Drawing social investment lessons from the first social impact bond, at Peterborough prison.
#socialimpactbondsThe Ministry of Justice has recently published the final process evaluation report for the social impact bond at Peterborough prison. There is a wealth of content in the report that will be of interest to people working in this policy area, but there are also a couple of quotes of more general interest to those involved in social investment and social impact bonds:
“[B]eing on a project that’s so innovative and where you can come up with ideas that you go back to the funder and then things can happen, you know, when you normally have a contract and you’ve got a set amount of money you can’t really be that creative unless you’ve put it in the budget in the beginning. So that’s been really good and we’ve developed lots of kind of models of working and new ideas that we’d like to replicate… that’s been really beneficial to us. ” The report goes on to say that this isn’t a feature that requires a SIB, it was not typical of other funding arrangements.
“I think just the way the project has evolved […] I mean it has changed every year […] we used statistics and data to help work out what works and what’s needed and we’ve been able to respond to that and be creative and so that’s been really great.”
Both of these points chime with comments from people working on delivering other social impact bonds – and it's worth considering the fact that although neither of these of these points are impossible to achieve in traditional contracting arrangements, they both go against the grain of output-based commissioning (i.e. commissioning someone to deliver a particular defined service), while they are required for payment-by-results commissioning and social impact bonds.
The report also touches on a point of contention within the social impact bond community: should providers have any performance-based payments? This one did not, and the report strongly implies that this is the correct way of doing it. Yet in other social impact, where performance-based payments are made to providers, the providers themselves are equally adamant that it is the right way – that it gives a healthy focus and impetus to team discussions and makes the gathering and analysis of statistics much more interesting. Investors are similarly polarised in their views on whether it is a good or bad thing. Certainly a point that will be debated more as the social impact bond market develops.