and provides a gateway to commissioning as a known and trusted partner. YLT also have a block contract with the London Borough of Croydon for the delivery of specialist support services to Care Leavers.

Local Authorities typically go out to retender every three to five years.

The Adolescent Care CICs will, from the outset, deliver many of the specialist services to Care Leavers that YLT is contracted to supply. The CICs will deliver “semi-independent” living to those young persons with complex needs and challenging behaviour.

Once the YLT relationship is proven, and if there is excess capacity, the Adolescent Care CICs will then look to work with other similar suppliers.

LONDON COUNCILS YLT PROVIDES SERVICES TO

YLT CONTRACTS


20

PROVIDERS OTHER THAN YLT

The market is fragmented and with 3 exceptions, comprises mainly single unit operators, such smaller operators are expected to welcome the additional resource and capacity in the sector.

There are three large providers in the Greater London area, Catch-22, YMCA and Centre Point. All three, although substantially larger than other providers, were not established solely with the Care Leaver agenda in mind. All three focus on providing temporary housing and support to homeless young people and have over the years evolved to include provision of a service to Care Leavers. Whilst this may be sufficient for Young People who are more capable of independent living in large groups, it is not for the large percentage that struggle to cope with the transition to independent living.

• YMCA 40 Stockwell Road SW9 9ES; accommodating 115 presently on site and 86 in self-contained studios. For the most challenging Young People this is not suitable, due to Risk and Safeguarding issues and often some young people do not meet the YMCA 40 criteria due to their high level of need.

• Catch-22 is a non-accommodation based provider who amongst a number of other services offers outreach support to Care Leavers. Although they have a large reach across London and the UK they are limited in their service to Care Leavers as they do not offer accommodation.

• Centre Point’s mandate is to provide temporary accommodation and support to vulnerable people. Again the strict focus is not just on Care Leavers and the majority of provisions are large Hostel based accommodations making it harder to provide focussed 1-1 support that many of YLTs young people require.

The Adolescent Care CICs and Young London Today’s primary focus is high need Care Leavers.

21

WHAT IS A COMMUNITY INTEREST COMPANY - CIC?

Community Interest companies “CICs” are a relatively new type of limited company for people wishing to establish businesses which trade with a social purpose (social enterprises), or to carry on other activities for the benefit of the community.

CICs are limited companies which operate to provide profit, and CICs can deliver limited returns to investors as is expected, via the coupon on Investor loans, to be the case with the Adolescent Care CICs. The purpose of CICs, however, is primarily one of community, to provide a benefit to the community that they have been formed to serve.

Whilst returns to investors are permitted, these must be balanced and reasonable, to encourage investment in the social enterprise sector whilst ensuring true community benefit is always at the heart of any CIC. For some CICs this is delivered through the provision of a service to a specific cohort of the community, for example a welfare service to vulnerable young people which is the raison d’etre behind the Adolescent Care CICs.

The concept of community is important to understand as it can have a wide range of meanings from the population as a whole to a section of the community, such as the residents of a particular area or a group of people suffering from a particular disadvantage.

Each CIC is required to submit on a yearly basis a report to the Regulator detailing the activities undertaken and how these have benefitted the community. This is an important document as it sets out publicly exactly how the CIC has met its obligations to deliver community benefits.

The creation of a CIC has a number of significant legal implications. One of the most important of these is the ‘asset lock’. This is designed to ensure that the majority of the assets of the CIC (including any profits or other surpluses generated by its activities) are used for the benefit of the community. This is a permanent step, which cannot be reversed.

CICs are a useful vehicle for enterprises of all sizes from a small community care project to a large organisation providing

international fair-trade type distribution systems for the benefit of overseas producers.

CICs are a useful legal form for holding local assets such as property as well as for trading in a conventional sense through the provision of goods and services, either directly to the public and organisations or through contracts with frontline service providers such as Young London Today.

As CICs are intended to use their assets and the majority of any profits for the benefit of the community they are formed to serve, they must embrace some special additional features the most important of which is the ‘asset lock’. The main elements of the asset lock are as follows:

• CICs may not transfer assets at less than full market value unless the transfer falls within a narrow range of permitted transfers such as to another asset-locked body or for the benefit of the community.

• If its constitution allows a CIC to pay dividends (other than to another asset locked body – essentially another CIC or a charity) these will be subject to a cap that limits the amount of dividend payable. A similar cap applies to interest payments on loans where the rate of interest is linked to the CIC’s performance. The 3% interest on Investors’ loans is permitted within rules regarding CICs.

• On dissolution of a CIC any surplus capital must be transferred to another asset-locked body once all liabilities have been met.

CICs are required to produce an annual CIC Report, which will be delivered with their accounts to Companies House, and this report will be placed on public record. The Report must record the CIC’s activities and how it involved its stakeholders during the year. This will ensure that the community served by the CIC will have easy access to key information on its activities. It must also contain additional financial information such as payments to directors and declaration of dividends.


22

FUND STRUCTURE

The proposed investment structure is shown below.

Each Investor subscribes his or her commitment to the Fund by way of an unsecured loan to be spread across all the CICs funded. A number of CIC companies under the name Adolescent Care CIC with the numeric suffix of 1 upwards have been set up to receive investor loans. The actual number of CICs to receive funding will be dependent upon the size of the Fund. An Investor’s commitment will be via unsecured loans, of an equal amount, to each of the CICs funded.

Each CIC can receive up to £1.5m by way of loan so as to remain compliant with the rules of SITR.

Innvotec will charge each funded Adolescent Care CIC 5% of funds raised out of which it will settle all professional fees associated with raising the Fund and establishing the CICs.

Any Adviser Charges will be settled in the first place by Innvotec and the charge then passed through to the Adolescent Care CICs.

It is expected that a minimum of 92.5% of an Investors’ commitment will be available to each funded Adolescent Care CIC to build its business.

WIND UP OF THE FUND AND RETURN OF INVESTOR COMMITMENT

To maintain SITR qualifying status for Investor loans, the Fund cannot be wrapped up until year four at the earliest and the intention is to wind up the Fund between years six and seven when Investor loans are due for repayment. The Fund will be wound up when each and all CICs have repaid the Investors’ loans in full.

The CICs contracted obligation will be to repay its loans on 31st March 2025, not before. The fact that Investors’ commitment is via loans means that the Adolescent Care CICs do not have to be sold or wound up in order to make repayment of the loans. Although the properties acquired will need to be refinanced or sold to fund the repayment of Investor loans.

The repayment of Investor loans will be accomplished by one or a combination of the following;

• The refinancing of the property portfolio held across the Adolescent Care CICs.

• The outright sale of the property portfolio to a third party institution ,which could be another CIC, supported by long-term covenants.

• The sale of individual properties.

The indicative financial modelling per Appendix 3 shows that the properties acquired must appreciate in value across the board by an average 12.5% for Investors’ loans to be repaid in full, this rate of increase is under half that experienced by the UK housing market in the last seven years - see page 24 for supporting charts.

