Innovative financing mechanisms for levelling up social outcomes

Budgetary pressures and uncertainty feature prominently in policy discussions. Drawing on advances made in pricing and payment mechanisms within health and climate policies, this report explores transferrable insights for financing measures designed to level up social outcomes.

Key findings:

• Drawing lessons from pharmaceutical pricing, governments can use risk sharing features instead of allowing uncertainty to hinder investment into social issues.
  
• Using flexible payment mechanisms with risk-sharing features can bring broader and long-term value into policy considerations.
  
• When budget responsibilities do not align with multiple causes of complex issues, pooled funds can be created through multi-level and cross-departmental initiatives.
  
• Drawing on advances made in climate policy, policy gaps and local priorities can be aligned to explore novel financing mechanisms to access untapped sources of funding.

Addressing today's pressing policy issues calls for a multidisciplinary approach. By extending the lessons learned to other settings, this report challenges current practices that define ‘value’ primarily in terms of short-term financial savings and explores new financing mechanisms to improve value for money and long-term outcomes.

You can find out more about the initiatives described in this report on GO Lab blogs on Using Pay-for-Success contracts and value-based pricing to incentivise discovery of new uses for off-patent medicines and A local marketplace for social outcomes.

You can also watch our short video below which explains our motivation for this research collaboration with Chartered Institute of Public Finance and Accountancy (CIPFA) and reflects on the key insights from the report.