Bridges-backed Career Connect delivers key SIB milestone
- Since 2012, Career Connect’s SIB-funded programme has delivered thousands of improved outcomes for vulnerable young people, potentially saving the Government millions of pounds in future welfare payments
- Bridges, which invested in the SIB, has made a short film celebrating Career Connect’s story
- Career Connect and Teens & Toddlers (another Bridges-backed SIB) have both now repaid investors in full and been recommissioned for a second programme
- Their success shows that the social impact bond model can deliver better results
A social impact bond-funded programme run by Career Connect, a charity that helps disadvantaged young people in Merseyside achieve better education and employment outcomes, has become one of the first in the world to over-deliver against its social objectives and repay all the loan capital (plus interest) to its social investors. It has now been recommissioned to deliver a second programme.
These are significant milestones for the nascent market in social impact bonds (SIBs), a concept that has been attracting growing interest from policymakers and investors around the world. Both Career Connect and Teens & Toddlers – a Manchester-based charity that has also delivered a successful SIB-funded programme – serve as timely illustrations of SIBs’ potential to produce better outcomes at lower cost to the taxpayer, while also helping to inform future policy.
Career Connect was originally commissioned to deliver the three-year ‘New Horizons’ programme in 2012 by the Department of Work & Pensions (DWP), as part of the latter’s Innovation Fund. The aim was to work with young people on Merseyside – with a particular focus on ex-offenders, those in or leaving care and those with learning difficulties – to help them improve their attendance and behaviour at school, achieve educational qualifications, and move on to further education or employment.
Funding was provided via one of the world’s first social impact bonds – in which Bridges Ventures (‘Bridges’) and Big Society Capital were the lead investors – with the Department for Work and Pensions (DWP) agreeing to pay for a pre-determined range of positive outcomes. Triodos Bank was responsible for structuring and performance-managing the SIB.
The programme initially provided a wide range of support to young people of different ages, but it quickly became clear that early intervention at 14-16 was the most effective approach. Career Connect focused on working with young people to re-engage them with education, delivering better-than-expected improvements in school attendance, behaviour and attainment. Helping these young people to leave school with better qualifications substantially increases their life prospects – and should result in savings to the taxpayer over time through reduced welfare payments.
As a result, the Career Connect SIB has been able to repay all of the risk capital to its social investors, plus interest – and was recently re-commissioned by the DWP to deliver a second three-year programme (as part of its Youth Engagement Fund).
Bridges has made a short film celebrating Career Connect’s success. In it, operations director David Howard explains how the SIB’s long-term, outcomes-based structure allowed Career Connect to pioneer new approaches – and how the increased focus on data and impact measurement (a key part of the SIB process) helped it to identify the most effective interventions and shape the programme accordingly. It also features the story of Ricky, a successful graduate of its innovative ‘Mental Toughness’ course. The film can be viewed below.
Andrew Levitt, Investment Director at Bridges (and Career Connect SIB board member), said: “The Career Connect story provides demonstrable proof that the excitement around social impact bonds isn’t just a case of hype over substance. The structure of the funding allowed Career Connect to experiment with new approaches, while the clear feedback loops inherent to the SIB model helped them to identify the most effective and focus their programme to reflect that. With a standard contract, none of this could have happened. And the results are clear: demonstrably better outcomes for the young people concerned, and clear long-term savings for the DWP. Not all the early outcomes contracts will be this successful – but it does show what can be achieved, particularly as we learn more and more about what works and what doesn’t.”
Kieran Gordon, chief executive of Career Connect said: “We have really valued the opportunity to work with social investors in delivering support to the most vulnerable young people across the Liverpool City Region. We have seen real impact in terms of better attendance in schools and improved behaviour amongst those who have been on the New Horizons programme – and consequently their exam results have shown dramatic improvement. We also take great pride in the fact that so many young people are today in a job with training having been through the programme.”
Katrina Cross, performance manager for Triodos, said: “Career Connect’s work with young people on Merseyside, focusing on Mental Toughness and confidence, has delivered real improvements in their engagement with education, and educational attainment. Over time during the programme, the Career Connect team worked closely with Triodos and the SIB Board to implement a rigorous standard of project management and granular performance information, which resulted in continual improvements in the performance of the programme.”
Career Connect is not the only provider to have demonstrated the viability of the SIB model.
Teens & Toddlers, a charity that pairs at-risk teenagers with nursery children in an effort to foster greater responsibility and empathy, was also commissioned by the DWP’s Innovation Fund in 2012 to deliver a three-year intervention programme in Greater Manchester. Again, the contract was structured as a social impact bond, with up-front funding provided by a group of social investors (including Bridges) and the DWP agreeing to pay for certain outcomes. Social Finance was responsible for structuring and performance management.
Teens & Toddlers has also now fully repaid the capital invested – and like Career Connect, it has recently been recommissioned by the DWP to provide a second SIB-funded programme.
Notes to editors
About Bridges Ventures
Bridges Ventures LLP (“Bridges”) is a specialist fund manager focused exclusively on sustainable and impact investment. It invests in high-impact SMEs, properties and social organisations that can generate superior returns for both investors and society as a whole, focusing on four key impact ‘themes’: health & wellbeing, education, sustainable living and under-served markets. It manages almost £600 million across its Sustainable Growth, Property and Social Sector funds.
The Bridges Social Impact Bond fund – the first of its type in the world – was launched in April 2013 with Big Society Capital as cornerstone investor, alongside Omidyar Network and Panahpur. It held a final close on £25m in September 2014. The fund provides investment and support to charities and social enterprises delivering intervention programmes that substantially improve social outcomes.
The Social Impact Bond Fund also has a co-investment agreement with Bridges’ other Social Sector fund, the Bridges Social Entrepreneurs Fund. Seeded by the Bridges Charitable Trust, this fund was launched in August 2009 and has raised nearly £12m for investment in scalable social enterprises and charities with sustainable business models delivering high social impacts.
About Career Connect (www.careerconnect.org.uk)
Career Connect is a charity that is passionate about providing high-quality independent careers advice, bridging the gap to learning and employment and better life chances for young people and adults. Established in 2001 as Greater Merseyside Connexions Partnership, it brought together some of the highest qualified and experienced Careers Advisers from across the area. Working together as a team of experts on education and careers, it extended its services beyond the Merseyside region into areas across the North-West and further afield. The company was renamed Career Connect in 2014 and has become a leading provider of careers information advice and guidance to young people and adults.
About Teens and Toddlers (www.teensandtoddlers.org.uk)
Teens and Toddlers was founded in 2001 to address the social exclusion of young people. The charity inspires disengaged young people from disadvantaged areas to succeed at school, in work and in the community. It does this by giving them the life skills and self-belief they need to understand who they are, who they can become and what they can achieve. To date, Teens and Toddlers has reached over 10,000 disadvantaged young people and children in England.
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