Should the properties have to be sold piecemeal, each will be classed at the time of disposal as a House of Mass Occupation (HMO) and should the buyer, post sale, not wish to continue to have the property as a HMO, there will be a cost involved in conversion back to residential, such a cost will be factored by the buyer into the price paid.

It is up to the directors of each CIC to determine when the properties within each CIC will be sold or refinanced and Investor loans repaid.

Whilst there is a commonality of director across the Adolescent Care CICs, each CIC is to be viewed as a separate entity with its own decision making and governance.

Each CIC stands alone and the loss of one CIC cannot be compensated by another.

Innvotec and the directors of the CICs will be assisted at all times by Chestertons who are the appointed Property Advisers.

FUND STRUCTURE - BASED ON £20M BEING RAISED

INVESTORS

EACH CIC WILL RECEIVE £1.5m BY WAY OF LOAN WITH A COUPON OF 3.0% P.A.

ADOLESCENT*CARE CIC 1

ADOLESCENTCARE CIC 2





ADOLESCENT*CARE CIC 14

ADOLESCENT CARE SITR FUND(< £20 MILLION)

BUYS PROPERTIES

PRIMARILY IN SOUTH & WEST

LONDON

ON SALE OR REMORTGAGE OF

PROPERTIES - LOANS AND INTEREST REPAID

3% UNSECURED SUBORDINATED

LOAN

* EACH CIC PROVIDES SUPPORTED LIVING AND ACCOMPANYING SERVICES TO YOUNG PERSONS.

23

STRUCTURE AND SHAREHOLDING OF EACH ADOLESCENT CARE CIC

STRUCTURE AND SHAREHOLDING OF EACH ADOLESCENT CARE CIC

The Fund has been set up so that the primary beneficiaries of Investors’ commitment are the young people currently in the care of Local Authorities and hopefully on the path to independent living.

The intention is that whilst the CICs should be run to make a trading profit, any such profit will be reinvested in the business. Given the nature of the sector it is unlikely that any trading profits will be significant.

Each CIC is “governed” by an Asset Lock which means that at least 65% of any profits have to be retained in the business or made available to another Asset Locked business. Should there be a retained profit on the wind up of the Adolescent Care CIC, at least 65% has to be distributed to a qualifying social enterprise such as another CIC or a charity.

The Shareholding structure of each of the Adolescent Care CICs very much takes into account the purpose of the Asset Lock.

All Shares in each of the Adolescent Care CICs are £1 Ordinary Shares and 100% of the issued Ordinary Shares are to be held in Trust. The 100% shareholding held in trust is designed to

represent not only the minimum retained profit that falls within the Asset Lock but to ensure any and all profit is retained for community benefit.

There will be an accompanying Letter of Wishes stating that the ultimate beneficiary of the Trust will be another CIC or a Charity, either of which will have a similar social objective to the Adolescent Care CICs. The decision as to the ultimate beneficiary will lie with the Trustees.

The initial trustees to each Trust will be John Marsden and Stephen Marriott, who will also be two of the initial directors of each CIC.

John Marsden will be the initial settlor with his one founder share in each CIC being placed in Trust before investments are made in any CICs.. It is considered unlikely that further Ordinary Shares will be issued by any CIC.

There will be no representation on the Boards from YLT or any other existing service provider.


24

FUND FEES

Given the social nature of the project there are no fees payable by the Investor.

Innvotec as Promoter and Manager of the Fund will charge each Adolescent Care CIC 5% of funds raised for its efforts, out of which Innvotec will settle all professional costs associated with the Fund.

INVESTOR REPORTING AND ACCOUNTING

Innvotec will report to Investors twice a year by means of both reports and Investor presentations.

The annual accounts of each CIC will include the movement on property over the period based on house price indices and every second year there will be a formal value of all properties by an established firm.

Given the importance of property to the Fund (especially future valuation, prospects for sale, how and who to) Innvotec has reached an agreement with Chestertons, a leading firm of property specialists to provide on-going advice over the lifetime of the Fund.

PROPERTY PRICE MOVEMENT

For Investors to receive their loans back in full, there must be an average increase in London residential property prices of at least 12.5% over the period that their loans are outstanding.

Below is an extract from the Government’s House Price Index for England covering the seven years from January 2010 to December 2017 which shows that upward price movement has comfortably exceeded that required for the business model.

£200,000

Key: all property prices£150,000

£100,000

£50,000

£0

Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Dec 2017

AVERAGE HOUSE PRICE: UNITED KINGDOM FROM JANUARY 2010 T0 DECEMBER 2017

HOUSE PRICE INDEX: UNITED KINGDOM FROM JANUARY 2010 T0 DECEMBER 2017

Key: all property prices

0

20

40

60

80

100

120

Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Dec 2017

Source: www.landregistry.data.gov.uk

25

THE INITIAL MEMBERS OF THE ADOLESCENT CARE MANAGEMENT TEAM

A qualified classroom teacher by training in Business Studies, Elizabeth has spent the last decade in both education and care.

She has extensive knowledge of; managing challenging behaviour, risk assessment, safeguarding of vulnerable adults, child sex exploitation, domestic violence and safe handling of medicines.

She has held relevant positions in respect of “looked after” young persons in Lambeth, Lewisham, Hammersmith and Fulham, Croydon and Haringey.

A person formerly in local authority care with a Masters in Social Work and a focus on psychosocial issues.

Her relevant work experience includes being part of the Foster Care teams in Brent and Kirklees (Scottish Isles) and a looked-after young persons in residential care team in South London.

ELIZABETH AGANBI

CATHERINE WILSON-DOWNIE

Having worked for the last twenty years across Statutory, Private and Voluntary services, Renate Alexander is a highly experienced strategic manager and specialist consultant in the area of Children and Family Services. Areas of specialism include; expert knowledge of regulated Ofsted services, legislative requirements which includes the National Minimum Standards for children’s services, supported accommodation and post 16 Semi-independent living Foster Care. Throughout her career Renate has held responsibility for all matters relating to safeguarding Child protection procedures and the requirements of the Children Act 1989, Leaving Care Act 2000 and its supporting volumes in relation to

the quality and delivery of care within the service. Renate is a qualified Social Worker, Trainer and NVQ Level 5 Assessor whose career has spanned 1) The Glaxo Refuge; a partnership between the NSPCC and Centre Point which was the first London Project set up for runaway children. 2) The London Borough of Haringey Housing and Social Services acting as lead responsibility for Quality Assurance for standards and compliance when compared to those expected by regulated services. In this role Renate worked closely with professionals from Education, Clinical Psychology and Adolescent Psychiatry to enable Young People exhibiting challenging and disruptive behaviour to transition to transition to Foster Care, Semi-Independent Living or to reconcile with their families. 3) As Senior Service Manager of the London Borough of Islington’s Leaving Care Service Renate held responsibility for over 300 Young People aged 16-25 years of age. In this role Renate worked tirelessly to ensure that all statutory requirements were met and provided specialist advice for Directors of Safeguarding and Child Protection. Whilst working towards excellence in her professional career Renate is also a Justice of the peace, having served as a Chairman for the Adult court, deliberating on trials, Crown Court committals and specialising in Family proceedings.

