New Social Impact Bond (SIB) on multiple needs welcome, but must build on evidence

MEAM welcomes the announcement last week of £40 million across three new national programmes to prevent and tackle rough sleeping and multiple needs.  The three programmes are:

  • £20 million for local authorities to pilot new initiatives around prevention
  • £10 million to support people at imminent risk of sleeping rough or those new to the streets
  • £10 million in Social Impact Bonds to help long-term rough sleepers with the most complex needs

Most relevant to the work of MEAM is the new SIB, which will fund coordinated services for people with the most complex needs.  MEAM has been leading the development of coordinated interventions since 2011 and currently supports 27 local partnerships across the country – fifteen using the MEAM Approach and twelve as part of the Big Lottery’s Fulfilling Lives programme.

The new SIB is timely and we encourage local areas to explore the opportunities that are available. However, to be truly effective the SIB needs to be part of a broader strategy and must draw on evidence from existing networks, government programmes and research.  There are four things that we would urge government and the local areas applying to consider:

  1. Payment structures: Significant care will need to be taken to ensure that the payment models used in the new SIB are appropriate for the issues that it seeks to address. The draft ‘rates card’ in the prospectus currently takes little account of rewarding incremental progress, which is so vital when working with people experiencing multiple needs. We are pleased to see a commitment to discuss this rates card with applicants.  Evidence from the National Audit Office, the recent evaluation of the Troubled Families programme, and our work with people with lived experience all point to the challenges of using payment by results for complex interventions, and we would not want to see similar mistakes repeated here.
  1. Local partnerships: True cross-sector partnerships are a vital foundation for local work on multiple needs.  These take time to build and they can be both helped and hindered by the presence of money. We are pleased to see that the prospectus requires mental health and substance misuse support providers to either apply directly with the local authority or formally offer their support.  However, a major challenge will be ensuring that one local provider is not rewarded under the SIB for results that have been jointly achieved.
  1. Cohorts: The SIB is due to run for four years, but local areas will only be able to refer people into it for the first year and must work with cohorts of 100–350 people. Evidence from across the country suggests that it is very difficult to keep people with the most complex needs engaged over this period.  Drop-out rates are therefore likely to impact on payments. We would encourage local areas and the government to give much stronger consideration to ‘tranche cohorts’ if their aim is to support people over a four year period.
  1. Systemic change: If the new investment is to have a lasting impact, it must result in interventions that work with and for the wider system of support services that surround them. They cannot be layered on top. The risk for the SIB is that inappropriate payment structures, partnerships driven around money, and a cohort model that creates separated support structures in a local area could end up having a less-than-positive overall impact on long-term systemic change.

All the issues discussed above can be designed out, and we know that partnerships across the country are beginning to consider these issues in their applications.  We look forward to working with DCLG and applicants for the new funding to share our learning and evidence. We are pleased that advice will be made available to those selected and would be happy to discuss support opportunities with areas that are considering applying.

Applications for the SIB are invited by the deadline of 5pm on 28 November 2016 and the prospectus can be downloaded here

Social Investment: Matching Theory to Reality

Many charities and social enterprises are thinking about how social investment can play a role in their work. In a previous blog we looked at Social Impact Bonds, one of the more complex social investment models. Here we ask David Hounsell (Aleron and The Children’s Society) and Kirsten Naudé (The Children’s Society) to take a broader view of the challenges and opportunities social investment can bring, and share their first-hand experiences of the ups and downs along the way.

David Hounsell and Kirsten Naudé

For many charities, social enterprises and commissioners, social investment is new, untested, and complicated. The changes required to obtain and use social investment can seem too great – and it is easy to slip into a ‘not right now’ mentality. However, it is a market that is growing at pace, and if embraced and understood can help the social sector learn, adapt, and ultimately improve the lives of society’s most vulnerable people.

Over the past two years we have gained experience on what social investment really means, both working within a national charity and advising other charities and commissioners who are tackling social investment for the first time.

