Publications

In the context of Kenya’s arid and semi-arid lands (ASALs), NGOs and donors as well as private sector players are exploring how they can help vulnerable populations to prepare and build resilience to extended drought sequences and climate volatility. The use of solar-powered water pumps (SWPs) is one approach through which partners are helping to do this. This research report by Social Finance and Oxfam is a concept-stage exploration of optimal funding mechanisms to accelerate and incentivize the adoption of SWPs in the Kenyan ASALs, alongside accompanying management systems to ensure financial viability, inclusion and accountability.

Power to Change and Social Finance are calling on local authorities to rethink the way they make investments in pursuit of income for local services.  In a paper published today, the independent trust supporting community businesses and not-for-profit organisation highlight how councils can invest in the community in a way that delivers economic, social and environmental benefits for council taxpayers, at the same time as delivering a financial return for councils.  They highlight enlightened local authorities already pursuing this strategy and call on more to use their balance sheets and access to flexible, long-term finance from the Public Works Loan Board to better benefit the communities they serve.

Outcomes Funds - Path to Scale

Outcomes Funds sit at the intersection of programmatic and results-based approaches to the distribution of development assistance. We have explored their promise in a brief working paper.

Developed together with Dr Mark Kerr from the University of Kent, this outcomes framework sets out a comprehensive approach to thinking about and measuring the progress and outcomes of young people leaving care. It is based on an extensive review of the evidence for the outcomes currently experienced by care leavers, and encourages a focus on foundational outcomes such as accommodation, health and wellbeing and relationships, which are fundamental to sustaining employment, education and training. Our ambition is for this framework to be used by anyone who works with young people leaving care.

We are currently piloting this framework and would love to hear any feedback you have on it, and to learn from your anonymised data collected from the framework. Please get in touch at leavingwell@socialfinance.org.uk.

In 2012, the Department for Work and Pensions (DWP) launched the £30 million Innovation Fund in order to support vulnerable young people at risk of becoming Not in Education, Training or Employment (NEET). The Fund marked a commitment to helping some of the most vulnerable young people in society overcome long term structural barriers preventing them from gaining qualifications and starting a career, and focussed specifically on payment by results programmes targeting 14–16 year olds most at risk.

The Energise programme and the Teens and Toddlers programme were two of the 10 Social Impact Bond projects delivered over the three years to Autumn 2015 to meet the Innovation Fund’s objectives. Both projects were aimed at supporting young people aged 14 to 16 who are at risk of becoming NEET over a three and a half year period. The Teens and Toddlers programme combined an 18-week intensive intervention with regular support through to GCSEs, while Energise comprised a combination of mentoring, structured activity days and residential courses in order to equip young people with the skills that would allow them to remain on track to age 18.

The projects marked a shift in governmental approach to at-risk youth: by intervening as early as age 14, the Innovation Fund was structured to prevent the likelihood of young people becoming NEET rather than support these individuals once they had already fallen out of employment, education or training. Following on from our previous ‘Year in Review’ publication, this document is intended to share our learnings and reflect on the successes of Energise and Teens and Toddlers programmes now that they have completed.

Written in conjunction with Big Society Capital and the Association for British Credit Unions, Building the case for social investment in credit unions looks at the potential for social investment to help grow the credit union sector. The report explores the opportunity within the landscape for social investment, how credit unions can make themselves more appealing to social investors and the benefits of investing in these organisations.

Written in partnership with the Children’s Investment Fund Foundation, this paper explores the concept of evaluation in relation to Impact Bonds. The paper describes three levels of evaluation that may take place within an Impact Bond, but focuses on considerations around ‘Contractual Outcomes Metrics’ – the metrics against which Impact Bond payments are or aren’t made that carry with them both financial and reputational risk for outcomes funders and investors.

How will the UK make progress on improving the life chances of its most vulnerable young people?  The answer depends on knowing – based on solid evidence – who the most vulnerable are.

To that end, Social Finance, Newcastle City Council, and Impetus-PEF have launched  New Insights Into Improving Outcomes for At Risk Youth: The Newcastle Experience, a rigorous analysis of 8000 17-19 year olds in Newcastle which identifies the risk factors that best predict becoming NEET and a range of other poor outcomes.

The wider implication of this analysis is that government can clearly identify which school pupils are most likely to become NEET as young adults, and can effectively target scarce resources to them. Several new government programmes offer strong opportunities to make use of these insights.

A new report written by Social Finance for Power to Change has been launched today, to examine how community businesses have fared under ongoing government austerity and uncertain economic conditions.

The report shows how community businesses are thriving despite local challenges and highlights the role of these organisations in creating better places and a sense of community pride. The research also found that community businesses are important to the economy, generating £900 million income on £1.4 billion of assets and engaging with 170,000 volunteers.

Other key findings (as at the end of 2015) include:

• Three sectors account for around 3,000 community businesses – transport, food and farming, and leisure.
• Areas with potential for growth include health and social care, and digital.
• Community energy schemes increased by 40% as organisations took advantage of tax benefits, but now face challenges in the coming year as government schemes come to an end.
• While survey respondents expressed high levels of satisfaction with support provided, 73% of community businesses said there were some gaps in support available to them. Power to Change aims to provide business and technical support to help organisations like these improve their sustainability.

Social Finance has joined leading charities, sector leaders and social investors in identifying the 2015 Spending Review as a key opportunity to focus public finances more sharply on achieving better outcomes for a range of disadvantaged groups that have suffered consistently poor outcomes.

We support the idea that the Spending Review should establish a significant ‘Local Outcomes Fund’ of £1.0-£1.5bn that can work towards improved outcomes for four key groups:

• Over 700,000 young people in need of apprenticeships or at risk of being Not in Education, Employment or Training (NEET)
• Over 50,000 households who are statutorily homeless and tens of thousands more on the border of homelessness
• Over 1.2m people in contact with mental health services
• Over 68,000 Looked After Children, children on the edge of care and children at risk of going into care.