RENATE ALEXANDER

Should a sufficient number of the Adolescent Care CICs be funded, the three individuals below have agreed, in principle, to join and provide the necessary initial experience and expertise.


26

THE INNVOTEC TEAM

John has spent 35 years in early-stage venture capital, of which the last 30 years have been in fund management. His earlier years were as a financial director of an international music publisher. His involvement in venture capital started as a director of a venture backed media-technology business and then as part of a company doctoring team undertaking assignments in under-performing venture investments. John progressed to fund management in 1986 when he joined Baillie Gifford to head their team majoring in private technology investment before joining Innvotec in 1990 and becoming Managing

Director in 2001. John is a qualified chartered accountant and is FCA authorised. He is also a business angel with personal investments in several private companies.

JOHN MARSDEN

Andy is a non-executive director of Innvotec. He has an MA in Engineering Science from Oxford University, an MBA from Harvard University and holds the ICAEW Corporate Finance qualification.

He has worked for a number of management consultancies, Accenture and Ernst & Young, and has large organisation line management and corporate finance experience at ADT, Ford of Europe and TI Group. More recently he was Managing Director of the corporate finance boutique, Tangible Securities.

He currently divides his working time between Innvotec and his own corporate finance company, Aurora M&A Solutions. He is also a shareholder and director of the media consultancy, AuditStar.

ANDY LANE

Satrupa is a senior member of the Innvotec team and is currently spearheading Innvotec’s digital and marketing initiatives, whilst working on principal projects such as the Adolescent Care SITR Fund and Odyssey Mission Venture Funds. She has over 15 years of experience in marketing, business and strategic planning. She started her career in experiential marketing and events with Saatchi & Saatchi India; building global brands across consumer goods, technology, and the retail industry.

In 2014, she graduated with distinction from the full-time MBA at Cass Business School, London. During the programme, she was awarded two prestigious scholarships and worked as a Business Strategy Consultant with London City Incubator. Her dissertation on Financial Services Marketing won the Worshipful Company of Marketors’ Scholarship Award 2014. She has been working in the startup environment for the past 5 years, having co-founded a strategy consultancy and an art platform, and consulted with several startups & accelerators, including City Venture Labs and Mass Challenge UK.

SATRUPA GHOSH

The team assigned to the Fund have significant experience and a proven record in private companies. They will be Directors of each CIC and oversee the smooth running of each.They are as follows:

Stephen will be an independent member of each CICs Board representing the appropriate Trust.

Stephen retired at Easter 2015, having been the Diocesan Secretary of the Diocese of Guildford for over 15 years. As Secretary he was in effect the Chief Executive Officer of the diocese, managing a company with a turnover of £13 million and assets of £115 million, principal officer of the synodical system of governance and a senior advisor to the Bishop, to other colleagues and to parishes. During his time as Secretary he was a member of the Archbishops’ Council’s Finance Committee, a founder member of

the Archbishops’ Council’s Investment Committee, a governor of a regional theological training scheme and Chair of the Church of England’s National Procurement Committee. He also stood in as acting Diocesan Secretary and CEO of the Diocese of Winchester to cover for a colleague’s tour of Afghanistan. He is now Chair of that diocese’s Investment Advisory Group.

For nine years Stephen was the Hon Treasurer of the Shaftesbury Society and part of the team that led the merger with John Grooms to form Livability. He chaired the Audit Committee of the Guildford YMCA for ten years.

Before working for the Church Stephen was a banker for 17 years, working for two North American banks selling derivatives in the pioneering days of this market and becoming a Vice President. He was latterly Director, the National Group at Société Générale, where he led a team managing a risk portfolio of $2 billion covering 85 UK corporate clients. Stephen has a degree in Engineering from Cambridge.

STEPHEN MARRIOTT

27

RISKS

An investment in the Fund is subject to a number of risks. Before making any investment decision, prospective Investors should consider carefully the risks attaching to an investment in the Fund together with fully reviewing all other information contained in this document, including, in particular, the risk factors described below. This information does not purport to be exhaustive. Additional risks and uncertainties not presently known to the Fund Manager, or that the Fund Manager currently deems immaterial, may also have an adverse effect on the businesses of the Adolescent Care CICs. Potential Investors should consider carefully whether an investment in the Fund is suitable for them in the light of the information in this Information Memorandum and their personal circumstances.

INVESTMENT RISKS

The Investor’s portfolio of investments in this fund will comprise unsecured loans to newly formed Community Interest Companies that are unquoted, are likely to be neither significantly profitable nor cash generative at time of investment and, as such, have to be viewed as carrying a higher than average level of risk.

• The loans may not be repaid in part or in whole within three years and this could result in an Investor losing his or her tax relief.

• The loans are unsecured, subordinate to all other debt, and will be made into unquoted companies and, as such, could result in an Investor losing his or her investment in full. A potential Investor that cannot afford to lose all of his or her Commitment to the Fund should not consider subscribing.

• The past performance of Innvotec, or its prior EIS or SEIS Funds is not a guide to the future performance of the Fund and such Funds perform very differently from this SITR Fund.

• The past performance of any investment(s) should not be regarded as an indication of the future performance of that or any investments made by the Fund. No guarantee can be given as to the performance of the loans made by the Fund or the level of capital returned or income that will be generated by such loans. The principal exposures for Investors are to the London residential Property market and the ability of the CICs to mortgage or sell their properties.

• The Fund will invest through loans to newly-formed Community

Interest Companies whose securities are not publicly traded or freely marketable. For the same reasons it may not be possible for the loans to be repaid in whole or in part or for interest earned to be paid:

- It may take considerable time to realise any of the Fund’s loans or it may not be possible to realise them at all.

- It may be difficult to obtain accurate information to determine the current value of the Fund’s loans.

- There can be no guarantee that the commercial or social objectives of the Adolescent Care CICs will be achieved

• Commitment to this Fund should not be considered a short-term investment. Contractual repayment date for the loans is 31st March 2025. Should any withdrawal within a minimum period of three years after investments into Portfolio Companies be made possible, it will result in the loss of SITR Relief on those investments. The intention is to begin to seek repayments for the underlying loans made by the Fund after five years with the objective of an exit across the entire Portfolio within seven years.

• Many unquoted companies such as YLT on whom the Adolescent Care CICs will rely for business have small management teams and are highly dependent on the skill and commitment of a small number of individuals. They are also vulnerable to the market. Only clients are the Local Authorities, and any delay in passing by Local Authorites will cause pressure on cash flow.

