The public debate around SIBs ranges from extraordinary expectations to passionate opposition and such a polarised debate can risk poor policy making. As the GO Lab takes an agnostic stance, this report moves beyond ideological debate to provide a constructive response based on robust academic evidence. It explores three perennial issues in public service, namely fragmentation of services, reactive spending and difficulty innovating, and looks at how SIBs may alleviate these through collaboration, prevention and innovation.
The report finds that SIBs may lessen these challenges, but we are not seizing the opportunity to learn from where they work well and where they don’t. This report sets a landscape for a fresh, more open, more useful conversation about SIBs and is an important read for public service managers and policy makers.
SIBs may overcome perennial challenges in the public sector through collaboration, prevention and innovation. Challenges in the public sector include fragmentation of public services, short term focus and difficulty creating change. SIBs may encourage collaboration as Local Authorities and service providers can work together and ‘wrap around’ citizens to meet their needs. They may encourage earlier intervention to prevent a crisis which saves money in the longer term. They may also encourage innovation as risk is transferred to the investor so there is room to try new interventions.
There are four dimensions to a SIB that might unlock collaboration, prevention and innovation. The first is the nature and amount of payment by results - were payments made on outcomes or was it more conventional? The second is the nature of the investment – was it tied to achievement of outcomes or would it be repaid no matter? The third was the social intent of the provider organisation – was the service delivered by a charity, or a company without explicit social values? The final was the performance management approach – how hands on were the stakeholders? A core objective of the GO Lab is to understand how these factors interact in different circumstances to produce different results.
The current evidence base on UK SIBs focuses on whether interventions achieve results, but few studies look at the impact of the SIB commissioning approach itself. We need to publish lessons learnt from pilots (both successes and failures) and have more transparency across the sector. Many SIB eveluations currently look at whether the intervention achieved results, but few looks at whether it was due to the SIB approach itself. Looking at existing evidence, it seems that SIBs might alleviate perennial public service challenges, but we’re not seizing the opportunity to learn from where they work well and where they don’t. We need to be transparent about weaknesses and not see this as a sign of failure, but as an opportunity to get better. The real failure would be not to learn.