Maintaining Social Integrity

Laurence Demarco’s concern over cherry-picking the easiest clients in Social Impact Bond (SIB) contracts is misplaced. Social Finance spent considerable time designing the first SIB contract to ensure that there were deliberate incentives to encourage the SIB partnership to work with the hardest to reach in society and not the easiest.  By measuring the number of reconviction events rather than the number of those who had re-offended, it means that the One Service (who is responsible for the operational delivery of the Peterborough SIB) must work with all ex-prisoners from Peterborough prison including those who re-offend and are released while still on their books. Indeed the One Service is responsible for the whole cohort of male short sentenced prisoners whether or not they are engaged with the service.

Focusing on the number of reconviction events, or in future SIBs the long-term recovery of drugs addicts who relapse after short term treatments, or the children who go in and out of care, goes to the very heart of what Social Finance is about and what the SIBs were designed to achieve. We need to find financial incentives and rewarding payment mechanisms to fund those organisations seeking real social change. But we have always been clear that SIBS cannot be applied to every social problem.  SIBS must be able to define and quantify their outcomes. Many social issues are not that easily measured.

However, Senscot’s Laurence Demarco raises an important issue. How do we ensure that the social integrity of Social Impact Bonds is maintained? How do we encourage organisations, including private sector ones, to work with those individuals who always fall through the cracks because they are either to difficult to reach or too hard to handle? Social Impact Bonds strongly align social impact with financial returns. We must continue to advocate that this always will be the case.

By Alisa Helbitz, Director of Research and Communications at Social Finance

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