We believe that the creation of a Local Outcomes Fund could lead to significant improvements in outcomes for these groups as well as value-for-money for the taxpayer. The report below is a summary of this proposal.

More than three thousand preventable deaths and many thousands of serious injuries from road trauma occur every day. More than 1.2 million people currently die on the world’s roads each year, with an estimated cost of 2-3% of global GDP. Road fatalities are projected to increase to almost two million by 2020 unless substantial efforts to improve road safety are implemented. The toll is highest in developing countries, where new motorisation is rapid and more than ninety percent of fatalities occur. The social and economic consequences are so significant that road safety has been recognised in the United Nations (UN) sponsored Decade of Action for Road Safety and the draft Sustainable Development Goals (SDGs) as a priority public health issue. If unaddressed, it threatens to impede sustainable development and hinder progress. The actions needed to improve road safety are well understood: build safer roads, improve vehicle safety, reduce speeds and encourage safe road user behaviour. Significant analysis has gone into attributing economic value to the effect these ‘safe system’ interventions can have on reducing crashes and the severity of their consequences. Still, there are major gaps in capacity to deliver the elements for safety in many countries and, critically, in the evidence base that can unlock those elements at scale.

The focus of this paper is to set those foundations for how funding and finance can be directed more consistently to creating safe systems. There are three key sections: The need and imperative for action on road safety; the potential of social impact investment; and how these can be brought together to build the case for investment in road safety and map a way forward.

Shared Lives is a little known, but important, alternative to home care and care homes for people in need of support. Shared Lives offers personalised, quality care where carers share their lives and often their homes with those they support. In 2010, England’s care inspectors, the Care Quality Commission, gave 38% of Shared Lives schemes the top rating of excellent (three star): double the percentages for other forms of regulated care.

There are now around 15,000 people supported through Shared Lives schemes, but the scope for expansion is significant. Over the last six months, with the support of the Cabinet Office, Social Finance, Shared Lives Plus and Community Catalysts have been working closely with four local authorities – Lambeth, Leeds, Manchester and Newham – to explore a model for expanding Shared Lives with social investment.

A central element of the work has been identifying which groups of people would most benefit from Shared Lives, and for whom support in Shared Lives would be more cost-effective than other forms of care. Although the primary reason for expanding Shared Lives is the social benefit, the conclusions drawn from this work also indicate that expanding Shared Lives could provide significantly greater value for money than many other forms of care.

The thoughts included in this guide represent Social Finance’s experience to date in developing SIBs. We will learn more and refine this process on future projects. We hope to learn from others’ approaches. This is a new and changing market and we hope this guide provides a useful template for developing approaches to shift more resource into prevention work. While this report focuses on Children Services, we believe there is potential for SIBs to offer solutions in other local authority services areas where there is potential for significant social impact.

Social Finance is committed to providing a range of support for those interested in developing SIB proposals. This could range from full engagement through a detailed feasibility study of a particular intervention or issue area to help with specific parts of the SIB development process (see below for further details of this process). We are aiming to provide a set of tools to help minimise the costs of developing these products and we hope that this guide – which is intended to be freely available – is a useful start point.

We are delighted to present the findings of a pension fund survey carried out by Finethic and Social Finance. The survey is the most comprehensive canvass (to date) of opinion leaders in the UK pension fund industry about their attitudes towards Impact Investment.

The Impact Investment market requires innovation, commitment and significant pools of capital to enable social businesses to grow and deliver at scale. It offers products that deliver financial returns alongside measurable social impact. Its success will be judged in part on the size of the capital flows it attracts from institutional investors (e.g. pension funds). Unlike some of their peers in the Netherlands, Scandinavia, Switzerland, and the USA, pension funds in the UK have been slow to consider Impact Investment in their portfolios. The survey was an attempt to understand why.

We wanted to assess the level of Impact Investment undertaken today by UK pension funds, the appetite for future Impact Investment, and the level of awareness of Impact Investment, as well as to raise awareness within the Industry of the Impact Investment “asset class” and some of the investment opportunities on the market.

In this report you will find the results of 47 organisations who took part in the survey. Together they hold £143bn AUM and serve 4 ½ million pension holders.

Public service mutuals represent a significant and very exciting opportunity for improving public service delivery. Usually structured as social enterprises that adhere to the values of employee-ownership, mutuals have a unique potential to combine the social ethos of public services with an organisational structure that enables them to embrace social challenges in more flexible and entrepreneurial ways.

However, should mutuals fail to adjust quickly to the new commercial environment which they face once they have ‘spun-out’ of the public sector, they may find that they lose contracts to public or private sector competitors – competitors who are often able to fund new developments or absorb losses for the sake of building market share. Spinning out of the public sector with few assets, external funding is therefore vital for most mutuals that are seeking to consolidate their role and develop their services.

Written by Ben Jupp, Dan Gregory and Ben Williams, this paper highlights the nature of the opportunities and challenges mutuals will face in securing the investment they require, regardless of their size or the stage of spinning-out at which they are at.

Social Impact Bonds are a form of financing that aligns investor returns with social outcomes: investors only receive a return if the social outcome is achieved. Since Social Finance launched the first Social Impact Bond in September 2010 to reduce re-offending among short sentenced prisoners leaving Peterborough Prison, the concept has attracted considerable interest. There is, however, a long way to go before they are commonly used. Like any new approach, it will take a while for people to understand when and how to establish Social Impact Bonds. The purpose of this paper is to help commissioners consider how best to develop and procure Social Impact Bonds.