• Smaller unquoted companies requiring additional funding of the type provided by the Fund commonly experience significant change and carry higher risks than investments in larger or more established businesses.

• Loan notes are not transferrable.

Whilst the Adolescent Care CICs will each be run so as to make a trading profit, by the very nature of their activities, the services provided and the market in which they operate, the Adolescent Care companies may find it difficult to make the profit needed to pay the 3% coupon on the investors’ loans. It is not expected that any CIC will make a substantial surplus.

SPECIFIC RISKSIn the first instance the Adolescent Care CICs will rely on YLT as a conduit to business, YLT is itself a young company with a six year trading history operating in the social services sector which is known to have challenging trading conditions.

• The level of any debt (or any other prior ranking funding or securities) used by YLT in scaling up its business may significantly increase risk within a key supplier such as the Adolescent Care CICs.

• The Adolescent Care CICs trade will initially be dependent upon YLT continuing to hold and then increase the number of Preferred Supplier contracts with the London Local Authorities.

• YLT’s ability to subcontract with any company, including the Adolescent Care CICs, may depend on seeking and obtaining consent from the relevant Local Authorities which may not be forthcoming. This is unlikely to be obtained before Investor commitments are invested in the CICs.

• The ability of each Adolescent Care CICs to repay its Investors’ loans in full or in part is dependent on the upward movement in property prices over the lifetime of the loans.

• Each CIC stands alone and the loss of one CIC cannot be compensated by another.


28

Changes in economic and political conditions, to include tax laws, can substantially and adversely affect the performance of the Fund.

This Information Memorandum contains forward-looking statements. These forward-looking statements reflect the Fund Manager’s view with respect to future events. Actual events could differ materially from those in the forward-looking statements including the result of factors beyond the Fund Manager’s control. Potential Investors are cautioned not to place undue reliance on such statements.The Fund will lend to a number of CICs which have not traded and this increases the risk.

As an investment in the Fund is speculative, potential Investors are therefore recommended to seek independent financial and tax advice before investing. Please note that the Fund Manager is unable to provide you with advice about whether you should invest in this Fund.

TAXATION RISKS

• Whilst it is the intention of the Fund Manager to make investments (in the case of the Fund via unsecured, subordinated loans) in the identified unquoted companies which are qualifying under SITR legislation at the time of investment, the Fund Manager cannot guarantee that all investments will continue to qualify for any SITR Relief or indeed the continued availability of SITR reliefs to the Investor relating to any individual investment, as this depends on compliance with the requirements of the SITR legislation by both the Investor and each CIC in receipt of loans.

• Where an Investor or a CIC ceases to maintain SITR status in relation to any individual investment, it is likely to result in the loss of some or all of the available tax reliefs (with a consequent liability to pay tax or repay a prior refund of tax) together with a possible charge to interest thereon in relation to that particular investment (but not necessarily in relation to the other investments of the Fund) although in practice, if one fails, the others are likely to. In such circumstances subscription monies will not be returned to an Investor.

• The repayment, transfer or other disposal of an Investor’s loans to a CIC within the period of three years following its issue will result in any income tax saved as a result of the making of the investment becoming payable to HM Revenue & Customs.

• The levels and bases of reliefs from taxation may change or such reliefs may be withdrawn. The tax reliefs referred to in this document are those currently available and their value depends on the individual circumstances of Investors initially and throughout the holding life of the investments.

• To qualify for SITR, each CIC receiving a loan must commence a qualifying trade within two years of receiving such loan. A CIC’s ability to provide its services to YLT or any other provider is subject to YLT or any other provider seeking the consent of each relevant Local Authority which may, or may not, be forthcoming.

• The dates on which initial SITR Relief, and Capital Gains Deferral relief are available, will only be known once the Fund makes its underlying investments. Any delays in the investment into SITR Qualifying Social Enterprises will have a “knock on” effect on the opportunity to defer capital gains tax on an earlier disposal.

• The ability of the Investor to obtain the tax reliefs referred to in this document is subject to the Investor making the proper claims to HM Revenue & Customs within the requisite time limits and the Investor may lose such reliefs if the relevant claim is not so made.

• The Fund has been designed with United Kingdom resident tax payers in mind. It may not be appropriate or advantageous for a person who is not resident or who is not ordinarily resident in the United Kingdom for tax purposes to invest in the Fund.

• The Fund Manager will not normally take into account the individual tax positions of Investors and therefore actions of the Fund Manager or the CICs could give rise to a partial loss of the Investor’s SITR Relief or other tax advantages.

• An Investor should be aware that SITR Relief and Capital Gains Deferral relief is only available on the amount actually invested on his or her behalf in SITR Qualifying Social Enterprises, not on the total amount of his or her subscriptions to the Fund. Although in the case of the Fund this should be the same.

Taxation treatment depends on the individual circumstances of the Investor and may change in the future.

RISKS

29

HOW TO INVEST & ADMINISTRATION DETAILS

HOW TO INVEST

An Application Form which includes a copy of the Fund Management Agreement is available on request from Innvotec. The form should be completed in full and returned to Innvotec plus a cheque or a completed telegraphic transfer for the amount subscribed.

Innvotec is required to seek information from potential Investors to assess whether they have the knowledge and experience necessary to understand the risks connected with investing in the Fund. Potential Investors will therefore be required to complete the Appropriateness and Suitability Form which will accompany the Application Form.

CLOSING DATE AND FUND SIZE

The Fund is closing on 3rd April 2018 subject to the Minimum Subscription being raised and all appropriate agreements for the Adolescent Care CICs being in place (including consent from Local Authorities for the proposed sub-contracts within the CICs). Investments will be made before 5th April 2018.

The minimum subscription by an Investor in the Fund is £10,000 and in multiples of £5,000 thereafter. There is no maximum subscription, save for £20 million, the maximum amount of annual Commitment to the Fund, although SITR Relief for any Investor is only available for up to £1 million invested in all SITR Qualifying Social Enterprises in a tax year (whether invested through the Fund or otherwise).

The Fund Manager, at its sole discretion, reserves the right to increase the maximum size of the Fund should demand warrant such an increase.


30

APPENDIX 1 - TAXATION

PLEASE NOTE THAT FURTHER TAXATION DETAILS CAN BE FOUND IN THE INNVOTEC EIS, SEIS AND SITR “KNOW MORE ABOUT: TAX EFFICIENT INVESTING” GUIDE, WHICH SHOULD ALSO BE READ ALONGSIDE THIS DOCUMENT.

TAXATION

These notes are only intended to provide a brief summary of the tax advantages available under current legislation and HM Revenue & Customs (“HMRC”) practice. Legislation and HMRC practice may change. The rates of tax and tax relief may be altered and/or the levels and bases of reliefs from taxation may change. The tax reliefs referred to are those currently available, and are personal to the Investor. Their value depends on the individual circumstances of the Investor. Investors are advised to obtain advice from their own professional advisers as to their tax position in respect of their own portfolio.

