Transcript Social investment and pbr

LESSONS FROM THE ESSEX SOCIAL IMPACT BOND
SO FAR…
1ST JULY 2013
Yvonne Campbell, Essex SIB Director, CSSL
[email protected]
Roger Bullen, Head of Partnerships, Essex County Council
[email protected]
Social Finance is authorised and regulated by the Financial Service Authority FSA No: 497568
EVOLVING UK SOCIAL INVESTMENT MARKET 2001-2013
•Social investment is the provision of capital for social as well as financial returns
•The UK social investment market is comprised of a number of financial intermediaries and
funds
•Trusts and foundations are core to the social investor landscape but recently we have seen
local authorities, community foundations and housing associations also investing in SIBs
Bridges Social
Entrepreneurs
Fund launched
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WHAT IS SOCIAL INVESTMENT?
Social investment is repayable funding which yields both social and financial returns.
Social investors can bring expertise, rigour and capacity to the services they support
New service
delivery
landscape
Impact
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Service
integration &
partnerships
Investment in
management,
skills & info.
Controlled
innovation
Due diligence
rigour
Immediate
capital
requirements
Active investment
Active social investment has the potential to transform services, not just provide
funding.
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Finance 2012
INTRODUCTION TO SOCIAL IMPACT BONDS
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• The Social Impact Bond is a means of investing in
intensive 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.
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SOCIAL IMPACT
BONDS BRING NEW
INVESTMENT TO
BEAR ON SOCIAL
ISSUES, AND ALIGN
ALL PARTIES
AROUND A
COMMON GOAL.
RATIONALE FOR A SIB
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Social Impact Bonds provide up front funding to pay for additional services to help
improve outcomes for service users, with investors risking their money based on
the outcomes that will be achieved
A SIB is…
A SIB is not…
• A way of tackling social problems that
require a range of interventions
• Payments for failure – if no social impact
is achieved investors lose their money
• Up front funding for service delivery
• Debt or grant funding for service
providers
• Only going to achieve returns for
investors if social impact is achieved
• An attempt to make more nongovernmental money available to the
social sector
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• A new form of PFI – investor returns
are contingent on achieving socially
beneficial outcomes
WHAT ATTRACTS SOCIAL INVESTORS TO SIBS
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Social issue
Local interest
All investors are committed to
improving outcomes for
vulnerable young people
Some are keen to support their
local communities e.g.
Community Foundations
Essex SIB Investors
Engagement
Some like to be involved in
business case development
Intervention
Scaling up promising
approaches which have
potential to transform
outcomes and reshape service
delivery
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Learning and innovation
Essex SIB attracted Belgian
foundation and German social
investment fund
Applies investment
approach to delivering
improved social
outcomes
Rigour, focus, data analysis
CASE STUDY: ESSEX EDGE OF CARE SIB
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1 CSSL and ECC enter
Outcomes Contract
Investors
22 Investors fund CSSL
3 Funds released to pay for
22
£3.1 million
•
Board of Directors
Social
Finance
CSSL
1
1
Outcomes
Contract
44
Service
Contracts
33
Ongoing operating
funds
ECC
service delivery. CSSL
contracts with service
provider in Services
Agreement
ECC returns a % of savings
4
4
from reduced cost of care
placements
Essex SIB Investors
Action for
Children
Evolution Fund
Services
Service Users
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SUCCESSFUL COLLABORATION WITH SERVICE PROVIDERS
Governance
• CSSL (new company set up for Essex SIB) commissioned Action for Children to deliver
MST, funded by SIB
• CSSL Board oversees performance of SIB
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3 investors, MST expert, Social Finance
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Action for Children attend each quarter
• MST Project Board
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Strategic collaboration between ECC, Action for Children and CSSL
• MST Operational Steering Group
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Brings together operational leads for services relevant for MST
• MST Oversight Committee
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Set up and facilitated by MST Service
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ROLE OF SIB DIRECTOR
Drive forward Implementation
Performance Management
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Supporting operations
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Contract management
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Reporting to CSSL Board and MST Project Board
Data Management
• Direct and wider outcomes tracking framework
• Negotiating access to data
• CSSL Online - aggregates and analyses performance data to inform service delivery
Communication
• Building and maintaining relationships
• Regular communication necessary to bridge cultures
Wider Picture
• Referral pathway
• Finding the fit amongst existing services
• Step-down provision
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ESSEX SOCIAL IMPACT BOND – CORE INTERVENTION
Multisystemic Therapy (MST) forms the core intervention in the SIB.
It is one of the most promising interventions for the adolescent edge of care and
custody population.
MultisystemicTherapy (MST)
Objective
• Reduce anti-social behaviour and prevent out-of-home placement – care or custody
How it works
• Combines parenting support with practical assistance and a therapeutic approach to rebuilding
relationships between the young person, the family and the networks around them.
• Delivered by a team of family therapists, each of whom work with around 10 families per year in the
home or community, providing 24/7 support.
Eligibility Criteria
• Adolescents aged 11-16, displaying anti-social or offending behaviour or other conduct disorders
• At risk of an out-of-home placement
Evidence Base
• Good evidence from the US for MST on crucial factors relevant to the edge of care population, e.g.
improved parental supervision and management, reduction in child conduct problems.
• 10 years running in the UK, with initial indications of positive impact on care outcomes. 1
Source: www.mstservices.com/outcomestudies.pdf
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ADDITIONAL LESSONS SO FAR
Evidence based programmes
• Defined models build confidence with investors but are a starting point
• Benefits of quality assurance and fidelity
Referrals
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Stakeholder buy-in and continual communication at all levels required
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An effective referral pathway is essential
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Right cases at the right time
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Parts of the process and responsibilities at which stage,
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Ensuring no delays in families getting the help they need due to process
Relationships
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Point person within the LA as SIB Director’s main contact vital to ensure co-ordination
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Increasing awareness of SIB service(s) to improve engagement and flow of referrals
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ADDITIONAL LESSONS SO FAR
Data
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Why are you collecting data and how are you going to use it
Data sharing agreements
Resources required for data collection
Quality of data dependant on data entry
Recruitment
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If specialist skills required, may need multiple rounds of recruitment which takes time
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Consider retention strategy and building pool of future recruits to avoid disruption to
service
Realistic Expectations
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Risk of running before you can walk
Investor’s Journey
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Engaging them in the challenges
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Providing opportunities for them to develop their own understanding of the issues
relating to the service users
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WHY DID ESSEX CHOOSE THE SIB APPROACH?
 Need: high numbers, high cost, poor outcomes
 Services: shift towards prevention
 Resilience: building family strengths, reducing dependence and demand
 Savings: unlocking acute spend, efficiencies and re-investment
 Investment: upfront, off the balance sheet
 Risk: risk of failure deferred to investor
 Performance: Enhanced by PbR approach
 System change: sustainable and outcomes driven
 Transformation: outcomes-led commissioning organisation
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LESSONS LEARNT: COMMISSIONERS PERSPECTIVE
 Affordability: cost benefit comparison, value of risk transfer
 Simplicity: attribution, cashability, timeliness
 Tactical: targeted where impact will be greatest and last longest
 Procurement: innovation to enable co-design, ensuring competitive process
 Market development: shaping of new market opportunities
 Harness enthusiasm and develop expertise: political and senior leadership
support, develop and retain expertise, reduce future replication costs
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THANK YOU FOR YOUR TIME
ANY QUESTIONS?
QUESTIONS,
COMMENTS,
DISCUSSION
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