London Rough Sleepers (Thames Reach)

Project insights

1. Risk sharing for investors and the provider

   Thames Reach covered the upfront costs of the SIB through funding from the Department of Health Social Enterprise Investment Fund (DH SEIF) (unsecured loan), Big Issue Invest (secured loan) and contributions from their own reserves. In addition, the Monument Trust provided a grant that was not subject to repayment. The investors (Big Issue Invest and DH SEIF) were repaid on a quarterly basis with fixed interest rates with payments commencing within the first year of operations. These repayments were not based on outcomes achievement, so unlike under a conventionally-funded SIB, as long as Thames Reach did not default on its loans, investors did not assume any degree of risk if the project failed. Big Issue Invest also received a percentage of outcomes paid in addition to its loan repayments with interest, so had the potential to share in the outcomes payments received from the GLA. 

   Thames Reach assumed the direct financial risks of low performance. The organisation chose to use this approach (a direct provider model) to minimise the transaction costs associated with establishing a SIB contract. This also meant that if successful, Thames Reach would gain substantial surpluses from the outcomes payments from the GLA (funded by MHCLG), after repaying the two investor loans, to put toward other programmes. 
   

   As part of the loan agreement with Big Issue Invest, the investor was given observer status on the Thames Reach Board, and this relationship in particular progressed in a manner that has become a long-term partnership and, as Thames Reach explain in a note reflecting on their key areas of learning from the SIB, the organisation greatly valued the support provided by the investors within the framework of accountability in delivering on the outcomes. 

   Source: PIRU Evaluation of the SIB Trailblazers, 2018.

2. Understanding the target cohort

   One of the main learnings derived by Thames Reach from their SIB experience was the need to fully understand the cohort against which the outcome targets are set. 

   This view is echoed in the final evaluation of the SIB, which argues that in SIB or PbR contracts, careful consideration should be given to the cohort defined. In this SIB, the cohort was broad and heterogenous, and a more tightly defined cohort could focus support solely on the most entrenched. While the Navigator intervention model is effective in supporting rough sleepers, for the most entrenched rough sleepers, three years might not be sufficient to achieve sustained outcomes.

   Source: Qualitative Evaluation of the London Homelessness SIB, Final Report Executive Summary, 2017.
   

3. The impact of external factors on SIB performance

   The final qualitative evaluation of the SIB highlighted the importance of external, contextual factors in the performance of the SIB. The availability of appropriate accommodation was a key factor in supporting the cohort to stable tenancies. The lack of appropriate housing outside of hotels, single bed flats, and supported housing for those with high levels of complex needs were particular gaps in provision. The changes to benefit entitlement that took place during the SIB as part of the government's welfare reform agenda was another factor. The complexities of the benefits system, including appeals, took a significant amount of Navigator resource to address, limiting the time for other activities. The availability of specialist provision was also highlighted throughout the three years of the evaluation as the key challenge in addressing clients' health and wellbeing needs. 

   Source: Qualitative Evaluation of the London Homelessness SIB, Final Report Executive Summary, 2017.

4. End of programme planning

   Exit plans

   Both the provider and wider stakeholders involved in the project highlighted that a key issue for the final year to be the development of exit strategies for individual clients so that when the contract ends, appropriate support is in place. Although the level of support provided by the service was tailored to the client and aimed to build capacity for independent, stable living there was a risk for clients who had required up to three years of intensive key worker support once this comes to an end. Investors shared a concern in relation to the sustainability of the outcomes achieved by the SIB. They highlighted that there were no plans to mainstream an intervention for the cohort and others with their characteristics, by the commissioners, following the end of the SIB.

   Staff retention

   Another key challenge identified by the interim evaluation of the SIB was around how to maintain support until the end of the contract for staff on fixed-term contracts. Navigators were employed to work on the SIB and as the project neared its end they began to look for their next opportunity, within or outside of their host organisations. This may impact on the ability of the provider to deliver outcomes to the end of the contract.

   Source: Qualitative evaluation of the London homelessness SIB, Second interim report, 2015.