1. Action for Children 'Buy Now, Pay Later’ – Social Impact Bonds
Action for Children 'Buy Now, Pay Later’ – Social Impact Bonds. Is it as good as it sounds? Paul Hargreaves Operational Director - Social Investment

2. Social Investment Definitions
“Social investment is the provision of finance to generate social and financial returns
Social investors weigh the social and financial returns in different ways. They will often accept lower financial returns in order to generate greater social impact. “(Big Society Capital 2013)
“Social Impact Bonds are a form of outcomes-based contract in which public sector commissioners commit to pay for significant improvement in social outcomes (such as a reduction in offending rates) for a defined population.” (Social Finance 2013)

3. Characteristics of SIBs
Outcomes based contract
Investor carries largest risk
Commissioner carries low risk
Savings are shared
Complex financial modelling
Utilisation is key
A number of contracting options (SPVs)

4. Why we were drawn to Social Investment
Longer contracts – eg. 5 years
Allows for early intervention, funding opportunities that would otherwise not be affordable
Focus on outcomes, provides valuable data
Provides new money in a time where Government funds are in decline

5. What we are delivering and achieving
Essex MST
Fully operational July 2013.
Edge of Care – Preventing family breakdown.
SIB contract managed by Social Finance (SPV).
Worked with over 100 families.

6. What we are delivering and achieving
IAAM’s
Enhanced family finding service
Fully operational October 2013.
Hard to place children – adoption
SIB contract is with IAAM’s. We are one of 6 providers.
3 registrations.

7. What we are delivering and achieving
Manchester MTFC-A + follow on Care.
Fully operational September 2014.
LAC Residential population 11-14yrs
SIB - AFC hold main PBR contract with LA.
First Child is in placement.

8. What’s different about running services funded via Social Investment?
Greater scrutiny/analysis of outcomes.
Prudent target setting.
Complex contracting
Financial skills, modelling capabilities.
Efficient governing/management structure.
Flexible staffing structure to accommodate EBP’s/delivery models.
Allocate resources to manage Commissioner and Investor partnerships.

9. What are the challenges?
Development of models suitable to the interests of investors, providers and local authorities of different political complexion
Achievement of greater levels of available investment
Agreement with Governments and local authorities about the need to use savings to promote effective early intervention in the long term
Avoiding complex and lengthy procurement processes where possible

10. Potential benefits for governments:
Improving results for beneficiaries by focusing on outcomes rather than outputs.
Increasing funding for prevention and early intervention programmes in a sustainable manner.
Adding discipline to measuring outcomes for government programmes because this measurement is a prerequisite for payments to be made.
Improving accountability and transparency for publicly funded services.

11. Benefits continued
Improving the evidence base for social services, by ensuring measurement and publication of outcomes.
Accelerating the expansion of evidence-based programmes delivered by effective socially focussed organisations.
Allowing governments to accept and measure new ideas from external providers, only paying for the ones that deliver.
Increasing accessibility of payment by results contracts.

12. Our future vision
Support the development and growth of the Social Investment Market.
Expand our Investor base.
Support LA’s to become Investment ready.
Develop portfolio of replicable programmes that meet needs of LA’s and produces tangible savings.

13. Questions