Big Lottery Fund Learning from Social Impact Bonds and other outcomes based interventions Phil Messere Funding Manager Big Lottery fund

Big Lottery Fund and SIBs 2010 – Peterborough: £4.4m co-commissioner 2010 - £5m SIB feasibility contract for 6 SIBs 2011 – £2.8m Next Steps: feasibility 3 SIBs 2013 - £40m CBO fund: 2015 – first CBO backed SIB Launched – W2W 2016 – delivering £80m Life Chances Fund 2017 – 12 CBO SIBs Launched; 2017 – 190 projects being considered in LCF 2017 – supporting DfE SIB Innovation Pilot

Why a SIB? They support people SIBs are helping to - Reduce demands on: Health – diabetes, dementia, social prescription, end of life Homelessness Older people’s services – social isolation Mental health and disability employment Victim support Prevent: Costs of loneliness and social care referrals Unemployment and related wellbeing/crime issues

Why might you be interested in a SIB? Cashable savings Costs avoided Community benefit Service user wellbeing Better data to scale or replicate outcomes models Research for more effective interventions

Cost of Present Interventions Why a SIB? Financials More effective interventions to support people Savings for commissioners Public Sector Saving Cost of Present Interventions Savings retained by Commissioner. Impact of SIB Investor return and other performance payments Cost of new SIB Interventions Net Cost to Commissioner Status Quo SIB Cost Saving

Why a Fund supported SIB? LCF/CBO subsidises commissioners further SIB de-risks support local providers Cashable Savings Saving including CBO/LCF top up Investor return and other performance payments Commissioner Outcomes Payments Net Cost to Commissioner Savings Net Cost Outcomes Payments

What is a SIB? Contractual arrangement Financial structure for investment Transfers financial risk to Investors Defers intervention and other costs Supports early stage prevention ‘Precise’ tool to measure service impact Data analysis to inform future strategy

Ways to Wellness SIB Commissioner: Newcastle Gateshead CCG SIB Management: Ways to Wellness (WtW) SIB aims: reducing costs of patients with long term health conditions improving well-being in deprived areas People to be asked to take part: 11,300 People to engage: 8,000 plus

WtW Financials Commissioner Savings: £8.76m Other savings: £10.7m Commissioner Outcomes payments: £6.5m CBO outcomes payments: £2m Central government outcomes payments: £1m SIB start up investment: £1.65m Bridges Ventures SIB cost to deliver: £3.93m

WtW process and success to date 2012 - VONNE, a charity, developed the idea 2013 - VONNE set up WtW as investment vehicle 2014 - WtW - £150K from CBO for feasibility work 2015 - CCG commissioned WtW to manage SIB 4/15 - SIB launched 2016 - results in year one: 97% of expected referrals completed 95% of patients expected recruited Good early feedback from patients and GPs Too early to say if cost savings will be realised. 2017 – further progress year 2 – awaiting results

WtW Learning Need to calculate potential attrition carefully Multi-providers helps secure continuity of service Different GPs and other hubs will engage differently Improved wellbeing does not always mean saving People supported really pleased to be engaged – “best thing since sliced bread” feedback Strong steering group to drive project forward Continually review risk/reward balance

Learning – why a SIB? Key general issues are: Other options – is it better than fee for service? What is similar to past practice – low risk? What is new and not tested – higher risk? How to incentivise service users to participate? Links/fit with other initiatives and existing services? What is benefit to commissioner – is it saleable?

Learning from Feasibility Work (feedback from 72 SIB feasibility studies) Value for money - maximise impact Commissioners have most expertise needed Skills audit before engaging consultants VCSEs - multiple roles Feasibility funding most useful in key areas Commissioners make sure their agenda first Shared learning and strong evaluation Service user engagement - often overlooked

Learning - Top up Payments If commissioner does not lead, SIB structures can get complicated and overheads can cost more Strong rationales for savings, metrics, outcomes so engage with commissioner finance teams early Investor returns needs to match risk transfer Only pay performance bonuses to reward extra risk Controls can de-risk investor at provider expense Management overhead needs to be managed – 5% 22 months from concept to SIB launch

Learning Financials and Metrics Incentivise all parties to maximise success Look for social (and learning) impact first Clear outcomes and strong data Independent data verification Manage perverse incentives, attribution, creaming Check realism of interventions and savings Plan realistic intervention costs Plan proportionate overhead costs

Learning: Project Management Get skilled commissioner people on board Retain experts Project manage In-house or procured management for VfM Regular data analysis review Empower project board to effect rapid change Manage conflicts, risk transfer and procurement Ensure continued stakeholder engagement Disseminate learning to scale/replicate SIBs Make sure proposal timeline is manageable

Opportunities for Commissioners LCF is closed but: Projects want stronger commissioner engagement c100 LCF SIBs will be in development end 2017 LCF Adult Services - Drugs, alcohol, health, older people £1m plus LCF outcomes payments to help commission DCLG, DoH, DWP and OCS developing SIB Progs.

Further Information https://www.gov.uk/government/publications/life-chances-fund https://www.biglotteryfund.org.uk http://golab.bsg.ox.ac.uk/ http://www.goodfinance.org.uk/