Cover: Evaluation of the Social Impact Bond Trailblazers in Health and Social Care

Evaluation of the Social Impact Bond Trailblazers in Health and Social Care

Final Report

Published in: PIRU (Policy Innovation Research Unit), Number 2018-23 (July 2018)

Posted on Jul 20, 2018

by Alec Fraser, Stefanie Tan, Kristy Kruithof, Megan Sim, Emma Disley, Chris Giacomantonio, Mylene Lagarde, Jennifer Rubin, Nicholas Mays


Social Impact Bonds (SIBs) are a relatively new type of payment for performance (P4P) contract focused on outcomes (i.e. 'payment by results' (PbR)) in which public service commissioners partner with private for-profit or philanthropic social investors to finance interventions to tackle social problems. These services are often delivered by third sector provider organisations. SIB specialist organisations may play important coordinating roles. The investors provide the up-front finance to mount the intervention and are repaid, including an agreed premium, if specified client outcomes are achieved. Sometimes, the intention is that the premium to investors should be paid wholly or in part from cashable savings generated for the commissioner. If the outcomes are not met, the investors stand to lose all their initial investment. The overall aim of this evaluation was to assess the potential costs and benefits, for different actors involved, of the SIB Trailblazer programme in health and social care over three years from the planning stage to their early years of service provision, June 2014-May 2017.


Literature review to develop a conceptual framework to guide subsequent data collection and analysis; analysis of Trailblazer plans and contracts; semi-structured interviews with national policy makers, local participants in Trailblazer SIBs (commissioners, investors, SIB specialist organisations and providers) and local participants in comparable non-SIB services. Planned quantitative comparison of SIB and non-SIB sites providing similar services to similar clients via the same providers proved impossible due to problems of finding suitable comparators, data access and data quality.


Of the nine sites in the programme, four eventually decided not to proceed to a SIB for a variety of reasons. The five SIBs that went ahead funded a wide range of different interventions for different clients: older people who are socially isolated; people with multiple chronic health conditions; entrenched rough sleepers; adolescents in care; and people with disabilities requiring long-term supported living. Typically, the planning of the SIB services and subsequent oversight were better resourced and the services more flexibly provided than similar non-SIB services. Investment came from philanthropies and socially minded investors rather than commercial sources. Three models of SIB were identified: Direct Provider SIB; SIB with Special Purpose Vehicle (SPV); and Social Investment Partnership (an evolution of the SIB concept without payments being tied to outcomes). Each allocated financial risks differently, with providers bearing more of the financial risk in the Direct Provider model than in the others. Front-line staff were more aware of the financial incentives associated with meeting client outcomes in the Direct Provider model than in the SPV model. Likewise, providers in the Trailblazers were more outcome-focused than providers of comparable non-SIB services. Up-front financing of providers by investors tended to be provided in instalments contingent on hitting volume and/ or throughput targets. During the three-year evaluation which covered the early period of the Trailblazers, the bulk of the payments to investors came from central government and sources such as the Big Lottery rather than local commissioners in most cases. Only one of the Trailblazers reported having made any cashable savings during the evaluation period as a result of the SIB-financed interventions. Only one of the Trailblazers had set up a counterfactual outcome evaluation to use as the basis for making outcome payments to investors in the period of the study. The two SIB specialist organisations involved adopted different roles (intermediary and adviser versus investment manager) and different management styles, accordingly: the one a more 'informal' approach stressing cooperation between commissioners, providers and investors; and the other a more 'formal' style, emphasising contractual obligations and outcome delivery to meet the expectations of investors.


The SIB Trailblazers in health and social care appeared to encourage a stronger emphasis on demonstrating results than comparable non-SIB services but it is not possible to ascertain whether this was translated into better client outcomes. It was difficult to reach a clear verdict on the costs and benefits of SIBs in this field over the three years of the evaluation.

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