SUMMARY

The SITR legislation provides a range of targeted incentives for investment in social enterprises, so long as the SITR criteria remain satisfied. A summary of the tax benefits for investors in qualifying SITR Social Enterprises is outlined below and a more detailed explanation of each can be found in the Innvotec EIS, SEIS and SITR “Know More About: Tax Efficient Investing” guide.

Income Tax ReliefAvailable at a maximum of 30% on the first £1 million committed in any tax year into a Qualifying Social Enterprise.

Capital Gains Tax Exemption (not available for this investment).Any capital gains realised on disposal of the shares are tax free provided SITR relief has not been withdrawn. This applies after the Relevant Period, which is currently 3 years. Please note that the Fund will invest via unsecured, subordinated Loans and as such there will be no capital gain.

Capital Gains Tax DeferralTax on gains on any assets can be deferred if a qualifying investment (which would include a SITR Qualifying investment into a Qualifying Social Enterprise) is made within one year before or three years after the date of disposal of the asset which gave rise to the gain.

There is no limit to the amount that can be invested in SITR Qualifying Social Enterprises for the purposes of Capital Gains Deferral Relief.

Loss ReliefLoss relief (giving a current aggregate of tax relief of up to 61.5% of the amount originally invested in a SITR Qualifying Social Enterprise) is available should any investment of the Fund incur a capital loss, which can be set against income or capital gains.

Inheritance Tax (“IHT”) Business Property Relief (not available for this investment). 100% IHT relief is available (via Business Property relief), provided that the shares have been held for two years at the time of death. Not available on loans such as those envisaged under the Fund made under SITR.

Tax on Interest Income The investor will be taxed on the total interest received on repayment of his or her commitment to the Fund.

As well as reading the Innvotec EIS, SEIS and SITR “Know More About: Tax Efficient Investing” guide, Investors should also take professional taxation advice.

31

It is important to note a number of points

• Because of its organisational structure YLT is capable of expanding support staff to keep pace with demand.

• This growth has been financed entirely out of the company’s own resources. The only external debt is a small operating overdraft facility of £25,000 which is used to smooth cash flow.

YOUNG LONDON TODAY - P&L HISTORY

-£500,000

-£1,000,000

£0Turnover Gross profit Operating Profit

Cost of Sales Overheads

WagesProperty

OtherOther

£500,000

£1,000,000

£1,500,000

£2,000,000

£2,500,0002016

£2,235,000

(£1,016,000) (£1,120,000)

£98,000

£1,218,000

-£500,000

-£1,000,000

£0Turnover Gross profit Operating Profit

Cost of Sales Overheads

WagesProperty

Other Other

£500,000

£1,000,000

£1,500,000

£2,000,000

£2,500,000

£3,000,000

2015

£2,753,000

£1,220,000

(£1,155,000)

(£1,533,000)

£64,000

APPENDIX 2 - YLT FINANCIALS


32

APPENDIX 3 - FINANCIAL PROJECTIONS FOR EACH OF THE ADOLESCENT CARE CIC COMPANIES*

Item Notes

Income To be charged to main contractors such as Young London Today 150

Professional out-sourced services Direct cost of Specialist services brought in 50

Property Maintenance and cost of ownership All costs associated with the property 42

Management / Directors Fees Supervisory costs 12

Total Costs 104

Interest 3% per annum on £1.5m 45

Profit/(Loss) 1

Year 1 2 3 4 5 6 7 Total

Income

Billed to main providers for Services 75 150 150 150 150 150 75 900

Profit on Property 168 168

Expenditure

Professional Costs and distribution 112 112

Cost of specialist services 25 50 50 50 50 50 25 300

Property Maintenance and cost of ownership 21 42 42 42 42 42 21 252

Management / Directors Fees 12 12 12 12 12 12 12 84

Pre Tax/ Interest Result -95 46 46 46 46 46 185 320

Interest 45 45 45 45 45 45 45 315

Post Tax/ Interest Result -140 1 1 1 1 1 140 5

Assumptions Property or properties are brought and sold mid year, trade starts mid year 1 and ends mid year 7

MODEL ADOLESCENT CARE CIC PROFIT/ LOSS ANNUAL OVERVIEW YEARS 2 TO 6 {£ (,000S)}

MODEL ADOLESCENT CARE CIC PROFIT & LOSS ACCOUNT YEARS 1 TO 7 {£ (,000S)}

* All projections below are simplistic, for indicative purposes and must not be relied on.

33

Year 1 2 3 4 5 6 7

Investor Commitment 1,500

Movement on Debtors -22 -28 50

Post Tax/ Interest Result -140 1 1 1 1 1 135

Interest accrued not paid 45 45 45 45 45 45 45

Purchase of Property -1,310

Sale of Property (at cost) 1,310

Net cash movement in year 73 18 46 46 46 46 1,540

Cumulative cash 73 91 137 183 229 275 1,815

Repayment of Investor loan -1,500

Payment of accrued interest -315

Assumptions Property costing £1.310m needs to be sold for at least £1.506m, a 12.5% uplift in value

Year 1 2 3 4 5 6

Assets

Property 1,338 1,310 1,310 1,310 1,310 1,310

Debtors 22 50 50 50 50 50

Cash 45 91 137 183 229 275

Total 1,405 1,451 1,497 1,543 1,589 1,635

Liabilities

Investor Loan 1,500 1,500 1,500 1,500 1,500 1,500

Accrued interest 45 90 135 180 225 270

Profit & Loss -140 -139 -138 -137 -136 -135

Total 1,405 1,451 1,497 1,543 1,589 1,635

Assumptions Interest on investor loans is at all times covered by retained cash

MODEL ADOLESCENT CARE CIC BALANCE SHEET YEARS 1 TO 6 {£ (,000S)}

MODEL ADOLESCENT CARE CIC CASH FLOW YEARS 1 TO 7 {£ (,000S)}

PROPERTY PRICE MOVEMENT

For Investors to receive their loans back in full, there must be an average increase in property prices across all CICs, of at least 12.5% over the period that their loans are outstanding. On page 24, there is an extract from the Government's House Price Index for England covering the seven years from January 2010 to December 2017 which shows that the historic upward price movement has comfortably exceeded that required for the business model to succeed.


34

APPENDIX 4 - DEFINITION OF AN ELIGIBLE CHILD

An eligible child is defined in paragraph 19B of Schedule 2 to the 1989 Act, and regulation 40 of the Care Planning Regulations as a child who is: (a) looked after, (b) aged 16 or 17, and (c) has been looked after by a local authority for a period of 13 weeks, or periods amounting in total to 13 weeks, which began after he / she reached 14 and ended after he / she reached 16.

