Scaling The Skill Mill through a Social Outcomes Partnership
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The Skill Mill is an intensive six-month work programme, combining paid jobs, training and mentoring, designed to help vulnerable young people break the cycle of reoffending and gain work experience.
The Social Outcomes Partnership (SOP) – drawing on Social Finance’s expertise in outcomes based finance, programme design, capacity building and performance shaping – enabled The Skill Mill to scale, from two sites to eight 8 local authority areas across England, and to support 243 young people – more than 90 per cent of whom did not reoffend.
In March 2026 the Skill Mill went on to launch a second, larger SOP to expand its services across 22 local authorities.
The impact
Figures from the independent final evaluation [PDF] by the Policy Evaluation & Research Unit at Manchester Metropolitan University, published in January 2025. It tracked outcomes for the 243 young people who started the programme across the eight sites.
Social Finance’s role
Social Finance supported The Skill Mill to set up the SOP from initial feasibilty through to mobilisation and performance management. Our work included:
• Conducting a short SOP/SOP feasibility study for The Skill Mill’s unique intervention model;
• Developing the commercial model and governance, and building capacity to work to outcomes and take on social investment;
• Designing an innovative funding structure with a mix of outcomes income from local authorities and LCF alongside employer controbutions for work delivered by participants
• Coordinating stakeholders from design through to mobilisation, including negotiating and adapting delivery with eight* councils and four investors during the Covid19 pandemic;
• Raising £1.1m of investment from four social investors: Northstar Ventures, Big Issue Invest, CAF Venturesome and Resonance
* The SOP launched in seven local authorities in August 2020, with West Sussex joining in February 2021. The eight delivery sites were Birmingham, Croydon, Durham, Leeds, Nottingham, Rochdale/Bury, Surrey and West Sussex.
Challenges
The launch in August 2020 coincided with the COVID-19 pandemic, which was the primary reason for under‑performance against some targets, particularly progression into work in the months following the programme (62.7% of the job or further training target was achieved). Life Chances Fund rules did not allow an extension of the programme, so The Skill Mill had to run the final two cohorts simultaneously – a significant operational stretch.
The combined effect of the pandemic, the doubled-up final cohorts and a shortfall in commercial sales meant the SOP was unable to return investors’ capital in full.
The evaluation is also candid about the challenges of the SOP itself: the local authorities involved had had limited prior experience of social-outcomes investment; running the Special Purpose Vehicle (Skill Mill Partnerships Ltd) came to around 10% of total programme cost; and the investors and Skill Mill had some different expectations around performance reporting and risk appetite.
Reflections: when is an outcomes contract a suitable scaling mechanism?
The Skill Mill Social Outcomes Partnership (SOP) raised an important question for the wider sector: under what conditions can outcomes-based contracting help a social enterprise to scale?
Three factors stand out.
- Evidence of impact.
Investors in an outcomes contract need confidence not only in the enterprise’s commercial viability but in its ability to deliver social outcomes. The Skill Mill had years of monitoring data and an independent academic study of its model, which gave investors and local commissioners the confidence to budget for payment over the life of the programme. - Delivering commercial and social value.
A SOP can be a route for a social enterprise to monetise the social value it creates. In The Skill Mill’s case, the contribution from the Life Chances Fund and the programme’s commercial sales revenue meant local authorities captured the full social value of the programme at roughly a third of the cost they would otherwise have carried. - Tolerance for risk and a willingness to adapt.
The Skill Mill SOP was unusual: it had no single lead commissioner, eight local commissioners, small cohorts reflecting the intensive nature of the service, and a commercial revenue stream built into the fund flows. Making it work required all parties – Skill Mill leadership, investors and commissioners – to demonstrate flexibility, healthy risk appetite and a shared commitment to the young people the programme exists to serve.
What we learned
For Social Finance, the Skill Mill partnership reinforced several lessons that continue to shape our approach to Social Outcomes Partnerships:
- The value of match funding from a central outcomes fund in making locally‑commissioned outcomes contracts affordable for cash‑constrained councils;
- The importance of investing in the central capacity of social enterprise partners — particularly around sales pipelines and data — when commercial revenue is part of the model;
- The need to plan early for sustainability beyond the contract, recognising that, without a statutory funding stream, continuation in all delivery sites cannot be assumed;
- The continuing relevance of outcomes‑based contracting as a route to scale impact‑led organisations, even where, as here, the operating environment turns out to be radically different from the one anticipated at launch.
Looking to the future
In March 2026 The Skill Mill launched a second, larger Social Outcomes Partnership across up to 22 local authorities in England and Wales – a powerful signal that the model we helped pioneer in 2020 is now reaching national scale.
The Life Chances Fund, which co‑funded the original partnership, closed in March 2025. A separate DCMS / GO Lab report, Achieving outcomes: Life Chances Fund final report assesses the performance of the fund across all 29 projects.