Tag: Social Impact Bonds

On November 23^rd the Cabinet Office launched two initiatives designed to stimulate the market in social impact bonds (SIBs) and similar payment by results (PBR) schemes: the Centre for Social Impact Bonds (an online resource for those considering how to do this stuff); and the Social Outcomes Fund – which may be of more interest to commissioners and others since it involves government putting up some money to stimulate the market in SIBs.

We played a small part in the development of the Social Outcomes Fund, since it was one of the recommendations made in the report we co-authored with the Cabinet Office (in a previous life) on the feasibility of applying SIBs/PBR to troubled families.  The principle of a SIB is that interventions to solve a social problem are funded from future savings to the commissioner and others.  One of our findings was that it is difficult to persuade those who benefit from a successful SIB or PBR scheme and are not the main commissioner to make a contribution.

This was also the experience of Essex County Council when trying to get contributions to its SIB aimed at keeping older children out of care or custody (the launch of which,  along with another SIB aimed at homeless rough sleepers in London, was also announced at the same event)

So the purpose of the fund – as made clear by Ministers at the launch event – is to enable those wanting to set up a SIB to apply for the fund if they cannot get contributions direct from other bodies.  The Cabinet Office also hope that the Fund will help grow the market for SIBs and similar schemes – which have been slower to take off than many hoped   Other sources of funding are starting to emerge which have similar aims – such as the impending Results Fund being set up by Big Society Capital.

In our view (we could hardly say otherwise) the Social Outcomes Fund is undoubtedly a good thing.  The developing debate is whether SIBs and similar schemes will ever get to the sort of scale where they can make a real difference to social outcomes and – by extension – start to really impact on the costs of social problems.  The general view at the launch from all sides (investors, commissioners and policy makers) seemed to be that things have moved on a good deal over the past couple of years, but there is still a way to go.