The local authority has the same statutory obligations in relation to eligible children as they do towards other children looked after by them, including a duty to maintain their care plan, carry out regular reviews of their case and appoint an independent reviewing officer for the child.

In addition they must:

• Prepare an assessment of the eligible child’s needs with a view to determining what advice, assistance and support it would be appropriate for them to provide him/her (both while he/she is still looked after and after he/she stops being looked after) [paragraph 19B(4) of Schedule 2 to the 1989 Act; the requirements for carrying out the assessment are set out in regulation 42 of the Care Planning Regulations].

• As soon as possible after the assessment of needs is completed, prepare a Pathway Plan (which includes the child’s care plan) [paragraph 19B(4) of Schedule 2 to the 1989 Act; the requirements for preparing the Pathway plan are set out in regulation 43 of the Care Planning Regulations. Keep the pathway plan under regular review [paragraph 19B(5) of Schedule 2 to the 1989 Act].

• Appoint a personal adviser for the 11 Definitions Main Statutory Obligations child [paragraph 19C of Schedule 2 to the 1989 Act; the functions of the personal adviser are set out in Regulation 44 of the Care Planning Regulations].

35

APPENDIX 5- DEFINITION OF A RELEVANT CHILD

Relevant children are defined in section 23A(2) of the 1989 Act as a child who is: (a) not looked after, (b) aged 16 or 17, and (c) was, before he last ceased to be looked after, an eligible child. Regulation 3 of the Care Leavers Regulations prescribes a further category of relevant child who is: (a) not looked after, (b) aged 16 or 17, and (c) at the time he attained the age of 16 was detained (i.e. detained in a remand centre, a young offenders institution or a secure training centre, or any other centre pursuant to a Court order), or in a hospital, and immediately before he was detained or in hospital he had been looked after by a local authority for a period or periods amounting in all to at least 13 weeks which began after he reached the age of 14. Regulation 3 of the Care Leavers Regulations also provides that a child who has lived for a continuous period of six months or more with: (a) his parent, (b) someone who is not his parent but who has parental responsibility for him or, (c) where he is in care and there was a residence order in force immediately before the care order was made, a person in whose favour the residence order was made then that child is not a relevant child despite falling within section 23A(2). Where those living arrangements break down and the child ceases to live with the person concerned, the child is to be treated as a relevant child.

The local authority that last looked after the relevant child must:

• Take reasonable steps to keep in touch with the relevant child [section 23B(1) of the 1989 Act].

• Prepare an assessment of the relevant child’s needs with a view to determining what advice assistance and support would be appropriate for them to provide him (unless they already did so when he was an eligible child) [section 23B(3)(a) of the 1989 Act; the requirements for carrying out the assessment are set out in regulations 4 and 5 of the Care Leavers Regulations].

• As soon as possible after any assessment of needs is completed, prepare a Pathway Plan [section 23B(3)(b) of the 1989 Act; the requirements for preparing the Pathway Plan are set out in regulation 6 of the Care Leavers Regulations] keep the Pathway Plan under regular review [section 23E(1D) of the 1989 Act; the requirements for carrying out reviews are set out in regulation 7 of the Care Leavers Regulations].

• Appoint a personal adviser for the child (unless they already did so when he was an eligible child) [section 23B(2) of the 1989 Act; the functions of the personal adviser are set out in regulation 8 of the Care Leavers Regulations].

• Safeguard and promote the relevant child’s welfare by maintaining him, providing him with or maintaining him in suitable accommodation and providing assistance in order to meet his needs in relation to education, training or employment as provided for in his pathway plan [section 23B(8) of the 1989 Act and regulation 9 of the Care Leavers Regulations; regulation 9 also makes provision about the meaning of “suitable accommodation”].


36

APPENDIX 6 - CURRENT PORTFOLIO OF YLT CONTRACTS

London Borough of Lambeth Tendered Providers:One of 8 approved providersOver the duration of the contractCommenced in 2012 – Current Contract renewal April 2017: Status Successful

Providing:Semi-independent Care Services:

• Looked After Children including those with Challenging Behaviour and Emotional Needs

• 24 Hour support• Mother and baby• Low-medium shared accommodation• Unaccompanied Minors• Adults with Learning disabilities

West London Alliance: Tendered Providers Commenced December 2015 5 Year contractDelivering services to: Barnet, Harrow, Brent, Ealing, Hounslow, Hillingdon

London Borough of Hounslow Preferred provider status on a spot purchase basisCommenced in 2012 – Current



• 24 Hour support• Low-medium shared accommodation• Unaccompanied Minors

London Borough of Ealing

Commenced in 2014 – Current

Providing:Semi-independent Care Services



London Borough of Brent Commenced in 2014 – Current




London Borough of Harrow

Commenced in 2016 – Current




London Borough of Croydon

One of 16 approved providersCommenced in 2012 – Current New contract Award January 2017 – 2 Years




London Borough of Richmond Upon Thames Commenced in 2014 – Current




37

Tri-Borough Contract

Royal borough of Kensington and Chelsea, Westminster and Fulham 5 Year Tender




City of Westminster

Commenced in 2013 – Current Providing:Semi-independent Care Services



London Borough of Hammersmith and Fulham

Commenced in 2016 – Current Providing:Semi-independent Care Services



London Borough of Southwark

Spot Purchase Contract valueCommenced in 2013 – Current Providing:Semi-independent Care Services



Merton Borough Council

Spot Purchase contractCommenced in 2014 – Current Providing:Semi-independent Care Services:


• 24 Hour support• Low-medium shared accommodation• Unaccompanied Minors• Adults with Learning Difficulties Thurrock Borough Council

Spot Purchase (Approval for delivery awarded December 2015)




Sutton Borough Council

Spot Purchase (Approval for delivery awarded January 2016)Coming on stream March 2017





38

APPENDIX 7 - CURRENT YLT OPERATIONS

LONG-TERM PREFERRED SUPPLY

CONTRACTS

DELIVERING SPECIALIST AND GENERAL SUPPORT SERVICES TO YOUNG PEOPLE

DELIVERED IN RENTAL PROPERTY



BUY IN SPECIALIST SERVICES

FROM PROFESSIONALS




LOCAL AUTHORITIES

YLT

CURRENT YLT OPERATIONS

39

LONG-TERM PREFERRED SUPPLY CONTRACTS

GENERAL SERVICES AND MANAGEMENT

PROVISION OF SPECIALIST SUPPORT SERVICES UNDER SUB-CONTRACT

AC1 AC2 AC3 AC14

DELIVERED IN FREEHOLD

PROPERTY

BUY IN SPECIALIST SUPPORT

SERVICES FROM THIRD PARTY

PROFESSIONALSDELIVERED

IN FREEHOLD PROPERTY


PROPERTY


PROPERTY

DELIVERED “IN HOUSE”

LOCAL AUTHORITIES

YLT AND OTHER PROVIDERS

APPENDIX 8 - RELATIONSHIP BETWEEN THE PARTIES


40

APPENDIX 9 - SERVICES TO BE PROVIDED BY EACH CIC.