A rapid learning curve

For organisations working with beneficiaries facing severe and multiple disadvantage, social investment can seem daunting. We have experienced the significant challenge of designing and using social investment mechanisms to tackle multiple issues across different cohorts and where outcomes affect a range of commissioner budgets, policy agendas, and provider networks.

Through the work of Aleron (which supports social purpose organisations to deliver impact and efficiency) , we have seen how aligning organisational mission, strategy, skills, capabilities, and actions can be challenging enough within single organisations, let alone across multiple organisations and across sectors.

Embrace the challenge

And yet it is adapting to this challenge which can potentially unlock social impact for the people who need it the most. We are all shaped by the systems around us and often the most vulnerable people are those for whom the support available works least effectively.

The Children’s Society supports tens of thousands of young people, most of whom face severe and multiple issues, and who regularly have come into contact with 10 or more separate agencies before they reach its services. In fulfilling its legal and moral obligation to protect, support, and advocate for children and young people, it faces inherent tensions between innovating and ensuring adequate safeguards are in place and duties upheld.

Finding solutions to this isn’t easy, but we know that real positive change in the social sector is always delivered through collaboration. It also involves taking risks and trying new things. Social investment can help to lock-in collaborative working; ensure that impact is the core objective and is measured; to drive strong performance; and create the long-term perspective needed across a network to bring about real change.

Social investment remains in the early testing stage and that is why initiatives such as Big Potential and the Life Chances Fund are welcome in building much needed capacity and capability in the sector. Independent research into the effects of social investment, such as the programme that is about to be conducted by the Centre for Youth Impact, is also crucial to the future of building a sustainable market.

Let theory and reality collide

Whilst we do not have all the answers, we believe that sharing first-hand experience from charities and social enterprises is crucial. Here are five thoughts for charities and social enterprises looking to build a case for social investment:

  1. You won’t know until you try – be ambitious and learn through doing; actively explore options alongside partners, and where possible put ideas into practice.
  2. Build a social investment strategy – look wider than any individual model to how social investment complements your wider funding strategy. For instance, crowdfunding might suit your organisation more than a social impact bond would.
  3. Adopt the principle of collaboration – start with all the potential partners around the table and develop your social investment strategies from there; traditional roles of commissioner, provider, and investor all need to adapt.
  4. Focus on outcomes for individual beneficiaries and the system as a whole – this can remove silo effects from day one and should encourage efficiency in your approach.
  5. Get impact and investment ready – build internal capability and draw on a range of external expertise around business case and financial modelling, impact measurement, data collection and analysis, partnership arrangements, and information sharing.

We are only two practitioners working in this field and we have benefitted greatly from the experience of other providers, intermediaries, commissioners, policy makers and investors. The principles of social investment are strong; turning this into a reality is our next great challenge as a sector.

Contact David at David.Hounsell@alerongroup.com or David.Hounsell@childrenssociety.org.uk, and Kirsten at Kirsten.Naude@childrenssociety.org.uk.

How could Social Impact Bonds help tackle multiple needs?

There is a growing debate about social investment and the role it could play in tackling multiple needs.  MEAM has invited a series of guest blogs on this topic, starting with Caroline Hickson, an Investment Associate at social investment intermediary Numbers for Good.

Public services in the UK are generally set up to support people with single, severe problems, and typically contracted on a “fee-for-service” basis. It’s a difficult challenge to move away from this, but one where the nascent sector of Social Impact Bonds (SIBs) could help.

What is a social impact bond?

SIBs are a new way of delivering public services. They are, in essence, a contract between service providers, outcome funders and social investors, usually structured by an intermediary such as Numbers for Good.

nfg_graphicAt the outset of a SIB, the outcome funders (normally commissioners) decide on the key outcomes they want to achieve – for example, reducing the number of rough sleepers. The chosen third-party provider (usually a charity or social enterprise) delivers a service aimed at achieving these outcomes.

