The GO Lab has published a new resource for potential parties to SIB contracts for public social services. We are also asking for access to executed SIB contracts and would love to hear stories with lessons learned from the contracting process.
Today the GO Lab published a short guide to local authority commissioners and their legal teams in which we describe one major barrier and five potential hurdles that can prevent a SIB contract from being executed, here is a summary:
Major barrier: Legal team engaged too late in the process.
Five potential hurdles:
1. Inappropriate standard payment terms;
2. Disagreement on minimum and maximum referral rates;
3. No contractor protection in case of authority termination;
4. Inappropriate monitoring terms; and
5. Lack of flexibility for changes.
Our short guide makes extensive reference to the UK Government’s SIB Template Contract and SIB Template Contract Guidance. The SIB template contracts provides terms that wrap around and complement the key elements or “levers” of the SIB project. The SIB levers are adjusted and set in schedules to be attached to the template contract: Schedule 1 Authority Requirements and Obligations, Schedule 2 Payment Schedule, and Schedule 8 Management Information. The schedules in the template contract are blank because they are bespoke to the specific SIB project.
The authority legal team needs time and resources to ensure that the schedules and contract terms are complementary. This should be done before the tender process so that bids can be developed based on both the schedules and contract terms. The main issue we have observed is that late addition of the contracting authority's standard terms can impact the financial model underlying the tender.
The GO Lab would like those involved in designing and developing SIB to share their executed contracts with us. We are keen to study how the essential SIB levers schedules and contract terms have been drafted in actual SIBs. We can then offer suggestions and/or provide additional templates to those considering developing a SIB contract.
So, do the barrier and these five potential hurdles we have observed resonate with your experience? Do you have a SIB contract to share? Email us at golab@bsg.ox.ac.uk
The memo was drafted by James Ruairi Macdonald with input from Julian Blake (Stone King LLP), Roger Bullen (Triodos Bank), David Hunter (Bates Wells Braithwaite), Duncan Kellaway and Daniella Jammes (Freshfields Bruckhaus Deringer LLP), Suzanne Kay (NHS Northern, Eastern and Western Devon Clinical Commissioning Group), and Nigel Ball (Deputy Director, Government Outcomes Lab). Feedback is welcome.