How Social Investment makes a SIB a SIB (and why Commissioners should care)

Social investment is the main ingredient that makes a SIB a SIB, and distinguishes it from straightforward PbR or outcomes-based contracting. But if the requirement to raise investment lies with providers – why should commissioners worry about it?

This event is for commissioners who may be asking…

• Why is social investment the defining feature of a SIB?
• What role does a social investor play in a SIB?
• Is the cost of social investment worth it?
• What can go wrong if the investor’s priorities are not considered?
• Should I involve social investors in the process of commissioning a SIB – and if so, how?
• Should I procure a social investor as well as a provider and what are the different ways to do that?

The event is for commissioners who are either developing or considering SIB projects.

We will hear from a range of SIB veterans from the worlds of investment, advisory services, and academia, as well as commissioners who have launched SIBs already. This group of speakers will give a colourful set of perspectives on how social investment, and social investors, can make or break a SIB.

The GO Lab will provide a neutral territory for commissioners to ask questions and better understand the significance of social investors in SIB structures. Attendees will have the chance to meet SIB investors and advisors face to face, understand the approaches taken by different players, and with the GO Lab’s guidance, decide for themselves what the most important considerations are.

09.30 Arrival and registration

10.00 Welcome remarks 

10.15 Defining SIBs: what are they and what do we think their benefits might be? 

This session will be led by Nigel Ball, Deputy Director and Head of Commissioning Support of the GO Lab, and Mark Lovell, Principal at The Social Assistance Partnership. The session will explore the main benefits that social impact bonds can bring and the different ways social investment and social investors contribute to their effective delivery. The session will also explore what can go wrong when the type of finance provided for a SIB is not adequately considered. 

11.00 Investor case study 1: Bridges Fund Management

Andrew Levitt, who leads the Bridges Fund Management SIB fund, will explain the Fund created by Big Society Capital in 2012, discussing who the investors are, why they chose to invest into this Fund instead of the higher return/lower risk funds offered elsewhere by Bridges, and the targets they are tracking to measure success. The session will give a few examples of SIBs that Bridges Fund Management has helped to launch, to illustrate:At what stage of development was the social investor involved and what form did this involvement take?Did the social investor principally deal with an advisor / intermediary, a provider, the commissioner, or some combination of these?To what extent did the social investment deal that was agreed affect the financial risk of the commissioner (positively or negatively)?What is the projected cost of the social investment and what are its anticipated benefits?   

11.30 Coffee break

11.45 Investor case study 2: Big Issue Invest

Katy Pillai runs the recently-launched Big Issue Invest SIB Fund. Big Issue Invest has invested in several SIBs prior to the launch of this Fund and Katy will give a picture of the different investments to date, their costs and benefits, seeking to answer the same four questions as in Investor Case Study 1. Katy will also explain the approach the Fund is taking going forward. 

12.15 The cost and risks of social investment

Like any form of financing, social investment comes with a cost. This cost needs to absorbed in the contract costs somewhere. So the question commissioners should be asking is – how much is social investment likely to cost, and how do I know that it’s worth it? How does the cost compare to other forms of financing? What are the risks and how can these be mitigated? Drawing on concrete examples, this session, led by Neil Stanworth from ATQ Consultants, will seek to deepen participants’ understanding of why social investment is used to finance SIBs, and what it costs.    

12.45 Lunch

13.45 Step Down Programme Evaluation

 This session will be lead by Judy Sebba, Director of the Rees Centre at the University of Oxford   

14.15 How to procure a social investor (and how not to) 

There are multiple different ways that social investors can be involved in developing and launching a SIB. Sometimes, investors may be involved very early in the process, helping to define the target group and design the outcomes framework. In other examples, the investors get involved much later. This session will explore the different ways that commissioners might work with social investors. The session will explore how procurement tools that allow collaboration and dialogue can be useful in SIB procurement, to ensure that commissioners’, providers’ and investors’ motivations and incentives are aligned. It will also cover some potential pitfalls to avoid during procurement (e.g. using a fee-for-service contract template rather than and outcomes contract template, not conducting adequate soft-market testing or not leaving room for flexibility).

15.00 Mini advice sessions with SIB investors, advisors and the GO Lab. 

This session will provide an opportunity for participants to meet different investors and understand the approaches they might take to different types of SIB investment.

16.00 Close