Centre for Economic and Social Inclusion- Social Impact Bonds: Can they work for the unemployed?

Working with unemployed people Tomorrow’s People has a 29 year track record of supporting longer term unemployed people into sustainable jobs Launched by Grand Metropolitan (now Diageo plc) in 1984 as a result of the inner-city unrest We have worked with over 450,000 people in this period Currently operate in eleven areas in England and/Scotland plus seven London Boroughs Tomorrow’s People have considerable experience of delivering government programmes, as well as our own innovative solutions to support those furthest from the employment market Everything we do is focussed on improving the long term work prospects of those who face the greatest barriers to work

Delivering our mission Over 10 years ago, Tomorrow’s People recognised that it needed to rebalance its income profile so as not to be too reliant on one income stream to deliver its mission The organisation took a strategic decision to diversify its income streams and started to investigate alternative opportunities Launched its first Employment Bond with Allia (then City Life) in 2001 to support a programme on Tyneside. This generated £300,000 in funds for our programmes

Early exploration – The Junction, a work based residential programme for ex-offenders DWP Innovation Fund – Think Forward Preventive spend - Unemployment hurts at any age; but for young people, long-term unemployment scars for life. Research has shown that lack of employment at a young age means lower earnings, more unemployment, more ill health later in life. In addition the human misery of youth unemployment has a potentially significant impact on the nations finances The net present value of the cost to the Treasury, even looking only a decade ahead, has been estimated at approximately £28 billion.*ACEVO Report Social Impact Bonds

Think Forward Tomorrow’s People is the delivery agent for Impetus PEF for the Think Forward programme in schools The programme provides support to pupils from Year 10 onwards, who the school believe are at high risk of not achieving a successful transition from school to work or training. The programme is delivered by Progression Managers (super coaches) who run a structured programme of engagement giving young people the time and support they need Currently the team are working with 1020 young people in 12 partner schools in Islington, Hackney and Tower Hamlets. Two further schools will join the programme before March and a further two in the next academic year

Social Impact Bond Impetus PEF set up a special purpose vehicle to act as the Financial Intermediary and Contract holder with the DWP Tomorrow’s People were chosen as the delivery agent as we had built a strong relationship over the previous four years, when the Foundation provided grant aid to one of Tomorrow’s Peoples flagship youth programmes PEF were keen to scale a small pilot previously run in Tower Hamlets The core funding for the original programme comes from DWP (innovation Fund), Impetus PEF and Education Endowment Fund

Core KPI’s Improved attendance measured over a 13 week period Improved behaviour Attainment of level 1- 4 qualifications Entry to employment or apprenticeships Sustained employment

Achievement to date Of our first 700 young people, so far we have evidenced:  Improved behaviour in 494 (70%)  Improved attendance in 273 (39%) Of our first 700 young people, 484 (69%) achieved a level 1 qualification Of our first 350 young people, 183 (52%) have achieved a level 2 qualification

Bev’s Story

Case study - Bervi Last year 15-year-old Bervi was in a bad place. Her parents came to the UK in the 1990s and the family lived in an area with a culture of drug and gang crime. At school she was confrontational and difficult. She wasn’t learning. Bervi was referred to the ThinkForward programme and, after just six months with her Progression Manager, her school say she had “responded brilliantly”. When once conflict and breaking the rules was the norm, she is now “polite and friendly; focused and engaged”. She has mentored younger students and has developed an ambition to be a youth worker. She says, "I am determined to make something of myself and make my mum proud."

Lessons that have reasonance SIB’s or other forms of social finance are valuable tools but are not the answer to every financing need Investors and Commissioners need to have confidence –The delivery organisations needs to be confident that its intervention delivers consistent positive social outcomes. This requires a high standard of evidence of impact, which may mean commissioning an external evaluation It takes time to build relationships and mutual trust Working in partnership is essential – at negotiation and delivery stages

Lessons that have reasonance (continued) An objectively measureable outcome or basket of outcomes on which to base the contract is required Commissioners need to recognise the complexities and inter- relationships of interventions when designing PbR contracts Cross departmental commissioning may be required to ensure that both needs of clients are met and any programme is financially viable Delivery agents need to be investment ready Contracts need to be sensibly constructed – balanced and fair Contracts need to be able to facilitate flexibility and learning

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