The Pros & Cons of Outcomes Based Contracts During the Covid-19 Pandemic – A Provider Perspective

This is the first blog in a series from our Fellows of Practice 2020 on how outcomes based contracts are adapting in light of Covid-19. In this piece Gail Gibbons, CEO of Sheffield Futures explores the pros and cons of the approach, and how they are adapting their projects for young people. 

You can hear more from Gail at this year's Social Outcomes Conference, join her on Day 3 (3rd September) in the big picture session - 'impact alchemy: turning data into decisions and decisions into outcomes.'

By way of background, Sheffield Futures is a large young people’s charity which delivers on a wide range of contracts and grants at any one time. We are currently delivering on a Social Impact Bond – Project Apollo – which aims to support care leavers into sustained education and employment opportunities. It is funded through the Department of Education’s Social Care Innovation Fund and is one of three similar SIBs across the country. It is our second SIB. Sheffield Futures is also a co-investor in this SIB. Our other investor is Big Issue Invest – through which we have a loan agreement.

An initial challenge for us for Project Apollo delivery when lockdown was introduced, was clarity around payments. In line with Government guidance, our other funders were quick to contact us to confirm that we would continue to be paid at the usual rate during this period, with acknowledgement that delivery may be different or even reduced. It took longer to receive clarity for the SIB – I guess because there were more options to consider, and because there are more partners involved to agree a position. This is now resolved.

However, an advantage of the SIB as an outcomes model is that the broader group of decision-making stakeholders with a wider skillset, gives the conversation and subsequent decision-making a level of depth which standard commissioner-provider contracting arrangements doesn’t bring. This has meant that commissioners, investors, and providers (including the local authority care leaver service) have been able to genuinely collaborate and critically assess the impact of the pandemic on the programme; and how the programme might best adapt and change to address it. 

The focus for us during the pandemic is on the needs of our service users. The care leavers engaged on our Project Apollo programme all have challenging backgrounds, and many continue to lead complex lives. They have struggled to enter the labour market and remain there; typically have low or no academic qualifications; and their confidence and resilience is fragile. The key learning for us during lockdown is that positive relationships are critical. The positive relationships which our mentors have built with the service users has been essential in providing much needed first line practical and emotional support. Positive relationships between commissioners, providers and investors are also critical in ensuring the success of outcomes contracts. 

Despite that, approximately half our care leavers have (hopefully temporarily) dropped out of the programme as it is simply not at the top of their agenda at this moment in time. Of those remaining, an increase in mental health issues and loneliness is apparent; and our ‘big ticket’ outcomes of entry into education; employment; and sustained employment – are not there given that educational and training establishments are currently closed; and employment opportunities – especially in so-called low skilled areas, have dramatically reduced. Changes to the rate card to reflect this is not currently under discussion – though we are hopeful of exploring some flexibility around length of contract.

As we move into a ‘new normal’, the SIB model offers an opportunity to reflect on what outcomes are now important to deliver on and if these are achievable; and whether the SIB’s inherent flexibilities to focus on outcomes and innovation to achieve these outcomes in the context of procurement and contract regulations, are able to be put to the test in practice for this next phase.