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

3. 3 Department for Work and Pensions 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: o A focus on prevention and early intervention o Where problems arise, a focus on recovery as the primary aim o Promoting work as the most sustainable route out of poverty o Innovation in the commissioning, funding and delivery of services o Localism & Big Society - recognising the vital role of local Government and the voluntary and community sector. o Ensuring that interventions provide a fair deal for the taxpayer

4. 4 Department for Work and Pensions 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. 5 Department for Work and Pensions 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. 6 Department for Work and Pensions DWP Innovation Fund – design £30 million over three years 100% Payment By Results Model Commissioned via two separate procurement round 1 st round started in April 2012; 2 nd 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. 7 Department for Work and Pensions 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. 8 Department for Work and Pensions High transaction costs Investable business models Regulatory & tax structures Bespoke nature of deals leads to high transaction costs Govt to open up public services, while providers need to demonstrate impact Ensuring frameworks suitable for this embryonic market. Social Investment BarriersGovernment is strengthening the market Cabinet Office’s £10m Investment and Contract Readiness fund and a £10m Social Incubator fund HMT consulting on tax relief for social investment. Also regulatory review. Understanding of risks and outcomes Investors and commissioners need to understand 'what works' for the risk return trade-off Early Intervention foundation to build the evidence base for preventative programmes. Piloting of 13 SIBs. Centre for Social Impact Bonds to share information, templates and best practice Cornerstone 'investors' To improve infrastructure and raise profile Launched the £600m Big Society Capital Analytical 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 Multiple outcomes Many outcomes affect no. of Depts. or LAs. Need to co- ordinate commissioning and pool budgets. Not supported by legal and financial frameworks. Set up Social Outcomes Fund. Big Lottery have followed. X-Gov work looking at encouraging PbR. To realise potential of this developing market there are a number of barriers that commissioners, providers and investors need to overcome