Introduction - SITR Adolescent Care aged 16-21Leaving care

Important points to note in the delivery of services to Children Leaving Care

• Young people are appropriately matched to housing provisions according to their needs

• Matching takes into full account the experience and qualifications of the staff allocated to work in the home

• Matching takes into account the needs and Risks associated with the other Young People in the home and community

• The Adolescent CARE CICs will not offer same sex provisions• Provisions must be separated to ensure that Adults do not

cohabit with children in care thus creating a requirement for housing for 16-18 and 18-21Year Olds.

• Multi-professionals are required to deliver effective care to a diverse range of challenging behaviours demonstrated by the Young People we are tasked to support

• Services are commissioned by Local Authorities who have assessed the need of each individual Young Person and deem a semi-independent living setting to be appropriate

• Semi-independent living delivers specialist services to Children Leaving Care as Legislated by the Leaving Care Act 2000

• The key purpose of a Semi-independent Living is to transition successfully Care Leavers often with Complex needs into Independent Living in the Community

• Young people who are referred to these provisions do not fall under Ofsted or CQC’s regulatory framework nor does the provision of Services to Leaving Care Teams for Young People aged 16-21

• Local Authorities monitor and inspect provisions for Assurance of Quality, standards and delivery

• All housing provisions must comply with the Legislation of the Housing Act 1988/2004 as well as be equipped as an HMO (House in multiple occupation)

SITR Adolescent Care - Example - Complex Care

CIC 1

• House 1 and 2 • Service: 24 Hour Care• Female only aged 16-18

Typically accommodating Young Females with;• Emotional Behavioural Disorder• High Risk of Child sexual Exploitation• Psychological disorders• Latent/or present yet managed mental health (Diagnosed or •

commonly undiagnosed)• Self Harm• Low self esteem• Drug and alcohol abuse• Absconding behaviour• Sexualised behaviour

Example of Staffing Matrix and typical qualifications required for delivery• Female only staffing matrix

• Social work qualified manager (Masters) and staff with expertise in;

• Emotional and Developmental Psychology, Maternal depravation, separation and loss

• Child psychologist • Qualified in; Lifelong teaching, adolescent mental health,

counselling, Child and Young people services qualification, family reconciliation work

• Level 5 qualified Life coach ; Youth Work• Social development and practical living skills• Specialist IAG (information advice and guidance)

CIC 2

• House 3 and 4• Service:24 Hour Care• Male only 16-18

Typically accommodating Young males with;• Persistent offending behaviour• Oppositional defiance disorder• Beyond parental control• Latent/or present yet managed mental health (Diagnosed or

commonly undiagnosed)• Gang related involvement• Drug and alcohol abuse• Lack of attainment and engagement• Emotional Behavioural Disorder and extreme challenging

behaviour

Staffing Matrix and typical qualifications required for delivery• Social work qualified manager (Masters) and staff with

expertise in;• Cognitive behavioural therapy, Emotional and Developmental • Psychology , counselling, Young Offenders• Managing persistent offending and reduction in Anti-social

behaviour, MAPPA training • Child psychologist• Gang specialist including county lines awareness• Level 5 qualified Life coach ; Youth Justice/intervention• Social development and practical living skills• Specialist IAG (information advice and guidance)

SITR Adolescent Care - Challenging Behaviour

CIC3

• House 5 and 6• Service: 24 Hour Care• Female Only aged 18-21

Typically accommodating Young Females with• Emotional Behavioural Disorder• High Risk of Child sexual Exploitation• Psychological disorders• Latent/or present yet managed mental health (Diagnosed or

commonly undiagnosed)• Self Harm• Absconding behaviour• Sexualised behaviour

41

Example of Staffing Matrix and typical qualifications required for delivery• Female only staffing matrix• Social work qualified manager (Masters) and staff with

expertise in;• Transition to adulthood• Self concept and identity• Clinical psychologist• Emotional and Developmental Psychology, Maternal

depravation, separation and loss, • Qualified in; Lifelong teaching, adolescent mental health,



CIC4

• House 7 and 8• Service: 24 Hour Care• Male only aged 18-21

Typically accommodating Young males with;• Persistent offending behaviour• Oppositional defiance disorder• Beyond parental control• Latent/or present yet managed mental health (Diagnosed or •

commonly undiagnosed)• Gang related involvement• Lack of attainment and engagement• Sexualised behaviour• Emotional Behavioural Disorder and extreme challenging

behaviour

Staffing Matrix and typical qualifications required for delivery• Social work qualified manager (Masters) and staff with

expertise in;• Transition to adulthood• Self concept and identity • Clinical psychologist• Cognitive behavioural therapy, Emotional and Developmental • Psychology , counselling,• Managing persistent offending and reduction in Anti-social

behaviour, MAPPA training • Gang specialist including county lines awareness• Level 5 qualified Life coach ; Youth Justice/intervention• Social development and practical living skills• Specialist IAG (information advice and guidance)

SITR Adolescent Care - Expectant Mothers

CIC5


Typically accommodating Young Females with;• Mother and baby support

• Expectant mothers• Child in need (section 38 of the Children’s Act)


expertise in;• Attachment Development, Assessing and supporting with

court processes• Parenting Assessments and skills development• Practical living skills • Emotional and Developmental Psychology, Maternal

depravation, separation and loss, • Qualified in; Lifelong teaching, counselling, Child and Young

people services qualification, family reconciliation work• Level 5 qualified child care and development • Social development and practical living skills• Specialist IAG (information advice and guidance)

CIC6


Typically accommodating Young Females with;• Mother and baby support • Expectant mothers• Child in need (section 38 of the Children’s Act)


expertise in;• Attachment Development, Assessing and supporting with

court processes• Parenting Assessments and skills development• Practical living skills • Emotional and Developmental Psychology, Maternal •

depravation, separation and loss, • Qualified in; Lifelong teaching, counselling, Child and Young

people services qualification, family reconciliation work• Level 5 qualified child care and development • Social development and practical living skills• Specialist IAG (information advice and guidance)

SITR Adolescent Care - Unaccompanied Asylum Seeking Children

CIC7

• House 13 and 14• Service:24 Hour support or shared accommodation• Male only 16-18

Typically accommodating Young males with;• Age assessments and Immigration matters• Home office requirements/appeals


42

• Integration and Orientation • Post traumatic stress disorder• Separation and loss• Family separation and location• Human Trafficking• CSE• Translators

Staffing Matrix and typical qualifications required for delivery• Social work/manager (Masters) and staff with expertise in;• Law specialist• Public Health professionals specific to child refugees, Cognitive • behavioural therapy, Emotional and Developmental Psychology • , counselling,• Anti-terrorism intervention, bi-lingual/cultural awareness• Human Rights and Equality act• Gang intervention• Level 5 qualified Life coach ; Youth Justice/intervention• Social development and practical living skills• Specialist IAG (information advice and guidance)

