Download - Centre for Economic and Social Inclusion: Social Impact Bonds: Can they work for the unemployed?
Centre for Economic and Social Inclusion: Social Impact Bonds: Can they work for the unemployed?
Social Impact and Community Budgets: Designing a SIB for vulnerable young people in Essex
Roger Bullen
Head of Partnership
Essex County Council
Keith Starling, Chief Financial Officer,
Big Society Capital
The Essex SIB:
Target: Young people on the edge of care or custody Intensive evidence based intervention: 2 Multi Systemic
Therapy (MST) Teams Provider: Action for Children SIB intermediary: Social Finance LTD Special purpose vehicle: Children’s Support Services LTD Contract: 5 years operational 8 years payment Social investment: Initial £3.1m growing to around £5.9m
throughout project life
The Essex SIB:
Referral capacity: 380 families Performance target: 110 young people diverted from
care or custody Projected savings: £17.3m gross over the life of the
scheme Costs: Capped at £7m Mobilised: April 2013
The Essex SIB
Action for Children
Evolution Fund Services
Service Users
Outcomes Contract
CSSL
£3.1 million
Investors
ECC
Ongoing operating funds
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2 3
4Social Finance
Service Contracts
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2
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• Board of Directors
CSSL and ECC enter Outcomes Contract
Investors fund CSSL
Funds released to service providers according to Service Provider Agreement
ECC returns a % of savings from reduced cost of care placements
Why Essex took this approach:
Need: high numbers, high cost, poor outcomes Services: shift towards prevention, building
family strengths and resilience, reducing future dependence and demand
Innovation: new funding mechanism, services new to Essex
Investment: upfront, off the balance sheet Savings: unlocking acute spend, efficiencies
and re-investment Risk: risk of failure deferred to investor Performance: Enhanced by PbR approach System change: sustainable and outcomes
driven, outcomes-led commissioning, council transformation
Feasibility study:
Referrals: numbers, reasons, source Cohort: characteristics, age, gender, family circumstances In care numbers: entering care or custody, not entering
care or custody, Care journeys: destinations and outcomes, length of stay Interventions: what works, meets needs, where’s the
evidence Applicability: appropriateness of Social Impact Bond
Control group review:
Methodology: historical case review 650 cases from an appropriate referral window, at least 30 months in the past
Eligibility filters: age, case type, MST exclusionary criteria
Benchmark data: establishing performance pre-MST: The number entering care The number that didn’t enter care The aggregate care days spent Average length of stay in care
Primary Outcome Metric:
Primary outcome triggers payment:
Outcome: The reduction in aggregate care days spent as
compared to the control review figure, including custody episodes
Duration: To the maximum of the average length of stay as
observed and set by the control group review and feasibility study
Secondary Outcome Metrics:
Secondary outcomes measured but currently do not trigger payment:
Youth Offending: reduced levels of YOS referralEducation: improved attainment, increased attendance, stability of specialist placementsHealth and wellbeing: Strength and difficulties questionnaire (STQ) identifying improved sense of well-being
Key learning points: Affordable: cost benefit comparison, value of
risk transfer, performance incentives Attributable: intervention, to outcome, to
savings benefit Cashable: payment realised from
commissioning budget where saving is made Simple: understood by all stakeholders Tactical: targeted where impact will be greatest
and last longest Marketable: use development to shape and
grow market from commissioner perspective Replicable: future application supported by
model design
The Essex Experience – next steps
December 2011, Essex selected as a Community Budget pilot area.
June 2012, Social Finance Ltd, a Social Investment Finance Intermediary (SIFI), engaged by the Whole Essex Community Budget Programme (WECB) to explore role social investment could play in securing external investment to fund the delivery of certain services and improve outcomes.
Opportunities to be identified as suitable for further investigation and being developed within WECB programme. Pipeline approach.
Dynamic purchasing system established to enable timely procurement of consultancy services and support the development of a niche supplier market.
Mainstreamed within procurement processes.
• Big Society Capital’s mission is to build a sustainable social investment market to help social sector organisations increase their impact on society
• We do this by being an investor in the market though social finance intermediaries, investing up to £600m over the next 4/5 years
• Also by being a market champion, to increase awareness and confidence in social investment
• Social impact bonds are a critical part of the social investment market and will no doubt grow in number as the market develops
• BSC has invested in the first SIB fund: the Bridges Social Impact Bond Fund
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Investor Perspective – Big Society Capital
Investor Perspective – Big Society Capital
• Big Society Capital invests to create social impact, to make a financial return and to build the social investment market
• The Essex SIB has strong social impact by keeping children out of care and custody, as well as improving parenting and rebuilding positive relationships
• This is the first SIB commissioned by a local authority and so will drive change in the finance of public services
• The track record and evidence base that is developed during the programme will be vital in the development of the market
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How is it going?
• Two teams are in place - North and South Essex - and are working with families
• Stakeholder management – Action for Children, Essex CC and MST – is receiving focus and is going well
• Systems for data analysis have been developed
• Cost budget being carefully managed
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• Questions and discussion