Five key actions will boost charity and social enterprise Payment-by-Results scheme
Payment-by-Results (PbR) schemes can be boosted by five key actions, leading social investors Big Society Capital and Bridges Ventures (Bridges) have told Minister for Government Policy, Oliver Letwin.
The adoption of PbR has grown significantly during 2012 – with ‘over ten’ separate schemes involving social enterprises and charities as delivery partners and social investors providing the financial backing. Last week also saw the launch of the Government’s £20 million Social Outcomes Fund and two new social impact bond schemes in Essex and London. In addition Justice Secretary Chris Grayling MP outlined comprehensive plans to base large tracts of the probation system on PbR. Big Society Capital and Bridges Ventures have drawn together their experience of the the rapidly growing market for PbR programmes and have shared these results with the Minister in a letter and a more detailed report.
Nick O’Donohoe, Big Society Capital said: “With more and more PbR schemes on the horizon, it is imperative they are structured and delivered in a way that gives them the best changes of improving social outcomes. As the PbR market moves to the new level, Bridges Venture and Big Society Capital are keen to ensure social enterprises and charities can play their part in creating a healthy and sustainable market. For this to happen, we call for five key actions to better link PbR commissioning with social investors.”
-Involve social investors early in the design and specification of PBR programmes
– Be willing to pay a positive return if meaningful social impact is achieved – meaningful social impact that translates into a negative financial return is not going to be investible
– Help investors understand the risk they’re taking on by releasing as much data as quickly as possible on: the target cohort; the current level of outcomes attainment; and, the impact or otherwise of existing interventions.
– Create reserve lists or filter the number of shortlisted bidders – so as not to create unrealistic amounts of investor due diligence.
– Adjust some of contractual terms to reflect the nature of PBR – some early PbR contracts have contained standard outsourcing terms which lose their meaning in a PBR context.
Hannah Randall – Capital MSL
0207 255 5177
Big Society Capital
Andrew Robinson – Newgate Communications
0207 680 6562
Notes to Editors
About Bridges Ventures Bridges Ventures LLP (“Bridges Ventures”) is specialist fund manager dedicated to using an impact-driven investment approach to create superior returns for both investors and society at-large. It was established in 2002 with a mission to use its commercial expertise to achieve focused social or environmental benefit, as well as attractive returns for investors. Bridges Ventures has raised six funds to date which total almost £275m: Sustainable Growth Funds I, II and III, the Bridges Sustainable Property Fund, CarePlaces Fund and the Bridges Social Entrepreneurs Fund.
About Big Society Capital Big Society Capital is the world’s first social investment bank. BSC formally launched in April 2012, with an estimated £600 million of equity to be paid-in over 5 years, of which £400 million will be from unclaimed assets left dormant in bank accounts for over 15 years and £200 million from the UK’s largest high street banks. Big Society Capital seeks to support the growth of a social investment market in the UK by revolutionising the way in which the social sector is funded. Through supporting the growth of social investment finance providers, BSC will improve access to innovative forms of financing, and connect the sector to capital markets
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