With the social impact bond market maturing, there’s a great chance to take stock of what’s worked and what hasn’t. Investment Associate Caroline Hickson shares what we learned at a recent Numbers for Good workshop.
Outcomes-based commissioning involves commissioners paying only for the achievement of certain outcomes, rather than merely for a service that may or may not lead to the desired result. A social impact bond (SIB) is a way of financing this approach so that social investors, rather than providers, take on the risk that an intervention may not work.
Having worked on two SIBs ourselves (Fusion Housing and Home Group), we at Numbers for Good know first-hand the benefits that this innovative approach can provide for commissioners, providers and, most importantly, beneficiaries. The last year has seen the conclusion of the delivery period for twelve of the UK’s 32 SIBs, and we’ve been encouraged by the positive initial stakeholder feedback and the growing number of locally-commissioned SIBs (seven due to start in the coming months, adding to the eleven already commissioned).
It’s clearly an exciting time for the SIB market, but we also know that for commissioners it’s sometimes difficult to understand exactly how such an approach works – what’s it really like to commission on the basis of outcomes? So, on a wet and rainy day in September we brought together a selection of local authorities from across London to hear from those who’d been there, done that with SIBs. Our great speakers included:
– David Eastwood of the Greater London Authority, currently overseeing the London Rough Sleepers SIB where delivery finished late last year;
– Jo Hay, CEO of Teens & Toddlers, a service provider for two SIBs focussed on NEETs that have concluded delivery; and
– Alina Sellman, a Senior Policy Advisor at the Cabinet Office, currently overseeing the £80m Life Chances Fund.
Of course, Numbers for Good’s very own Matt Black was there to host.
What did we learn? Well, although SIBs and outcomes-based commissioning are thought of complex (and David did emphasise the importance of adequate preparation ahead of a SIB), all of our speakers did note that a) it doesn’t have to be that way and b) we are now in a position to take advantage of the expertise and experience of others. As Alina said, the most important thing is just to decide the outcomes you want to achieve and the cohort you want to help. If you are a commissioner interested in young people, there are already several existing SIB structures that you could use as a basis and providers such as Teens & Toddlers who understand the SIB ways of working. Moreover, you can get advice from the Government Outcomes Lab and Life Chances Fund teams – not to mention intermediaries like us.
After hearing from our speakers, we posed some questions to help identify precisely what outcomes were of most importance to commissioners to (hopefully) help simplify the process as Alina suggested. A common question for commissioners thinking about outcomes-based commissioning is “where can you see savings?”, but an effective SIB should also drive improvements in public services. Focussing on current social issues was therefore also key in our discussions, and children in care was identified by several commissioners as an area where there is both a huge financial and social cost. Unsurprisingly, we didn’t come to any immediate answers to these problems in a two-hour workshop – but the new approach was certainly leading to some interesting conversations that we hope will continue. While we always keep in mind, as David pointed out, that a SIB should work alongside existing services rather than replacing them, we’re looking forward to exploring further if and how a SIB approach could help commissioners in London and elsewhere.
The Life Chances Fund will next issue a call out for Expressions of Interest on 2-4 January 2017, with these due by 28 February 2017. The themes will be young people and early years. Future themes will be healthy lives and older people’s services. Previous themes were children’s services and drug and alcohol dependency.
If you’re interested in talking more about social impact bonds or outcomes-based commissioning, don’t hesitate to get in touch via email@example.com or call us on 020 7148 6741.