Social Finance is excited to launch a new guide to Payment by Results in the youth sector this week. The guide, produced for Catalyst – a consortium of youth charities led by the National Council for Voluntary Youth Services – builds on our experience of developing Social Impact Bonds in the youth sector to build confidence and understanding in both youth service providers and potential contract commissioners.
Outcomes-based contracts represent both an opportunity and a new way of working. While contracts can offer great value for money for commissioners, who only pay for successfully delivered outcomes, service providers will need to think carefully about how they fund their upfront costs of service delivery. Our guide includes a check list for service providers assessing payment by results opportunities and guidance on how to prepare for outcomes-based contracts that we hope will be useful tools for the youth sector.
While it is hard to establish how quickly opportunities in the youth sector will emerge, we see real potential for outcomes-based contracts in this space – particularly in relation to improving outcomes for children in and around the care system, at risk of youth offending, or on track to achieve poor educational and employment outcomes.
The launch of this guide coincides with Iain Duncan Smith’s announcement today of another four social impact bond contracts from their Innovation Fund. Innovation Fund contracts are focused on improving educational and employment outcomes for excluded young people across the UK, with social investment funding service providers’ upfront delivery costs.
Social Finance is excited to have been awarded two of these contracts to support improved educational and employment outcomes for young people in the Thames Valley and the North West of England.
We look forward to working with service providers, investors and commissioners to support the development of further outcomes-based contracts to improve the life chances of young people over the coming months.