Skip to main content
×
Home

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.

  • View HTML
    • Send article to Kindle

      To send this article to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle.

      Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

      Find out more about the Kindle Personal Document Service.

      Social Impact Bonds: The Role of Private Capital in Outcome-Based Commissioning
      Available formats
      ×
      Send article to Dropbox

      To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your Dropbox account. Find out more about sending content to Dropbox.

      Social Impact Bonds: The Role of Private Capital in Outcome-Based Commissioning
      Available formats
      ×
      Send article to Google Drive

      To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your Google Drive account. Find out more about sending content to Google Drive.

      Social Impact Bonds: The Role of Private Capital in Outcome-Based Commissioning
      Available formats
      ×
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.
References
Hide All
Boyle D. (2011), ‘The pitfalls and perils of payment by results’, Local Economy, 26, 8, 627634.
Bridges Ventures (2016), Better Outcomes, Better Value: The Evolution of Social Impact Bonds in the UK, London: Bridges Ventures LLP.
Cabinet Office (2010), ‘Modernising Commissioning: Increasing the role of charities, social enterprises, mutuals and cooperatives in public service delivery’, London: Cabinet Office.
Cabinet Office (2011), ‘Open Public Services: White paper’, London: Cabinet Office.
Cabinet Office (2014), ‘Open Public Services: 2014 progress report’, London: Cabinet Office.
Cabinet Office (2016a), ‘Social investment: a force for social change: 2016 strategy’, London: Cabinet office.
Cabinet Office (2016b), ‘Life Chances Fund’, London: Cabinet Office.
Cabinet Office (2016c), Centre for Social Impact Bonds, https://data.gov.uk/sib_knowledge_box/social-impact-bonds-sibs [accessed 07.05.2016].
Carter E. and Whitworth A. (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.
Conservative Party (2010), ‘The Conservative Manifesto 2010: Invitation to join the government of Britain’, London: Conservative Party.
Considine M., Lewis J. and O'Sullivan S. (2011), ‘Quasi-markets and service delivery: flexibility following a decade of employment assistance reform in Australia’, Journal of Social Policy, 40, 4, 811833.
Cooper C., Graham C. and O'Dwyer B. (2013), ‘Social impact bonds: can private finance rescue public programs?’, Paper presented at Accounting, Organizations and Society Conference on “Performing Business and Social Innovation through Accounting Inscriptions”, Galway, Ireland.
Department for Communities and Local Government (DCLG) (2015), ‘Qualitative evaluation of the London homelessness social impact bond: second interim report’, London: Department for Communities and Local Government.
Disley E., Rubin J., Scraggs E., Burrowes N. and Culley D. (2011), ‘Lessons learned from the planning and early implementation of the Social Impact Bond at HMP Peterborough’, Research Series 5/11, Cambridge: RAND Europe.
Department for Working and Pensions (DWP) (2014), ‘Innovation Fund Pilots Qualitative Evaluation’, Sheffield: Department for Work and Pension.
Department for Working and Pensions (DWP) (2015), ‘Youth Unemployment Innovation Fund Pilot: Starts and Outcomes, London: Department of Work and Pensions.
Department for Working and Pensions (DWP) (2016), Qualitative evaluation of the DWP Innovation Fund: Final report, Research Report No 922, London: Department of Work and Pensions.
Edmiston D. and Aro J. (2016), Public Policy, Social Innovation and Marginalisation in Europe: A Comparative Analysis of Three Cases. CRESSI Working Paper Series No. 33/2016. Oxford: University of Oxford.
Eikenberry A.M. and Kluver J.D. (2004), ‘The marketization of the nonprofit sector: civil society at risk?’, Public Administration Review, 64, 2, 132140.
