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Prior to the launch of the project, there had been higher numbers of children and young people in care in Essex than both the national average and statistically comparable Local Authorities. When initial feasibility work was undertaken in Essex, there were 1,600 looked after children. This number had been growing by around 28% over the previous five years. The average costs of care range from approximately £30,000–£200,000 p.a. per child, depending on the type of care placement. More importantly, staying in care is associated with poor outcomes for the children in areas such as education, offending and wellbeing.
The MST SIB in Essex was the first social impact bond commissioned by a local authority. Social Finance designed and manages the SIB to deliver a five year Multi-Systemic Therapy programme to 380 adolescents at the edge of care in Essex so that they can remain safely at home with their families.
Multi-Systemic Therapy (MST) is a licensed, evidence-based intervention that delivers family therapy in the home through highly qualified therapists over three to five months with the aim of keeping families together and avoiding out-of-home care. Practitioners are required to receive specific training, and the therapy must be delivered in adherence to the guidelines set out by MST Services Limited. There are two MST teams operating in Essex, each covering different parts of the county. Each team is headed by a MST supervisor and there are four MST therapists in each team. Find out more about MST.
The use of a SIB approach to procure the service was agreed to explore the potential benefits of using an innovative financing method, allowing the council to avoid the upfront set up and running costs which would have been incurred from establishing the service internally using conventional procurement approaches. As an evidence-based intervention, MST was seen as providing a good opportunity to robustly monitor and measure impact.
In 2013 Traverse (formerly OPM) were commissioned to deliver a three-year independent evaluation of the MST SIB. A 2015 interim evaluation report found that outcomes achieved were exceeding pre-defined targets and national averages, and that the Essex MST was slightly more effective than other MST services nationally.
However, the report notes that due to the context within which the SIB has been established, it is difficult to ascribe improvement to the presence of private social investment and its bearing on service outcomes. Firstly, the Multi-Systemic Therapy provided through the SIB was a novel service offer for Essex County Council. Secondly, a substantial restructuring of the council’s children’s support services occurred alongside the introduction of the SIB. As a result, the comparison of the SIB’s effect on social outcomes against a historical baseline proves highly problematic. This made it particularly challenging to establish how the SIB structure impacted on the implementation of MST and whether social investment in the PbR mechanism adds any further value in terms of outcomes or performance. Whilst the required adherence to and rigidity of the MST model of intervention leaves less space to innovate and take risks, there are some signs to suggest that social investors are introducing more rigorous governance mechanisms into the PbR model.
Despite the favourable performance for those going through the service, stakeholders reported that Essex still has a higher than average proportion of teenagers entering the care system. This has led to questions around whether the service, on its own, is sufficient in meeting the council’s overall aims and having the system level impacts originally anticipated. Read more about the Traverse evaluation work here.
Maximum outcome payments
Essex County Council
Action for Children
Bridges Ventures, Big Society Capital, Barrow Cadbury Trust, Tudor Trust, Esmee Fairbaim Foundation, King Baudouin Foundation, Charities Aid Foundation, Social Ventures Fund
Primary outcome measure: reduction in care placement days compared to predicted baseline, over a 30-month period for each child
Secondary outcome measures (not linked to payment or investor returns): educational engagement, offending and personal wellbeing
Quarterly assessment of outcomes, generating small regular outcome payments. Payment for the service are calculated by determining the costs saved by Essex County Council through the diversion of young people from care as a result of the MST.
Initial development work undertook by the commissioning team of the then Schools, Children and Families directorate of Essex County Council
Feasibility work begins under contract between Essex and Social Finance
Feasibility work identified MST as the recommended intervention
Following a tender process, Action for Children is appointed as the service provider
The SIB is launched
Service delivery beings with one MST team
Service is fully operational with two MST teams
Essex County Council was the first local authority to commission a Social Impact Bond. Commissioning the SIB in Essex was a long and complex process, with some uncertainty about the process. It is vital to engage operational stakeholders early in the commissioning process. Introducing an element of co-production, and having operational leads ‘sense check’ the contract were recommended to connect the processes with those responsible for making it work.
Given the length of time from commissioning the MST SIB to the service being operational, further consideration of the changing local context may have been useful, particularly given the reduced numbers of children going into care in Essex, and the development of other services and interventions. The Essex SIB was the first of its kind outside the criminal justice sector. Changes were made to the structure and governance of the SIB during its operation in response to the learning about effective governance and constituting relationships between commissioners and investors.
MST in Essex is overseen by a quarterly Project Board which has senior representation from Essex County Council, Children Support Services Limited (CSSL), Social Finance and Action for Children. Sitting underneath the Board there is an Operational Steering Group (OSG) with representation from CSSL, the MST Service, Essex Social Care and other services such as Education and CAMHS. The OSG is responsible for overseeing practical issues in relation to the service: establishing and improving the referral process, monitoring referrals and undertaking stakeholder engagement activity. This group initially met monthly but now meets quarterly. Regular interaction between MST and ECC social care teams is maintained in addition to OSG meetings.
The contract between the council and CSSL is subject to quarterly contract monitoring meetings led by the council’s procurement team. These meetings are also used to reconcile and agree the data which feeds into the payment mechanism across all parties and agree the payments due. Action for Children as a licenced MST provider is subject to an external quality assurance programme operated by MST Inc(the US-based MST parent company). The purpose of this is to ensure fidelity to and compliance with the MST methodology.
At the early stages of the SIB implementation, turnover of MST therapists was identified as a key issue, with turnover at over 30%. The SIB structure allowed for this concern to be quickly addressed by sending 2 therapists to train in the US and by introducing a Therapist in Waiting role. The proactive management of the SIB helped reduce staff turn over and minimise gaps in service.
As part of the SIB, a small pot of money was made available to each family participating in MST treatment with the aim of sustaining the positive changes and outcomes achieved. The Fund could be used to pay for activities, services or equipment identified to meet additional outstanding needs of the family. The introduction of a Flexible Fund to allow practitioners some additional discretion in the services delivered to clients was highly valued by therapists and thought to be more accessible than other similar funds provided by the Local Authority. However, flexibility needed to balanced against the requirements of the MST intervention.
The late involvement of operational services in the development of the SIB model 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 MST intervention 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. Read more.
In setting up a SIB, it is important not only to consider the details of the financial instrument, but also the operational aspects of implementing an intervention procured via such an approach. It is important to involve frontline staff and relevant stakeholders at an early stage when planning for a SIB. This ensures that relevant insights are levered in from different perspectives to give commissioners, investors and providers a much clearer sense of key issues to be considered.
For further information on the Essex MST SIB you can contact:
Communication with Tanya Gillett, Head of the Youth Offending Service at Essex County Council, 2018
Last updated: October 2019.