Transcript Presentation 3
OPPORTUNITIES FOR SOCIAL IMPACT BONDS: PROGRESS IN WORCESTERSHIRE
Ben Jupp
Lauren Fulton
Social Finance is authorised and regulated by the Financial Conduct Authority FCA No: 497568
INTRODUCTION AND TERMINOLOGY 1) Social Finance
an independent not-for profit organisation 2
2) social investment 3) Social Impact Bonds
social investment
money that is provided on the basis of social and financial return
Social Impact Bonds
One way in which social investment is deployed; a social investment “product”
other forms of social investment
©Social Finance 2013
KEY PRINCIPALS OF SOCIAL IMPACT BONDS
Social Impact Bonds are a response to systematic underinvestment in prevention across public services.
• • • • • • The Social Impact Bond is a means of investing in prevention services where improved social outcomes are likely but not certain. Social Impact Bonds are contracts with public sector commissioners under which government commits to pay for improved social outcomes.
On the back of this contract, investment is raised from non-governmental investors.
This investment is used to pay upfront for a range of interventions to improve social outcomes.
Investors are repaid only if successful outcomes are achieved. Investors stand to lose some or all of their capital if positive outcomes are not achieved.
The investor takes the risk that the interventions do not deliver the desired outcomes. The greater the improvement, the greater the financial return to investors.
SOCIAL IMPACT BONDS BRING NEW FUNDING TO COMPLEX SOCIAL PROBLEMS AND FOCUS ALL STAKEHOLDERS ON PREVENTION
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UK COMMISSIONED SIBS
4 11 7 12 15 2 13 5 1 14 10 9 3 6 8 ©Social Finance 2013
Source: emmatomkinson.com
11 12 13 14 15 4 5 6 1 2 3 7 8 9 10
Ministry of Justice – Peterborough
Reducing reoffending
DWP – West Midlands
Disadvantaged 14-24 year-olds
DWP – Stratford and surrounds
Disadvantaged 14-24 year-olds
DWP – Perthshire and Kinross
Disadvantaged 14-24 year-olds
DWP – Nottingham City
Disadvantaged 14-24 year-olds
DWP – Shoreditch, London
Disadvantaged 14-24 year-olds
DWP – Greater Merseyside
Disadvantaged 14-24 year-olds
Essex County Council – Essex
Children at risk of going into care
Greater London Authority – London
Rough sleepers
DWP – West London boroughs
Disadvantaged 14-15 year-olds
DWP – Cardiff and Newport
Disadvantaged 14-15 year-olds
DWP – Greater Manchester
Disadvantaged 14-15 year-olds
DWP – Thames Valley
Disadvantaged 14-15 year-olds
CVAA – England-wide
Adoption
Manchester City Council
Children in Care
In development
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LONELINESS AS AN AREA OF UNDERINVESTMENT
Loneliness has an equivalent impact on mortality as smoking 15 cigarettes a day.
Preventing loneliness and isolation should enable older people to stay active and reduce periods of ill health and disability. In developing the Social Impact Bond we have reviewed a number of impacts in order to assess the likely benefits in reducing loneliness. Mechanism which directly impacts service usage. Lack of support structures
Potential value to local and national stakeholders
GP visits, A&E visits, hospital admissions Increased likelihood of entry to care Dementia Loneliness* Increased risk of developing LTCs that lead to additional expenditure Depression Less active lifestyles Diabetes Stroke Short term health care costs of treatment Medium term health and social care costs of treatment Loss of quality adjusted life years
Value included in financial model
CHD * For the purposes of modeling, Social Finance has focused on the impact of loneliness, where the research base is stronger than isolation per se. Clearly there is a relationship between the two. ©Social Finance 2013 Increased disability Attendance Allowance claims 5
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A SOCIAL IMPACT BOND TO REDUCE LONELINESS AMONGST OLDER PEOPLE
A Social Impact Bond would be an appropriate tool to develop a targeted service to reduce loneliness.
6 Loneliness can be measured robustly using the Revised UCLA short form survey of loneliness.
There is a mixed evidence base for interventions that reduce loneliness. The oversight and rigour brought by social investors can support the development of an effective intervention.
Payments made on the basis of average reductions in loneliness scores align interests of commissioners and providers.
Outline approach INVESTORS
Funding
Lead delivery organisation
Payments on basis of outcomes
Commissioners - CCGs, Local authorities, central government
Reduction in loneliness
Befriending Group Activity and Exercise CBT for most isolated Peer support groups Reduced loneliness
©Social Finance 2013
THERE HAS BEEN SIGNIFICANT NATIONAL AND LOCAL INTEREST IN THE BUILDING CONNECTION SIB
• • • • • There has been significant national and local interest in the Building Connections Social Impact Bond.
Department of Health funded initial cost/benefit modelling work through its Social Enterprise Investment Fund.
Cabinet Office has committed to contributing up to £1 million of outcomes funding for reductions in loneliness through the Social Outcomes Fund.
Development partners Nesta and the Calouste Gulbenkian Foundation have committed grant funding for testing areas of innovation within service delivery and for an independent evaluation of the service impact on health outcomes.
Investors, including charitable trusts and foundations, have been introduced to the Social Impact Bond design and are ready to conduct due diligence once procurement begins.
Interested commissioners, including other Local Authorities and Clinical Commissioning Groups, have initiated conversations about replicating the model. 7 ©Social Finance 2013
PROGRESS IN WORCESTERSHIRE
• • • • • • • • • • Information is available on WCC Portal PQQ will be published once timeline confirmed Marketplace engagement events will take place Maximum of 5 bidders invited to tender Bids will demonstrate ability to provide investment and delivery Outcome-based contract Prime contractor, consortia, single provider model Aim is for winning bid to be awarded by Oct/Nov Project to commence by the end of the year Outcomes evident and paid approx. 6/18 months later ©Social Finance 2013 8