Finn D. (2011a), ‘The design of the Work Programme in international context’, London: National Audit Office.
Finn D. (2011b), ‘Job services Australia: Design and implementation lessons for the British context’, Leeds: Corporate Document Services.
Fox C. and Albertson K. (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.
Fraser A., Tan S., Lagarde M. and Mays N. (2016), ‘Narratives of promise, narratives of caution: A review of the literature on Social Impact Bonds’, Social Policy & Administration.
Gustafsson-Wright E., Gardiner S. and Putcha V. (2015), ‘The potential and limitations of impact bonds: lessons from the first five years of experience worldwide’, Washington, DC.: Brookings Institute.
Hudson M., Phillips J., Ray K., Vegeris S. and Davidson R. (2010), ‘The influence of outcome-based contracting on provider-led pathways to work’, Department of Work and Pensions London.
McHugh N., Sinclair S., Roy M., Huckfield L. and Donaldson C. (2013), ‘Social impact bonds: a wolf in sheep's clothing?’, Journal of Poverty and Social Justice, 21, 3, 247257.
National Audit Office (NAO) (2015), ‘Outcome-based payment schemes: government's use of payment by results’, London: National Audit Office.
NCVO (2016), ‘UK Civil Society Almanac 2016’, London: National Council for Voluntary Organisations.
Nicholls A. and Tomkinson E. (2015), ‘The Peterborough Pilot Social Impact Bond’, in Nicholls A., Paton R. and Emerson J. (eds.), Social Finance, Oxford: Oxford University Press.
Organisation for Economic Co-operation and Development (OECD) (2015), ‘The Innovation Imperative in the Public Sector: Setting an Agenda for Action’, Paris: Organisation for Economic Co-operation and Development.
OPM (2015), ‘Evaluation of the Essex MST SIB’, London: OPM.
Propper C. and Green K. (2001), ‘A larger role for the private sector in financing UK health care: the arguments and the evidence’, Journal of Social Policy, 30, 4, 685704.
Rees J. (2013), ‘Public sector commissioning and the third sector: Old wine in new bottles?’, Public Policy and Administration, 29, 1, 4563.
Rees J., Whitworth A. and Carter E. (2014), ‘Support for all in the UK Work Programme? Differential payments, same old problem’, Social policy & administration, 48, 2, 221239.
Ronicle J., Stanworth N., Edward H. and Fox T. (2014), ‘Social Impact Bonds: The State of Play: Full Report’, Commissioning Better Outcomes Evaluation, London: Big Lottery Fund.
Ronicle J., Fox T. and Stanworth N. (2016), ‘Commissioning Better Outcomes Fund Evaluation: Update Report’, London: Big Lottery Fund.
Sinclair S., McHugh N., Donaldson C., Roy M. and Huckfield L. (2014), ‘Social Impact Bonds: Shifting the Boundaries of Citizenship’, in Farnsworth K., Irving Z. and Fenger M. (eds.), Social Policy Review 26: Analysis and Debate in Social Policy, Bristol: Policy Press, 111128.
Social Finance (2009), ‘Social Finance Welcomes the Government's Initiative to Pilot Social Impact Bonds,’ London: Social Finance.
Social Finance (2016), ‘Social Impact Bonds: The Early Years’, London: Social Finance.
St Mungo's Broadway (2015), ‘Street Impact: Stories from the street - holistic approaches to lasting recovery’, London: St Mung's Broadway.
Thames Reach (2015), ‘Social Impact Bond for Entrenched Rough Sleepers – Key Areas of Learning’, London: Thames Reach.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Journal of Social Policy
  • ISSN: 0047-2794
  • EISSN: 1469-7823
  • URL: /core/journals/journal-of-social-policy
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×
Type Description Title
WORD
Supplementary Materials

Edmiston and Nicholls supplementary material
Edmiston and Nicholls supplementary material

 Word (19 KB)
19 KB

Metrics

Altmetric attention score

Full text views

Total number of HTML views: 486
Total number of PDF views: 1464 *
Loading metrics...

Abstract views

Total abstract views: 1884 *
Loading metrics...

* Views captured on Cambridge Core between 4th April 2017 - 21st November 2017. This data will be updated every 24 hours.