by Ben Jupp

The experience of Social Impact Bonds can inform a wider set of relationships to help address social needs, argues a key innovator in the field.

The health and social care system I work in has rarely been in greater need of transformative investment. As demographic and financial pressures threaten to pull it apart, better responses to people’s needs are urgently required.

In my experience, developing more community focused and preventative health and care services will rest on approaches which combine both innovation and rigour. It will rely on strengthening the capacity of services to understand needs, learn from others, adapt and implement change. It will take an approach that looks beyond the annual budgeting of the NHS.

Many Social Impact Bonds seek to change systems
To me, and my colleagues at Social Finance, Social Impact Bonds (SIBs) have always been one tool to support such transformative responses. Take, for example, the Reconnections Service in Worcestershire. It aims to address chronic loneliness, responding to a need that was highlighted by older people in the county themselves.

Establishing Reconnections has involved designing a new service, pioneering long-term cost-benefit analysis on the impact of chronic loneliness, and helping draw together a partnership with a network of half a dozen voluntary and community sector organisations. For the range of commissioners involved, an outcome-based contract was attractive: making payments only if and when the new approach is effective. For the service itself, an outcome-based contract has also enabled flexibility and innovation.

The first year of Reconnections has been hard. Service providers, volunteers and investors have all had to work in ways they had not expected. We have had to learn and adapt. But, slowly, the six charities and community organisations are developing better responses to needs that have often been neglected for far too long, to the detriment of individuals and the health and care system as a whole.

The value of Social Investment Partnerships
Our experience of developing the Reconnections Social Impact Bond and other transformative programmes has also highlighted the value of creating broader Social Investment Partnerships (SIPs) in health and care.

Such Social Investment Partnerships encompass approaches to address social needs which include Social Impact Bonds but also wider forms of collaboration where commissioners, providers and investors share risk and pool knowledge and experience in the design and delivery of services. Highlighting partnerships reflects the need for commissioners, investors and providers to work collaboratively and flexibility, rather than the more adversarial separation between ”purchasers” and ”providers” of services that has characterised the NHS in England for the last 30 years.

For example, in a Social Investment Partnership to improve community-based end of life care, we have been working collaboratively with commissioners and providers for six months to scope out the need jointly. The investors and commissioners have then jointly considered which organisation would be best placed to develop the service; sometimes through a competitive process, sometimes by just building on an existing service.

Alternatives to outcome-based contracts
In such partnerships, we have also found that an outcomes-based contract is only one way to transform services. A focus on the underlying outcomes enabled by a service is important: an outcome-based contract can have significant advantages in terms of allowing service flexibility and providing focus. But for other areas, it’s impossible to capture the full range of people’s needs with a focus on a small number of objectives.

That is why, for example, in our partnerships to develop better Shared Lives social care (the Shared Lives Incubator), we have invested directly in the provider without an outcomes-based contract. Creating the conditions in which someone wants to share their home with another person in need of care is difficult to stipulate in a contract which prioritises one or two impacts. So the investors and commissioners jointly identify the provider, based on their overall qualities and experience. The investor then provides the upfront funding for developing the local service and repayment is made simply as proportion of the service revenue, if and when it grows. In other partnerships, risks are likely to be shared on the basis of a capitated budget – a set amount of funding for the population.

Drawing in investment from a range of sources
Finally, I have found that the concept of a “Social Investment Partnership” draws attention to the need for new resources and capacity and a long-term approach when tackling social challenges, rather than focusing on a particular type of financing. In some of the partnerships which we are building, such as those that develop better employment support for people with health conditions, the source of the funding is a mixture of public sector, charitable and external socially motivated investment. In nearly all such partnerships, we are combining financial investment with access to clinical and operational support. For example, because Health and Employment Partnerships operates across multiple areas, it has the scale to able to employ clinicians and service managers with deep experience of managing similar services before and is helping to manage NHS innovation funding as well as social investment.

I’m proud of the pioneering approaches that my team and colleagues across the sector are engaged in through Social Impact Bonds such as Reconnections. By broadening the approach to developing Social Investment Partnerships, we now have the opportunity to enable a wider range of contractual forms, further blur traditional adversarial relationships, and draw in resources from a number of sources.

These partnerships, whether traditional Social Impact Bonds or a not, are united by a passion for supporting communities and the most vulnerable in particular. They also recognise the importance of both innovation and rigour to achieve social change and ensure that organisations and systems have the capacity to adapt.

Ben Jupp is a Director at Social Finance. He was Director of Public Services Strategy at the Cabinet Office. He has also been Director of the Office of the Third Sector in the Cabinet Office.