Social Impact Bond

1. Social Impact Bond EUROPEAN OFFENDER EMPLOYMENT FORUM 24th March 2011 Janette Powell – Social Finance Colin Lambert – St Giles Trust 1 1 Social Finance is Authorised and Regulated by the Financial Services Authority. FSA No: 497568

2. Who are Social Finance? Social Finance was formed with an overriding purpose – to connect investment with need in a way that supports social progress • Our aim is to make more non-governmental money available reliably and quickly to those who need it. • By making more financial resources available for intelligent interventions, we hope to enable better social outcomes. • We believe that the market and society need each other and can work more closely together. • We develop structures that enable investors to fund social progress and receive returns that can be invested again in society. In this way we make more money available, more sustainably, to address entrenched social issues. • Social Finance is an FSA regulated, nonprofit organisation. 2 2 Social Finance is Authorised and Regulated by the Financial Services Authority. FSA No: 497568

3. What is a Social Impact Bond? The Social Impact Bond Model • 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.

4. Why do we need a SIB? The Social Impact Bond enables a shift in focus from crisis provision to preventative spend Cycle of re-offending At risk of offending Receive police caution Serve community sentence Serve prison sentence Social Impact Bond Social Impact Bond Social Impact Bond Social Impact Bond Transfer of resources catalysed by Social Impact Bonds

5. Social Impact Bond – Criminal Justice System Public Sector £ £ £ £ £ £ £ £ £ £ £ £ Service Users Social Finance is Authorised and Regulated by the Financial Services Authority. FSA No: 497568

6. SIB – Criminal Justice System Public Sector Investors SIB Delivery Agency £ £ £ £ £ £ Money drawn down evenly over project life £ On going operating funding £ £ Service Providers Service Users Host prison - HMP Peterborough operated by Sodexo Justice Services Social Finance is Authorised and Regulated by the Financial Services Authority. FSA No: 497568

7. SIB – Criminal Justice System Public Sector Investors SIB Delivery Agency Service Providers Service Users IA Social Finance is Authorised and Regulated by the Financial Services Authority. FSA No: 497568

8. SIB – Criminal Justice System Make payment based on defined outcomes Financial returns dependent on outcomes Public Sector Investors SIB Delivery Agency £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ Service Providers Improved social outcomes Reduced public sector costs Wider benefits to society Service Users IA Reduction in re-conviction Social Finance is Authorised and Regulated by the Financial Services Authority. FSA No: 497568

9. How do you get paid? The payment structure is crucial to ensuring that the Social Impact Bond encourages and enables quality services to achieve outcomes and address the most deep-seated problems The price should be value rather than cost-based. This encourages the development of more cost-effective outcome delivery models. e.g. the price should be based on the value to the government per reduced re-offender not the on the cost of services delivered Price per outcome e.g. if the payment is based on reduction in re-offending then it is more “profitable” to work with a low level offender and stop him offending than invest in effectively resettling a frequent offender. However, if the payment is based on a reduction in conviction events the perverse incentive is removed. The pricing structure should be designed to encourage service providers to work with the entire target population rather than focus on quick wins. Also ensures that investors are rewarded for all the value they create. Pricing structure Payment timing e.g. rather than receiving government funding to deliver the service government only pays when the outcome is achieved. The payment is received when the outcome is achieved and measured

10. Can it be used anywhere? This model does not apply to every social issue and is only one of a range of funding options • Cost of intervention is smaller than public sector savings • The cost savings accrue within a relatively short time horizon • The cost savings are cashable (particularly in the current economic environment) • There are good outcome metrics on which to base a contract • Preventative interventions have been shown to improve the outcome When Social Impact Bonds Apply Traditional funding streams will still be critical in funding many services

11. Example – The One Service The service is funded by investment raised through a Social Impact Bond. Interventions are delivered by a number of social sector providers with a proven track record, united under the brand “One” to provide a co-ordinated service to prisoners. Financial returns to investors are funded by the Ministry of Justice and the Big Lottery Fund and are based on improved reoffending rates. If reoffending rates do not improve, then investors will receive no recompense.

12. Multi-agency Interventions St Giles Trust STG Mentors Ormiston STG /Mentors Ormiston Volunteers Ormiston Volunteers Community Prison Staff St Giles Trust St Giles Trust Bail Support Peer Volunteers St Giles Trust STAGE 1 STAGE2 STAGE 3 STAGE 4 BAIL in Community PRISON INDUCTION HOUSING DRUG TREATMENT GYM EDUCATION WORK FAITH HEALTHCARE etc HOUSING DRUGS FAMILY MEDICATION MENTAL HEALTH BENEFITS DEBT EMPLOYMENT etc HOUSING DRUGS DENTIST MENTAL HEALTH EMPLOYMENT FAMILY LIFE SKILLS BUDGETING etc TENANCY SUPPORT ATTITUDES COUNSELLING TRAINING FAMILY FAITH GROUPS FRIENDS etc HEALTHY LIVING COUNSELLING WORK FAMILY VOLUNTEERING VOTING HOBBIES COMMUNITY GROUPS etc ONE ASSESSMENT DAY OF RELEASE Example offender journey 12 months support post release

13. First agency involved Helped mould the project We are delivering the ‘through the gates’ element of the service Why us? Where do St Giles fit in?

15. TTG Family Tree

18. The Proof:

19. The Peterborough Project • NVQ 3 in IAG in the prison • Through the gates workers • Resettlement Support • Other agencies in the community and volunteers to help keep people out of trouble for 12 months after release

20. In prison • Serving prisoners trained as peer advisers using NVQ 3 in Information, Advice and Guidance • Pre release assessments done by TTG workers or Peer Advisers • Work begins on planning for release, make referrals • Links made with in-prison services

21. On the day of release • Met at the gates • Taken to key appointments • Accommodation found – often temporary • Support given by paid TTG workers and volunteers, some of whom have come from Peterborough prison and gained the NVQ

22. First 3 months post release • Work on permanent housing • Ensure benefits claimed • Refer into other services – subs use, MH • Refer into ETE • Support around staying out of trouble • Lots of hand holding

23. When stabilised • Lighter touch support • Low level monitoring for one year • Referral onto community mentoring • Be available if there are wobbles • Need early warning system • This is the ‘new’ bit

24. Case Study • 28 years old • First offended at 13 • Been in prison every year since 17 • Diagnosed with schizophrenia, Class A drug user, PPO • Now out of prison for 4 months, longest period in his adult life

25. Overall Aim • The only thing we are measured on is whether we can reduce re-offending • What we deliver is a classic menu of practical help with housing and other services and support to move away from offending. • Because these are the things we know work

26. Questions? www.socialfinance.org.uk www.onesib.org www.stgilestrust.org.uk