Outcomes-based contracting
At the Government Outcomes Lab, we want to understand how outcomes-based contracting compares to other forms of public service contracting, and how it might help to drive more productive cross-sector partnerships.
Traditional forms of public service contracting tend to link payments to the inputs or activities of the service. However, public services exist to achieve tangible outcomes with service users - that is, changes which positively impact upon their life experience. Outcomes-based contracting is one way of focusing on the overall improvements in the life of service users, rather than participation in individual services, by linking payments directly to the achievement of outcomes with service users. Social impact bonds (SIBs) are a form of outcomes-based contracting, in which a third-party investor provides the upfront capital to finance service delivery, and is repaid (with a premium) if specified outcomes are achieved.
We are engaged in an extensive, multi-method and interdisciplinary longitudinal study of the UK Government’s Life Chances Fund (LCF), that will continue until the fund’s conclusion. The LCF was launched as an £80 million fund supporting the development of outcomes-based commissioning through the use of social impact bonds, by providing a top-up payment to local government commissioners. Our primary evaluation strand is a project-level evaluation across the portfolio of 31 projects offered funding by the LCF utilising administrative and survey data, while our supplementary evaluation strand takes a more in-depth look at particular project sites that provide an opportunity to compare services delivered under the SIB to similar projects commissioned in other ways.
In addition to our work on the LCF, we have produced work on a range of aspects of outcomes-based contracting, including a review of social impact bonds in the UK, the trade-offs involved in outcomes contract specification, the flexibility of the SIB model, and the use of outcomes funds to provide large-scale funding for outcomes payments.
We also host the world’s most comprehensive public dataset on impact bonds around the world as part of our INDIGO data collaborative, and are undertaking a systematic review of the evidence on outcomes-based contracting from around the world, as part of our efforts expand the practical tools available to those working in academia, policy and practice.
Publications
Reports
Anastasiu, A., Carter, E. and Airoldi, M. (eds.) (2024) The evolution of social outcomes partnerships in the UK: Distilling fifteen years of experience from Peterborough to Kirklees, Government Outcomes Lab, Blavatnik School of Government, University of Oxford
L. Savell, E. Carter, M. Airoldi, C. FitzGerald, S. Tan, J. Outes Velarde and J. R. Macdonald, (2022) Understanding outcomes funds: A guide for practitioners, governments and donors, Government Outcomes Lab, Blavatnik School of Government, University of Oxford
Government Outcomes Lab, European Investment Bank (2021) Social outcomes contracting in Europe: An introductory guide to social outcomes contracting in European Union Member States. Social Outcomes Contracting Advisory Platform
E. Carter, C. FitzGerald, R. Dixon, C. Economy, T. Hameed, and M. Airoldi. (2018) Building the tools for public services to secure better outcomes: Collaboration, Prevention, Innovation. Government Outcomes Lab, University of Oxford.
Evaluations
Academic publications
C. FitzGerald, T. Hameed, F. Rosenbach, J. R. Macdonald & R. Dixon. (2021)Resilience in public service partnerships: evidence from the UK Life Chances Fund. Public Management Review
R. Dixon. (2021) Performance management in social impact bonds: how an outcomes-based approach shapes hybrid partnerships Government Outcomes Lab, University of Oxford.
E. Carter. (2020) Debate: Would a Social Impact Bond by any other name smell as sweet? Stretching the model and why it might matter. Public Money & Management.
C. FitzGerald, E. Carter, R. Dixon, and M. Airoldi.(2019) Walking the contractual tightrope: A transaction cost economics perspective on social impact bonds. Public Money & Management.
E. Carter. (2019) More than Marketised? Exploring the Governance and Accountability mechanisms at Play in Social Impact Bonds. Journal of Economic Policy Reform.