Evaluating the World's First Social Impact Bond

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Project Overview

RAND Europe was commissioned by the UK Ministry of Justice to evaluate the world's first Social Impact Bond (SIB), an innovative payment-by-results mechanism to fund public services. Implemented in a prison in Peterborough in eastern England, this first SIB aims to reduce reoffending by prisoners who have served short custodial sentences.

the Peterborough Social Impact Bond to reduce reoffending

  1. If reoffending is reduced, savings may be created for the Ministry of Justice.
  2. Savings from successful interventions are paid back to private investors.
  3. Private investors fund interventions of prisoners and offenders released into community.
  4. Offenders released into community from prison.
  5. Some reoffend and return to prison.
  6. Some commit no further offences.
  7. Impact of interventions on reoffending is measured.
  8. Savings may again be created for the Ministry of Justice.

Background

Between 2010 and 2015, an intervention called the One Service operated at Peterborough Prison. This service provided ‘through-the-gate’ and post-release support to adult male offenders released from HMP Peterborough who had served prison sentences of less than 12 months, with an aim of reducing reoffending. The through-the-gate support provided by the One Service involved contacting offenders before release in order to introduce case workers, assess needs, and plan resettlement activities. The One Service then implemented these plans by working with offenders for up to 12 months following their release. If an offender returned to prison within this period, the One Service aimed to ensure that support services continued back in prison.

The One Service was funded through a financing mechanism known as a Social Impact Bond (SIB), a form of payment by results. This is where private, non-government investors pay for an intervention, and if certain results are achieved, are paid back their initial investment plus an additional return on that investment. In the Peterborough SIB, the Ministry of Justice, supported by the Big Lottery Fund, entered into an agreement to pay a return to investors if targets for reducing reconvictions were achieved. This pilot was the first SIB to be established worldwide.

Goals

RAND Europe was commissioned to evaluate the development, implementation and operation of the SIB at HMP Peterborough, to:

  • identify lessons from the development and implementation of the SIB to inform other PBR pilots
  • investigate how, if at all, the pilot leads to reduced reoffending assess whether, and if so how, this funding model leads to innovation and greater efficiency, and
  • examine wider costs and benefits of the SIB

The third and final report from RAND's evaluation provides evidence and key lessons on the operation of this funding model, informing the possible development and roll-out of SIBs in other policy areas and in other parts of the UK.

Key Lessons

Drawing on all stages of the evaluation, the final process evaluation report identifies the following messages and learning points for future similar initiatives:

  • All phases of the research indicated that a dedicated service director, focused on coordinating and facilitating partnership working, was central to the implementation and operation of the pilot.
  • Stakeholders reported a number of innovations in the pilot, including the flexibility of funding and the resultant adaptations of the service in response to local conditions and service user needs.
  • While aspects of the One Service were in many ways innovative, most innovations identified were not necessarily a result of SIB funding, as other (non-SIB funded) initiatives have exhibited similar characteristics.
  • In the pilot, service users accessed individualised support that was mainly practical in nature. This responded to the predominant needs identified among service users, relating to housing, finance, and employment.
  • The One Service made extensive efforts to engage service users, however longer-term engagement was challenging to achieve since most service users disengaged from the One Service well before the expiry of their 12 months of available support.

Publications