The social investor provides the initial funding to the service provider, and also takes on the risk of the service not achieving its outcomes. If the service is successful and outcomes are achieved, the outcome funder makes payments that are used to pay back the investor.

This avoids the provider facing an initial cash deficit (called a working capital shortfall), where it incurs costs but has not yet been paid. For a charity or social enterprise, this is a risky position to be in. If the intervention does not work (i.e. it does not achieve the expected outcomes), no outcomes payments are made and the loss is borne by the social investor.

Simple, right? Admittedly, it’s a little more intricate than traditional “fee-for-service” commissioning but the emphasis on outcomes can help both providers and commissioners to focus on what they want to achieve. A SIB approach for those with multiple needs could be beneficial in several ways.

Where could Social Impact Bonds help?

Firstly, a SIB approach encourages innovation. The provider – who usually is the most knowledgeable about the beneficiary group – is free to adapt its service as it sees fit to achieve the outcomes. The transfer of the financial risk to the investor should mean the commissioner is also willing to support new types of services, as they do not pay if outcomes are not met.

Secondly, it encourages a longer-term and more holistic view of public services. People with multiple needs often do not have one severe problem, but several ‘low-level’ issues that are likely to get worse over time without help. A social investor is able to support early intervention as it has the capital to spend that a commissioner may not, and typically has longer time horizons.

Finally, because measuring and assessing outcomes is a key component of the SIB (otherwise the outcome funder will not pay), an outcome-based or SIB approach should improve the service provider’s measurement of impact. This ‘impact audit’ process for providers enables them to improve their service and ensure they are really achieving the outcomes they want.

Is it the right approach?

The process of structuring a SIB is more involved than that of a ‘fee-for-services’ contract, but feedback from SIB participants has been that the discipline involved in doing this has ultimately been beneficial.

Of course, as with any commissioning strategy, whether a SIB approach is better for beneficiaries will depend on the time, care and attention taken to ensure the outcomes are well-defined, effective and avoid any perverse incentives. And, of course, in some cases, a payment-by-results or outcome-based approach may not be appropriate.

For those interested in whether a SIB could deliver better outcomes, the recently launched £80m Life Chances Fund and Cabinet Office-backed Government Outcomes Lab provides funding and support for setting up and managing SIBs. Intermediaries such as Numbers for Good also work with all stakeholders on the feasibility and execution and management of social impact bonds.

Creating a SIB involves a shift in all of our thinking about the way we deliver public services – but the benefits to providers, commissioners and, most importantly, beneficiaries can be significant.

The Life Chances Fund will issue themed invitations for SIBs across six themes. Expressions of interest for the first two themes, children’s services and drug and alcohol dependency, are due by 30 September 2016. Further themes will be young people, early years, healthy lives and older people’s services.

From their offices in Newcastle and London, Numbers for Good create financial solutions that allow organisations to fund social and environmental projects. Get in touch with them at info@numbersforgood.com.

We must work together to prevent drug-related deaths

New figures published last Friday by the Office for National Statistics shows that deaths related to drug misuse have risen to record levels, reaching 43.8 deaths per million in England and Wales in 2015. The increase is driven in part by increasing purity and availability of heroin, which has led deaths involving heroin and morphine to double since 2002.

Behind these numbers are individuals whose lives have been cut short. Deaths from drug misuse are avoidable, and it is vital that we learn from the evidence and work together to prevent them.

Figure 4: Age-standardised mortality rates for selected substances, deaths registered in 1993 to 2015 (Source: ONS)

Age-standardised mortality rates for selected substances, deaths registered in 1993 to 2015
(Source: ONS)

In light of this, MEAM welcomes the timely publication of a new report on understanding and preventing drug related deaths in England. It reflects the findings of an expert working group convened by Public Health England, to which we were glad to contribute evidence.

