Current projects
Social Impact Bonds for Health and Social Care
Social Impact Bonds for Health and Social Care

Social Impact Bonds (SIBs) have recently become part of the public services landscape in the UK and internationally. In a SIB contract, public sector commissioners partner with private or Third Sector social investors to fund interventions that seek to tackle complex social issues. Under these arrangements, non-government investors cover the upfront costs necessary to set up the interventions implemented by service providers, while the government commissioner commits to pay a return on investment if pre-defined desired outcomes are reached.

In the field of health and social care, nine projects across England, collectively known as the SIB ‘trailblazers’, have received seed funding from the government’s Social Enterprise Investment Fund to evaluate and potentially implement a SIB. The Department of Health’s Policy Research Programme has commissioned an independent evaluation of these projects from PIRU, in partnership with RAND Europe, to explore their potential benefits and costs.

The objectives of this project are:

  • To assess whether SIBs help achieve better outcomes and understand the costs and challenges of using these funding mechanisms.
  • To review existing research on SIBs, analyse data and documentation from each ‘trailblazer’ project, and conduct interviews with a range of local stakeholders to understand the state of implementation in each site.
  • To help the Department of Health to determine the value-added and feasibility of further SIB contracts in health and social care, and to inform the way in which SIBs and similar mechanisms should be designed and/or managed in future.

A report with interim findings from the early evaluation was completed in March 2015. The interim report describes the progress of the nine ‘Trailblazer’ projects that received funds from the Social Enterprise Investment Fund in 2013 to investigate the feasibility of setting up SIB projects in health and social care in England.

The findings in this report are based on a review of the SIB literature, documentary analysis and qualitative interviews with key informants involved in UK SIB development undertaken between May and November 2014.

The Trailblazers cover a variety of health and social care issues and are in different stages of development. As of December 2014, two projects were operational, and five projects were still in negotiation. Two Trailblazers will not become SIBs as one project has been fully funded by a public commissioner and the other was terminated before the contractual stage. The interim report details the diversity of models and approaches to SIB development across the nine Trailblazer projects.

The literature review finds that little empirical data about SIBs has been produced to date. There is a much larger academic, policy and ‘grey’ literature focused on the theoretical impacts of SIBs in funding and providing public services. Early empirical fieldwork data align closely with the existent literature.

Key findings from the documentary analysis and interviews in the nine Trailblazers are that:

  • SIBs require complex negotiations amongst multiple actors and organisations that have not worked together before. There may often be delays in agreeing SIB contracts and accessing requisite development funding to aid SIB development.
  • SIB negotiations currently appear to have high transaction costs. Some health and social care SIBs are motivated by a desire to develop innovative services, whilst others focus on scaling up established service models delivered elsewhere or at smaller scale.
  • SIBs have a significant impact upon how activity and outcome data are collected, frequently leading to more extensive and considered techniques of both data capture and analysis. However, informants expressed concerns around how to attribute outcomes to services.
  • Learning points from two of the first operational SIBs in health and social care include: firstly, the importance of establishing clarity of data requirements and then building internal or external capacity to do this; and secondly, the importance of extensive collaborative working between all parties to ensure operational success despite the requirement to tender services.

The blog "Japan highlights innovative Asia Pacific model for Social Impact Bonds" by Chih Hoong Sin and Ichiro Tsukamoto can be accessed here>>

The blog "We should ask three big questions about SIBs" by Eleanor Carter and Clare Fitzgerald can be accessed here>>

The blog "Investors need rigorous assessments of Social Impact Bonds" by Katy Pillai can be accessed here>>

The blog "Academics can show governments how to evaluate SIBs more rigorously" by Chris Fox can be accessed here>>

The blog "Impact bonds could offer a paradigm shift towards more effective public services" by Emily Gustafsson-Wright can be accessed here>>

The report "The LOUD SIB Model" by James Ronicle, Alec Fraser, Stefanie Tan and Catie Erskine can be accessed here>> The LOUD SIB Model infographics can be accessed here>>

The blog "Social Impact Bonds offer challenges and opportunities in health and social care" by Alec Fraser, Stefanie Tan and Nicholas Mays can be accessed here>>

The blog "Next step: develop Social Investment Partnerships" by Ben Jupp can be accessed here>>

The blog "SIBs don't work for complex problems because they're unaccountable to service users" by Stephen Sinclair, Neil McHugh and Michael J Roy can be accessed here>>

The blog "Dream of Social Impact Bonds should not blind us to their dangers" by Mildred Warner can be accessed here>>

The blog "Ethical risks of marketising public services demand caution" by Julia Morley can be accessed here>>

The blog "SIBs may be overhyped but their focus on outcomes is a vital policy innovation" by Alex Nicholls can be accessed here>>

An international conference on SIBs was held in London in September 2016. The programme and presentations can be accessed here>>

A literature review on SIBs was published in Social Policy and Administration in October 2016 and can be accessed here>>

An interim report of the SIBs Trailblazer evaluation was published in March 2015 and can be accessed here>>