Peterborough social bond set to reward investors
0Investors in a social impact bond (SIB) aimed at reducing ex-prisoner reoffending rates are on track to receive payments after results for the first stage were announced.
The Ministry of Justice and Big Lottery Fund will make payments to investors in the Peterborough Social Bond in 2016 if the scheme achieves a reduction in reoffending of more than 7.5% compared to the national baseline
This week’s results showed an 8.4% reduction among the first cohort of 1,000 prisoners, meaning that all 17 investors are likely to recoup the £5m they collectively invested, as well as an additional return.
Sara Llewellin, chief executive of the Barrow Cadbury Trust, one of the investors, said: “We are delighted with the progress made in the first cohort of the Peterborough Social Impact Bond.
“As investors, we wanted to prove that by doing something differently, and by being more flexible, we could indeed create a different outcome.”
Not-for-profit organisation Social Finance launched the Peterborough Social Impact Bond in 2010 as a seven year pilot to test the premise that offering better support to prisoners would help them stay out of prison after release.
The first cohort of prisoners was released from September 2010 – May 2012. During this period, Social Finance set up a new service, which included delivery organisations St Giles Trust, Sova, Ormiston Families, YMCA and, MIND to provide housing, family, health, employment and training support.
David Robinson, chair of the Peterborough SIB advisory board said that reoffending rates for the second cohort are currently 8% better than the first cohort, demonstrating ongoing improvements and learning by those running the services.
He said: “Rehabilitating prisoners demands commitment, proper financial resources and patience. The project was deliberately set up to be a long-term project so that we can learn, improve and refine the best ways of supporting prisoners on release.”
A number of local authorities have either established or are in the process of setting up SIBs.
Essex County Council, the first council to do so, has already made two outcome payments to investors in its bond aimed at supporting vulnerable young people and their families.
Earlier this year, Manchester City Council launched its SIB, aimed at providing support for young people with severe behavioural and emotional issues.
In June, two more local authority SIBs were announced in Worcestershire and Birmingham.
A spokeswoman for Social Finance told Room151: “There is without a doubt momentum in local authorities about looking at this model.”
She said that SIBs were currently being used to provide services currently not commissioned by councils, but that there may be potential to use them to replace services that are being cut due to austerity measures.
Richard Harbord, chief executive of Boston Borough Council said of the model: “It is a very interesting development in the area of invest to save and means that greater attention is given to prevention.
But he warned: “It also presents a considerable challenge for accountants in coming up with proper measurable outcomes.”
