Transcript SIBs Update

Drug Rehabilitation and Payment by Results:
The role of social investment
27 April 2011
Emily Bolton – [email protected], 0207 667 6377
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PRIVATE & CONFIDENTIAL
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Our work
Social Finance designs financial structures that enable private sector capital to reach the social sector
Government
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Investors
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Trusts & Foundations
High Net Worth Individuals
Private Banks
Mass Affluent
Institutional Investors
Central Government
Local Government
Commissioners
Ministries
Policy makers
Social
Finance
Research & Development
Financial Structuring
Capital Raising
Social Service Providers
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Children in Care
Financial Inclusion
Criminal Justice
Health Care
Affordable Housing
Key social issues
Long-term Social
Change
Social Investor
Market Growth
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Voluntary Sector
Development
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Our work
Social Impact Bond to reduce
re-offending amongst short
sentence offenders from HMP
Peterborough
£640,000 Loan Note at 3.50%,
as cornerstone of more than
30,000 affordable loans
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Seven month study to
develop commercially viable
budgeting bank accounts for
low income consumers
Developing an online
financial solution for families
with disabled children
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What is a Social Impact Bond?
A Social Impact Bond is a contract with the public sector in which it commits to pay for
improved social outcomes
On the back of this contract, investment is raised from socially-motivated investors
This investment is used to pay for a range of interventions to improve the social outcomes
The financial returns investors receive are dependent on the degree to which outcomes
improve
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The Social Impact Bond and
reoffending
Peterborough Pilot
Investors
% of cost
savings
from
reduced reoffending
Ministry of
Justice
• Social need
• Commissioner
£5 million
• Target population
Social Impact Bond
Reduction in
reconviction events
Ongoing operating funds
• Target outcome
• Measurement
St Giles
Trust
Ormiston
C&F Trust
YMCA
Other
Interventions
• Interventions
Collaborative service provision
• Evidence base
3,000 male short sentence prisoners
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Social investment and PbR pilots
Social investment funds activities that generate positive social outcomes
We believe that such investment can facilitate systemic change in the drug treatment
system and help to improve outcomes for those suffering from dependency
The PbR pilots are an opportunity to pilot a new approach to drug treatment that has
increased funding from rehabilitation and an ambition to foster innovation
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How could increased funding
improve recovery rates?
Increased
funding for
“wraparound”
services
• Of the local partnership funding allocated to English DAATs in 2008/09, less than 10% was spent
on “wraparound” services, including user/carer involvement and harm reduction strategies (1)
• Social investment could fund increased services for families, peer mentorship and transitional
employment
Enable small
organisations to
participate in
PBR
• Many VCS organisations do not have the working capital to fund service delivery until outcomes
can be measured and payments made. Also, these organisations may be unable to bear the
outcomes risk.
• Social investment could provide risk capital to enable small organisations to participate in the
PbR pilots
Fund local best
practice to scale
• “Nearly every problem has been solved by someone, somewhere. The frustration is that we can’t
seem to replicate [those solutions] anywhere else” – Bill Clinton(2)
• Numerous innovative local models funded on a small scale and often, the barrier to delivering
these good services to more service users is a lack of upfront capital to invest in increased
staffing and infrastructure.
Support for an
evidence base to
assess needs
and
effectiveness
• Today there is limited data on the long-term success of service users and the effectiveness of
some interventions
• Social investment can fund large-scale measurement of the progress of service users that
informs future service delivery and the development of new services (both in and posttreatment)
• These measurement systems are necessary for investor reporting
Sources: 1) United Kingdom Focal Point Report 2010, October 2010; 2) “Growing Pains”, Lynn Olsen, Education Week November 1994;
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How can Social Finance help?
The following elements are necessary for a SIB contract based on outcomes:
Outcomes that a
commissioner is
willing to pay for
• We have commissioned a research report to understand a range of possible
outcome metrics that can be used to measure the success of drug treatment
in the community
• This report is intended for publication and should be available in the summer
An operating
model to deliver
these outcomes
• We have met with a range of service providers, commissioners and experts in
to learn about successful interventions in more detail
• This represents initial research which can be developed according to the
needs of a specific target population
Savings generated
for government
and a return for
investors
• We have carried out initial financial modelling to estimate potential savings
that could accrue to government as a result of improved treatment outcomes
• To further develop the financial case for a SIB intervention, it would be
necessary to tailor this analysis to a specific area using local data
We would welcome the opportunity to collaborate at a local level to develop this
funding model in more detail
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