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The long march of a Social Impact Bond

By David Robinson

Tiny AcornCommunity Links is proud to have been part of the team, led by Social Finance, that invented, designed and built the world’s first Social Impact Bond, (see our report “Means and Ends“). The SIB which was (re)launched last week as it was announced the One programme in Peterborough will address the needs of short term prisoners leaving Peterborough Prison, and reduce re-offending rates. It’s a challenging and ambitious project and is just the beginning.

Other UK SIB funded programmes are under development at the moment and the model is being examined or actively replicated in several other countries. All good, but what are we to make of the minister Crispin Blunt’s remarks at the official launch on Friday? The SIB, he said, “will be groundbreaking if it works as well as we hope, expect, and require it to.” Might we detect the faintest whiff of desperation in the final verb?

The SIB could start, as St Giles Trust Chief Executive Rob Owen has said, a “revolution in funding,” but the march will not be short. There is much work to be done on building the market beyond a modest set of pilots and onto the new asset class which we ultimately envisage and which would be capable of transforming our public services. This development will demand investment, vision, time and patience from investors, from delivery agencies and from government.

What the SIB cannot deliver is an alternative to the core public services upon which our service users and others in the poorest communities across the UK most heavily depend, and which are now threatened by the public spending cuts which the TUC said this weekend are likely to hit the poor ten times harder than the rich. No matter how smart the financial engineering, public services in communities like ours, and community organisations like Community Links, need public money. Without it, it is not only the welfare of the poorest that will suffer but also the stability and cohesion of our communities and our nation’s prospects for long term economic growth. Any cut for instance in spending on early invention or preventative work, or on reducing anti social behaviour or unemployment, postpones payment, it doesn’t eliminate it, and the later price – both social and financial – will always be higher. The SIB has no place in this short-fix scenario so let us not cripple it now with unrealistic expectations.

What we can expect it to deliver is long-term social change. Ultimately the SIB is the turn key enabling government to shift money from running ambulances at the bottom of the cliff into building fences at the top, without either spending twice or abandoning the most desperate. Grasped with real commitment it can help us to become an early action society – one that prevents social problems from arising rather than one that copes with their consequences. That is expectation enough, a huge and truly revolutionary ambition.

One Response to “The long march of a Social Impact Bond”

  1. [...] now have a financial instrument for supporting early action. The first Social Impact Bond launched this year was over subscribed. We need to seize the moment, build the market and develop [...]

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