The use of a Social Impact Bond for Edge of Care provision - as seen through the lens of a Head of Service in a Local Authority

Tanya Gillett is the Head of the Youth Offending Service at Essex County Council and a 2018 GO Lab Fellow of Practice. The views expressed within the blog are hers alone and do not necessarily reflect the opinion of the GO Lab. 

My introduction to Social Impact Bonds (SIBs) was on a cold and dark December in 2012. Final negotiations had just concluded between commissioners in the Local Authority and a Special Purpose Vehicle (SPV) responsible for the delivery of a SIB designed to prevent young people inappropriately entering social care. 

This late arrival in the development of the UK’s first locally commissioned SIB mirrored in some ways the journey of some young people into the care system: lots of time spent in corporate planning meetings (the children’s comparison would be lots of meetings with parents, schools, and so on to understand the problem); a few crisis talks to agree the legal framework (reactive discussions with parents  and concerned others); and finally a signed contract and a move to operationalise the new service – with an expected implementation timeline of less than 3 months (child comes into care with a flurry of activity and then it all goes quiet).

The SIB was being introduced into a Local Authority making huge strides forward on the quality and impact of its social work practice with children and families. The pace and scale of this change was significant. However, when a SIB approach was first considered, the Authority was at the start of this transformation and the numbers of teenagers in care was far too high. There was of course a great deal of political and financial interest in the SIB and its potential, but from a children’s services perspective it was but one element of a grand plan to move from inadequate to good in the Ofsted ratings, which was achieved in 2014. 

Five years on and with many more Local Authorities across the country now exploring the potential of SIBs as a tool for better public service provision, there are many reflections I could share but I think it’s most helpful to focus on the lessons capturing how we got from ‘there to here’. 

‘’Send three and fourpence, we’re going to a dance …. Send reinforcements, we’re going to advance...‘’

The late involvement of operational services had unintended consequences from the outset. Assumptions had been made by commissioners and the SPV about how the intervention would work, who the target cohort would be and how quickly it would begin to achieve the expected outcomes. When these were sense-checked with those responsible for implementing the new arrangements, it quickly became clear that there was a disconnect. For example, access to the new intervention known as Multisystemic Therapy (MST) would be via a social work referral which was at odds with the way the model was used in the vast majority of other sites, where access was via a multi-agency panel.   

A great deal of change in social work practice had been taking place in the years prior to the launch of the SIB, leading to large falls in the numbers of children coming into care by the time the SIB was in operation. This meant that social workers would only be looking to the SIB when all other options had been exhausted, whereas the SIB had been predicated on being applied at an earlier stage of problems emerging. There were some heated exchanges six months into the project, which could have been avoided through careful dialogue and checking that all parties mutually agreed a definition for ‘edge of care’. Don’t assume a common understanding of concepts. For example, does ‘edge of care’ mean that at some point in the future there could be a reactive care episode or does it mean the child and their family are at a cliff edge and there is an imminent risk of entry into care? 

SIBs are all about achieving clear outcomes. In our case, the primary outcome is a reduction in the number of children in care (leading to care day costs avoided). The means by which this was to be achieved was the use of a licenced evidence-based programme known as Multisystemic Therapy or MST. Using an evidence-based intervention enabled the investor to have attribution assurance and confidence that the outcomes would be achieved. In hindsight, there were a number of wider implications of using an evidence-based programme, for example recruitment and training requirements and more rigid criteria (linked to the evidence base). In practice this meant that some cases referred to the programme were turned down, leading to referrer frustration. Increasingly there was a disconnect between one of the key underpinning principles of the SIB – to support innovation – and the prescriptive nature of the evidence-based model, which meant there was little opportunity to ‘flex’ the model to the presenting need (for example, young people with autism). 

The business case set out a clear rationale for the use of a SIB to reduce overall costs associated with teenagers coming into care, largely based on the rates being paid to providers. However little consideration was given to the wider costs which would be borne by the Authority and so these were not factored into the business case. These costs included the load on the Authorities financial services (e.g. ratifying outcome data sets, critical time investment in building and sustaining relationships and additional social work time needed to sustain the work done post intervention).  

Another cost element was that by 2013 when the model was implemented, the complexity of the needs of children in the care system meant that care costs had vastly increased. This meant that while numbers of children in care were down, the overall placement costs were rising fast, making it harder to track financial impact. Sure, the rising costs of placements should in theory make the financial benefit of avoiding a placement higher, but only if the young people receiving the service are indeed the most likely to end up in the most expensive placements. As mentioned above, this very much depends on how ‘edge of care’ is defined and understood by the parties involved.

While the SIB delivered against care days saved, in truth there was little impact on the systemic issues which overall contribute to poorer outcomes for children and young people. A good example of this was the sheer number of young people who were either not in school (but on roll) or on vastly reduced timetables (two hours a week in school was not uncommon). Multi Systemic Therapy has a number of standard performance measures, but they are largely self-reports and so without the validation of the school data, this meant a false assurance. Academies are outside of the control of the Local Authority and while good relationships were brokered with some schools, many others focussed too much on academic achievement and were not able to support young people with challenging behaviour. Far too many young people completed MST, but were still not in education, meaning potentially reduced life chances for them. 

There are many things we did that made it hard for ourselves. We overcomplicated the payment mechanism and we did not take enough time at the outset to really understand what exactly a Social Impact Bond was. We did not engage with investors early enough. However, when we started having conversations with the investors, this enabled us to share with them what we had already achieved as a committed Local Authority through our early intervention offer and so explain more fully why we were so keen to ensure that we remained focussed on only referring the more complex young people. We were able to highlight systemic issues (such as access to education) and the limited impact we could have on some Academies behaviours. 

SIBs have of course evolved substantially in the past five years and a number of variations are in operation and remain a favoured approach to funding for central government (see for example, the Life Chances Fund). I wonder though if there are opportunities to create more impactful collaborations between investors and Local Authorities. For example, investors have the ear of Government and so being able to have evidenced conversations with their Local Authority partners about some of the underlying causes of poor outcomes for children and young people may lead to swifter policy change than coming from Local Authorities alone. Investors may also learn from good Local Authorities who balance competing demands of very complex needs of increasingly marginalised communities successful while keeping focused on very slim financial and human resources.

If you've been involved in the development of a SIB project and would like to share your insights, get in touch with us at golab@bsg.ox.ac.uk or tweet @ukgolab #SIBsInsights