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Social Impact Bonds: The Role of Private Capital in Outcome-Based Commissioning

  • DANIEL EDMISTON (a1) and ALEX NICHOLLS (a2)
Abstract
Abstract

Social impact bonds are payment by results contracts that leverage private social investment to cover the up-front expenditure associated with welfare services. The introduction of private principles and actors through outcome-based commissioning has received a great deal of attention in social policy research. However, there has been much less attention given to the introduction of private capital and its relation to more established forms of quasi-marketisation. This paper examines what effect private social investment has on outcome-based commissioning and whether the alternative forms of performance measurement and management, that social impact bonds bring to bear on service operations, demonstrate the capacity to engender: innovation in service delivery; improved social outcomes; future cost savings; and additionality. This paper draws on an in-depth study of four social impact bonds in the UK context, as the welfare regime at the vanguard of this policy development. The findings suggest that the introduction of private capital in outcome-based commissioning has had a number of unique and unintended effects on service providers, operations and outcomes. The paper concludes by considering whether social impact bonds represent a risk or an opportunity for public service reform both in the UK and further afield.

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Copyright
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.
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This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

D. Boyle (2011), ‘The pitfalls and perils of payment by results’, Local Economy, 26, 8, 627634.

E. Carter and A. Whitworth (2015), 'Creaming and Parking in Quasi-Marketised Welfare-to-Work Schemes: Designed Out Of or Designed In to the UK Work Programme?', Journal of Social Policy, 44, 2, 277296.

M. Considine , J. Lewis and S. O'Sullivan (2011), ‘Quasi-markets and service delivery: flexibility following a decade of employment assistance reform in Australia’, Journal of Social Policy, 40, 4, 811833.

A.M. Eikenberry and J.D. Kluver (2004), ‘The marketization of the nonprofit sector: civil society at risk?’, Public Administration Review, 64, 2, 132140.

C. Fox and K. Albertson (2011), ‘Payment by results and social impact bonds in the criminal justice sector: New challenges for the concept of evidence-based policy?’, Criminology and Criminal Justice, 11, 5, 395413.

A. Fraser , S. Tan , M. Lagarde and N. Mays (2016), ‘Narratives of promise, narratives of caution: A review of the literature on Social Impact Bonds’, Social Policy & Administration.

N. McHugh , S. Sinclair , M. Roy , L. Huckfield and C. Donaldson (2013), ‘Social impact bonds: a wolf in sheep's clothing?’, Journal of Poverty and Social Justice, 21, 3, 247257.

A. Nicholls and E. Tomkinson (2015), ‘The Peterborough Pilot Social Impact Bond’, in A. Nicholls , R. Paton and J. Emerson (eds.), Social Finance, Oxford: Oxford University Press.

J. Rees (2013), ‘Public sector commissioning and the third sector: Old wine in new bottles?’, Public Policy and Administration, 29, 1, 4563.

J. Rees , A. Whitworth and E. Carter (2014), ‘Support for all in the UK Work Programme? Differential payments, same old problem’, Social policy & administration, 48, 2, 221239.

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Journal of Social Policy
  • ISSN: 0047-2794
  • EISSN: 1469-7823
  • URL: /core/journals/journal-of-social-policy
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