CIC8

• House 15 and 16• Service:24 Hour support or shared accommodation• Female only 16-18

Typically accommodating Young females with;• Age assessments and Immigration matters• Home office requirements/appeals• Integration and Orientation • Post traumatic stress disorder• Separation and loss• Family separation and location• Human Trafficking• Child sexual exploitation intervention• Female genital mutilation• Forced marriage • Translators

Staffing Matrix and typical qualifications required for delivery• Social work/manager (Masters) and staff with expertise in;• Law specialist• Public Health professionals specific to child refugees, Cognitive

behavioural therapy, Emotional and Developmental Psychology , counselling,

• Anti-terrorism intervention, bi-lingual/cultural awareness• Human Rights and Equality act• Level 5 qualified Life coach ; Youth Justice/intervention• Social development and practical living skills• Specialist IAG (information advice and guidance)

SITR Adolescent Care - Transgender and identity

CIC9

• House 17 and 18• Service:24 Hour support or shared accommodation

• Female only 16-18Typically accommodating Young females with;• Gender specific intervention• LGBT • Transgender or identity matters • Integration and isolation• Low self esteem• Risk of violence from others

Staffing Matrix and typical qualifications required for delivery• Social work/manager (Masters) and staff with expertise in;• Child development worker• Human Rights and Equalities specialist• Emotional and Developmental Psychology , counselling, Public • Health and Wellbeing professionals• Level 5 qualified Life coach ; Children and Young People

services• Social development and practical living skills• Specialist IAG (information advice and guidance)

CIC10

• House 19 and 20• Service:24 Hour support or shared accommodation• Female only 16-18• Typically accommodating Young males with;• Gender specific intervention• LGBT • Transgender or identity matters • Integration and isolation• Low self esteem• Risk of violence from others

Staffing Matrix and typical qualifications required for delivery• Social work/manager (Masters) and staff with expertise in;• Child development worker• Human Rights and Equalities specialist• Emotional and Developmental Psychology , counselling.• Public Health and Wellbeing professionals• Level 5 qualified Life coach; Children and Young People

services• Social development and practical living skills• Specialist IAG (information advice and guidance)

SITR Adolescent Care - Adolescent Mental Health

CIC11

• House 21 and 22 • Service: 24 Hour Care• Female only aged 16-18

Typically accommodating Young Females with;• Presenting/Latent mental health issues • High risk self harming behaviour• Psychotic episodes• Lack of engagement• Sexualised behaviour• Attachment disorders

43

• ADHD• Challenging behaviour• Anti-social behaviour• Example of Staffing Matrix and typical qualifications required •

for delivery• Female only staffing matrix• Social work qualified manager (Masters) and staff with

expertise in;• Child and adolescent mental health, Emotional and

Developmental Psychology, Maternal depravation, separation and loss, • Child psychologist • Qualified in; Lifelong teaching, adolescent mental health,


• Level 5 qualified Life coach Children and Adolescents• Social development and practical living skills• Specialist IAG (information advice and guidance)

CIC12

• House 23 and 24• Service: 24 Hour Care• Male only aged 16-18

Typically accommodating Young Males with;• Presenting/Latent mental health issues • High risk self harming behaviour• Psychotic episodes• Lack of engagement • Sexualised behaviour• Attachment disorders• ADHD• Challenging behaviour• Anti-social behaviour

Example of Staffing Matrix and typical qualifications required for delivery• Social work qualified manager (Masters) and staff with

expertise in;• Child and adolescent mental health, Emotional and

Developmental Psychology, Maternal depravation, separation and loss,

• Child psychologist • Qualified in; Lifelong teaching, adolescent mental health, •


• Level 5 qualified Life coach Children and adolescents• Social development and practical living skills• Specialist IAG (information advice and guidance)

SITR Adolescent CareHealth and Mild Learning Disability

CIC13

• House 25 and 26• Service: 24 Hour Care• Female only aged 16-18

Typically accommodating Young Females with;• Global learning delay• Mild Autism• ADHD• Epilepsy• HIV• Diabetes• Other challenging health related matters• Challenging behaviour• Anti-social behaviour


expertise in;• Child and adolescent development, Emotional and


• Child psychologist • Qualified nursing or Health training• Qualified in; Lifelong teaching, adolescent mental health,



CIC14

• House 27 and 28 • Service: 24 Hour Care• Male only aged 16-18

Typically accommodating Young Males with;• Global learning delay• Mild Autism• ADHD• Epilepsy• HIV• Diabetes• Other challenging Health Related matters• Challenging behaviour• Anti-social behaviour

Example of Staffing Matrix and typical qualifications required for delivery• Social work qualified manager (Masters) and staff with

expertise in;• Child and adolescent development, Emotional and


• Child psychologist • Qualified nursing or health training• Qualified in; Lifelong teaching, adolescent mental health, •




44

APPENDIX 10 - HMRC ADVANCE ASSURANCE LETTERS

45


46

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47

“CAPITAL PRESERVATION,

AN AFFORDABLE COUPON & SITR TAX

BENEFITS”

Creative and Print by Palladium Results Ltd – w

ww.palladium

solutions.comCreative and Print by Palladium

Results Ltd – ww

w.palladiumsolutions.com

Further Information

If any further information relating to the Fund is required please contact the Fund Manager, Innvotec Limited.

Corporate, Marketing & SalesPainters Hall

9 Little Trinity LaneLondon

EC4V 2AD

t:+44 (0) 203 026 1883e: [email protected]

Admin & Client SupportSuite 310

Business Design Centre52 Upper Street

LondonN1 0QH

t: +44 (0) 207 630 6990 e: [email protected]

Fund ManagerInnvotec Limited

The Adolescent Care SITR Fund e: [email protected]

www.innvotec.co.uk

THE ADOLESCENT CARE SITR FUNDMANAGED BY INNVOTEC

VR0218b

Marketing Adviser

Palladium Results Ltd4 The Willows

Mill Farm CourtyardBeachamptonMilton Keynes

MK19 6DS

www.palladiumsolutions.com

t: +44 (0) 1908 566800e: [email protected]

Strategic Partner

Young London Today Limited 85 Gloucester Road,

Croydon, CR0 2DN

www.young-london.org

t: +44 (0) 20 8684 7117e: [email protected]

Legal Adviser

Stone King LLP 91 Charterhouse Street

LondonEC1M 6HL

www.stoneking.co.uk


Property Adviser

Chestertons LimitedSt Magnus House,

7th Floor, 3 Lower Thames Street,

London, EC3R 6HD.

www.chestertons.com


Innvotec Limited is a registered company in England & Wales. Registration Number: 02030086.Registered Office: Amelia House, Crescent Road, Worthing, England, BN11 1QR.

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