An Investigation of Social Impact Bonds for Health and Social Care

Caregiver with woman in wheelchair

To help the Department of Health to determine the value-added and feasibility of social impact bonds (SIBs), researchers explored whether SIB funding helped achieve better health and social care outcomes, and what the enablers and challenges were of using this funding mechanisms.

The SIB Trailblazers appeared to encourage a stronger emphasis on demonstrating results than comparable non-SIB service providers. However, it is unclear whether this resulted in better client outcomes. Attribution of outcomes to the SIB-financed intervention should be prioritised in future projects, to determine whether SIBs are superior to other more conventional approaches to commissioning.


Social Impact Bonds (SIBs) have recently become part of the public services landscape in the UK and internationally. In a SIB contract, public sector commissioners partner with private or Third Sector social investors to fund interventions that seek to tackle complex social issues. SIB specialist organisations may play important coordinating roles. Under these arrangements, non-government investors cover the upfront costs necessary to set up the interventions implemented by service providers, while the government commissioner commits to pay a return on investment if pre-defined desired outcomes are reached. These payments may be made wholly or in part from cashable savings generated for the commissioner.

In 2013, work began in the field of health and social care to develop SIBs in nine sites across England — collectively known as the SIB 'Trailblazers'.


The Policy Innovation Research Unit at the London School of Hygiene and Tropical Medicine, in partnership with RAND Europe, was commissioned by the Department of Health’s Policy Research Programme to conduct an independent evaluation of the Trailblazers. The aim of the project was to assess whether SIBs help achieve better outcomes, and understand the enablers and challenges of using this funding mechanism.


To understand the state of implementation in each site, the team reviewed existing research on SIBs; analysed data, contracts and documentation from each Trailblazer project; and conducted interviews with a range of local stakeholders, including commissioners, investors, staff from SIB specialist organisations and providers. For Trailblazer projects that commissioned a SIB, the team also conducted interviews with stakeholders in comparable non-SIB funded services.


The five Trailblazers that proceeded to a SIB funded a wide range of interventions for different clients, namely older people who are socially isolated, people with multiple health conditions, entrenched rough sleepers, adolescents in care and people with disabilities requiring long-term supported living.

The five Trailblazers were set up using one of three identified SIB models. Each SIB model allocated financial risks differently to the stakeholders involved.

In general, the planning of the SIB services and subsequent oversight were better resourced and the services more flexibly provided than similar non-SIB services.

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. Only one of the Trailblazers reported having made any cashable savings due to the SIB-financed intervention.

The two SIB specialist organisations involved in the Trailblazers adopted different roles and different management styles, with one emphasising cooperation between commissioner, providers and investors; and the other emphasising contractual obligations 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 therefore not possible to determine whether SIBs are likely to be superior to other more conventional approaches to commissioning in the service areas chosen by the Trailblazers.

Policy Implications

  • SIBs are unlikely to be applied to a wide range of commissioning situations in health and social care.
  • SIB specialist organisations add value, but their different approaches prioritise different SIB goals.
  • Attribution of outcomes to the SIB-financed intervention should be prioritised in future projects.
  • SIBs need to demonstrate cost-effectiveness.
  • The choice of SIB model is important since it shapes the allocation of financial risk.