The report highlights the fact that “people who move between services for drug treatment, mental health, housing support or physical health, and have the most complex needs, are at significant risk of drug-related deaths.” We know this group includes people in contact with the criminal justice system.

It sets out a number of principles for action. These include maintaining the provision of drug treatment and effective harm reduction, and widening the provision of naloxone, a drug which can prevent death from overdose.

We particularly welcome the key recommendation that we should meet complex needs through coordinated, whole-system approaches and aligned commissioning. This recommendation is consistent with wider evidence on what makes for effective support for people experiencing multiple needs.

The report highlights the importance of supportive physical healthcare and psychiatric care. It also reflects the significance of key transition points within the criminal justice system, noting that the risk of someone dying in the first four weeks after leaving prison is significantly lower if someone is receiving opioid substitution treatment.

We endorse the report’s call for further research on the links between drug-related deaths and wider factors such domestic abuse, hospital admissions and successful completion of drug treatment. This is a key element of ensuring providers across all sectors can act early, effectively and together to save lives.

MEAM welcomes bold new strategy on poverty

The Making Every Adult Matter coalition – formed of Clinks, Homeless Link and Mind – welcomes the Joseph Rowntree Foundation’s new strategy ‘We can solve poverty in the UK’, published today.

In it, the JRF sets out a comprehensive picture of the scale and challenge of poverty, and highlights the specific challenges faced by people experiencing multiple and complex needs. We support their call for “flexible and co-ordinated support that builds on people’s assets, strengths and relationships.”

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The strategy clearly sets out the links between poverty and the wider needs people experience, demonstrating the need for a joined-up strategy across government on these issues. For too long, policy and services have addressed homelessness, substance misuse, mental ill health and contact with the criminal justice system in isolation. This prevents people from getting the co-ordinated, flexible support they need to move away from the most damaging forms of poverty.

We are pleased that the accompanying report features York’s work using the MEAM Approach – a framework to help local areas design and deliver better co-ordinated services – and the Big Lottery Fund’s Fulfilling Lives programme.

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MEAM welcomes Select Committee report into homelessness – now government must act

Today the House of Commons Communities and Local Government Committee has called on all parts of government to commit to a common approach to ending homelessness, and ensure that people with multiple and complex needs receive the support they need.

homelessness

Publishing a report on its inquiry into homelessness, the Committee made specific recommendations for government, and backed a private members bill on homelessness prevention. Chair Clive Betts MP said:

“The scale of homelessness is now such that a renewed Government strategy is a must. It needs to not only help those who are homeless but also prevent those vulnerable families and individuals who are at risk of becoming homeless from joining them. All Departments will need to subscribe to this common approach and contribute to ending homelessness.”

The MEAM coalition partners welcome this important report, and particularly its call for a cross-government strategy to end homelessness. Coalition director Oliver Hilbery and Homeless Link’s head of policy Helen Mathie gave evidence to the inquiry, alongside Agenda, the alliance for women and girls at risk and the No Recourse to Public Funds Network.

We are pleased that the Committee recognised the need to support homeless people experiencing multiple and complex needs including vulnerable women, care leavers, people with mental health and substance misuse problems, ex-offenders and those who have been affected by trauma and abuse. These individuals face challenges that require a specific and coordinated approach.

The report calls also calls on government to:

  • Develop a new cross-departmental strategy to end homelessness
  • Review the funding of mental health services for homeless people and develop a clear action plan for change
  • Support the Homelessness Reduction Bill 2016-17, introduced by Bob Blackman MP and backed by a broad coalition of charities including Homeless Link. The proposed legislation has been published also today and sponsored by the Committee
  • Exempt all supported accommodation from the proposed reductions to the level of social housing rents and Local Housing Allowance, and provide supported housing providers with “the certainty they need to plan ahead and deliver services”

A response from the government is expected later this year and the Committee will review progress on its recommendations in a year’s time.

The MEAM coalition will continue to work with its partners, frontline services and people with lived experience to advise and challenge government on homelessness and related needs.