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Where do we go from here? Social Impact Bonds and delivering Social Justice

Stephen Meredith Head of Social Justice Analysis, DWP 11 November 2013. Where do we go from here? Social Impact Bonds and delivering Social Justice. Content. 1. Why does Social Investment matter for Social Justice? 2. Example: Youth Unemployment Innovation Fund 3. Where do we go from here?.

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Where do we go from here? Social Impact Bonds and delivering Social Justice

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  1. Stephen Meredith Head of Social Justice Analysis, DWP 11 November 2013 Where do we go from here?Social Impact Bonds and delivering Social Justice

  2. Content 1. Why does Social Investment matter for Social Justice? 2. Example: Youth Unemployment Innovation Fund 3. Where do we go from here?

  3. Social Justice • To give individuals and families facing multiple disadvantages the support and tools they need to turn their lives around. • Estimated 5.3 million adults experiencing multiple disadvantage in the UK, with significant costs to individuals, communities and taxpayers. • Key principles: • A focus on prevention and early intervention • Where problems arise, a focus on recovery as the primary aim • Promoting work as the most sustainable route out of poverty • Innovation in the commissioning, funding and delivery of services • Localism & Big Society - recognising the vital role of local Government and the voluntary and community sector. • Ensuring that interventions provide a fair deal for the taxpayer

  4. Delivering Social Justice • Social Justice Key indicator 7: The size of the Social Investment market • Unlock private investment to tackle key social problems • Harness expertise and business discipline of private sector • Enable social ventures to take on PbR contracts - SIBs

  5. DWP Youth Unemployment Innovation Fund • Aim to test new social investment and delivery models to support disadvantaged young people aged 14 years and over • Objective 1 – generate genuinely new and innovative ideas to help young people who are disadvantaged, or at risk of disadvantage; • Objective 2 – to test the extent to which Annual Managed Expenditure savings are generated as well as other wider fiscal and social benefits and delivery of Social Return on Investment; and • Objective 3 - to support the development of the social investment market, the capacity building of smaller delivery organisations and generate a credible evidence base which supports social investment arrangements

  6. DWP Innovation Fund – design • £30 million over three years • 100% Payment By Results Model • Commissioned via two separate procurement round • 1st round started in April 2012; 2nd round in Nov. 2012 • There are now 10 DWP Innovation Fund Social Impact Bonds (SIBs) operating in the UK • Led to a range of social investment partnerships, with differences in structure, characteristics and motivations. • UP to April 2013 – 6100 young people receiving support, with 1800 positive outcomes. • Major evaluation started to capture lessons and impact (incl. SROI)

  7. Innovation Fund rate card • Outcomes and Maximum Prices (based on 3 years of AME savings) - Improved attitude towards school - £700 - Improved behaviour - £1300 - Improved attendance- £1400 - Entry Level Qualification - £900 - NVQ level 1 or equivalent - £1100 - NVQ level 2 or equivalent - £3300 - NVQ level 3 or equivalent - £5100 - Entry into employment - £3500 - Sustained Employment - £2000

  8. To realise potential of this developing market there are a number of barriers that commissioners, providers and investors need to overcome Social Investment Barriers Government is strengthening the market High transaction costs Centre for Social Impact Bonds to share information, templates and best practice Bespoke nature of deals leads to high transaction costs Cabinet Office’s £10m Investment and Contract Readiness fund and a £10m Social Incubator fund Investable business models Govt to open up public services, while providers need to demonstrate impact Regulatory & tax structures HMT consulting on tax relief for social investment. Also regulatory review. Ensuring frameworks suitable for this embryonic market. Understanding of risks and outcomes Early Intervention foundation to build the evidence base for preventative programmes. Piloting of 13 SIBs. Investors and commissioners need to understand 'what works' for the risk return trade-off Cornerstone 'investors' To improve infrastructure and raise profile Launched the £600m Big Society Capital Set counterfactual & attribute & value impact. Heavy data requirements, incl. data-sharing. Sharing lessons learned through X-Gov PbR group. Improve data sharing and tackle barriers Analytical Many outcomes affect no. of Depts. or LAs. Need to co-ordinate commissioning and pool budgets. Not supported by legal and financial frameworks. Multiple outcomes Set up Social Outcomes Fund. Big Lottery have followed. X-Gov work looking at encouraging PbR.

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