can social impact bonds influence social policy for the better?

Can Social Impact Bonds influence social policy for the better?

Bridges Social Sector Funds

April 2015

Innovative investments that make a difference

Strictly Private and Confidential

0%

25%

50%

75%

100%

1870 1890 1910 1930 1950 1970 1990 2010

France

UK

USA

“Capital in the 21st Century”, Thomas Piketty, April 2014

What is the social state in an OECD country?G

overn

ment

spend a

s %

of N

ational In

com

e

UK

£750bn

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So what is the problem? Rising demand…

UK Social Services demandOECD Heathcare demand

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“Enough is enough”, Centre for Social Justice, June 2014

So what is the problem? … poor outcomes

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What is the problem?

Typical outcomes for neglected children:

• Less likely to succeed at school

• Less likely to find a job

• More likely to commit a crime

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What is the cost?

92,000 ‘Looked After Children’ in the UK

Foster Care £40,000 p.a.

Residential care home £100,000 p.a.

Secure children’s home £200,000 p.a.

Average reoffending rate 73%

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The state traditionally delivers services itself

State

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Sometimes the state commissions another entity to deliver activity

Outcomes

Activities

State

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What if we could pay for outcomes?

Outcomes

State

££ Innovation

Delivery

Expertise

Capital Enterprise

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Web: iaamadoption.org Twitter: @iaamadoption

An example of social entrepreneurship

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Example: the IAAM Adoption programme

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Up-front commitment from

Investors

6 charities will find, train and support families

Up to 2,000 children could be placed

Example: the IAAM Adoption programme

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54,000

750,000

Cost to find a family Cost of foster care

Cost per child (£)

Example: the IAAM Adoption programme

Our goal over the next ten years is to help 2,000

children find loving, stable families.

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Will SIBs change social policy for the better?

Ask them in 10 years’ time…

15

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