The Greater London Authority (GLA) has awarded Social Impact Bond contracts to two providers to pay for interventions to tackle rough sleeping in London. The Department of Communities and Local Government (DCLG) will transfer funding to the GLA for the SIB outcomes payments worth up to £5 million.
In 2012, Social Finance worked with GLA and DCLG to assess the feasibility of a Social Impact Bond to help address the needs of entrenched rough sleepers in London. On the back of this work, in April 2012, GLA launched a procurement process to select service providers to deliver sustained outcomes. Over the following six months, Social Finance continued to advise GLA on programme design and investment structures.
Rough sleepers continue to be amongst the most vulnerable people in society, with the average age of death of individuals in hostels or registered with homelessness services 40-44 years. Over half of identified rough sleepers in London have one or more support needs, including alcohol and substance misuse and mental health needs.
London is estimated to account for over half of all rough sleeping in England, with 5,678 individuals sleeping rough in the year 2011-2012. The cohort of entrenched rough sleepers targeted by the Social Impact Bonds includes 831 individuals who have been recorded rough sleeping and/or have stayed in a London rough sleeping hostel in the last three months, and who have been recorded rough sleeping at least six times over the last two years.
Structure of the Social Impact Bond
Social Impact Bonds are being used to develop new, additional services tailored to the individual needs of this cohort of rough sleepers over a three year period. Public sector payment for these services is contingent on the extent to which agreed outcomes are achieved. Social investment has been raised by service providers in order to cover the upfront costs of delivering improved outcomes.
Social Impact Bond services will focus particularly on:
- Bringing together fragmented borough-based services and commissioning;
- Maximising the value of existing services by connecting provision with need; and
- Re-centring provision around the needs of the individual.
As the rough sleeping cohort has multi-dimensional needs, five outcome metrics were identified to assess the effectiveness of Social Impact Bond-funded interventions in sustaining the cohort to live off the streets. The metrics are intended to incentivise substantial additional progress beyond the core outcome to reduce rough sleeping. They include:
- Reduction in the number of individuals with a bedded down street contact each quarter;
- Confirmed sustainment of tenancy in a non-hostel setting;
- Confirmed reconnection to a country in which individual enjoys local connections;
- A decrease in the average number of A&E episodes per person per year.