This is our monthly policy briefing for October 2020. Each week we gather all the news, commentary and events from across the sector, then tie it all together each month. If you would like to get this in your inbox each week you can sign up to Tiny Letter.
News GO Lab researcher awarded UKRI Future Leaders Fellowship Congratulations to our acting research director, Dr Eleanor Carter, who has been awarded a UKRI Future Leaders Fellowship to investigate how government can better manage public service outsourcing. Eleanor’s project, The governance of multi-sector public service delivery networks, will investigate whether current government practice of contracting individual public service providers is fit for purpose in a world where people interact with a vast range of services. GO Lab
Opinion Is risk-transfer largely illusory? This blog summarises the discussion from the Contracting for risk transfer and innovation deep dive session on Day 3 of the Social Outcomes Conference 2020. The blog explores a range of topics. It begins by outlining the differences between Social Impact Bonds in different countries, before considering whether SIBs are a tool for innovation. It then explores the impact of the Covid-19 crisis on outcomes contracts. It highlights the tendency of SIBs to ultimately fall back on government support calling into question their ability to meaningfully transfer risk, and notes that SIBs to have more flexibility than traditional public services to adapt or stop their services in the face of crisis. Finally, the blog concludes by examining what the future of outcomes contracts will look like, including more flexible outcomes frameworks, and the potential for contract specifications to either become tighter or more relational. GO Lab
Opinion Reflections on the role of impact investment in post-Covid19 recovery In the latest of a series of blogs from our 2020 Fellows of Practice reflecting on how outcomes-based contracts are adapting in light of Covid-19, Aman Johal (Investment Director at Big Society Capital) discusses the lessons we can draw from investor responses to the pandemic. She highlights the commitment of investors to social outcomes, as well as the flexibility and relative stability of outcomes-based contracts. GO Lab
Opinion Exploring Social Investment: an interview with Mark Lovell Big Issue Invest and the GO Lab are collaborating on a Social Investment/Fund Manager Extension Prototype, to attempt to visualise the role of the investor in impact bonds. We talked with Mark Lovell, Investment Director for the Outcomes Investment Fund and former GO Lab Fellow of Practice, about the lessons that have emerged so far from his social investor perspective. GO Lab
Report Do the benefits outweigh the costs of impact bonds? The fifth and final brief in Measuring the success of impact bonds asks whether impact bonds are an efficient and cost-effective way to contract for social services. It explores theoretical assumptions, costs, and benefits, before identifying four ways to lower the cost of IBs: 1. Build knowledge and generate champions 2. Pool investment capital 3. Create outcomes funds and 4. Streamline technical assistance needs. The brief concludes that there is insufficient evidence to answer the overarching cost-benefit question, and makes the case for further research. Brookings
Opinion Accelerating impact: COVID-19 and the future of outcomes-based financing At a recent discussion hosted by Devex and the UBS Optimus Foundation, panellists reflected on the impact of Covid-19 on outcomes-based financing. They noted the importance of contract flexibility in times of crisis, and argued that innovative funding tools will be needed to achieve impact on the ground, both through the pandemic and beyond. Devex
Opinion Social impact bonds boost literacy and numeracy but can they scale? This special report highlights the continuing debate around impact bonds: are they an effective way to leverage private capital to solve complex social issues? Or do the costs outweigh the benefits? Financial Times
News Impact project/investment of the year - Education: Argentina's first social impact bond Argentina's first SIB won Impact project/investment of the year in the Education category of Environmental Finance's IMPACT Awards 2020. Proyectá tu futuro supports vulnerable young people in the city of Buenos Aires to access skills and employment training so that they can secure and maintain jobs. Environmental Finance
News Australia's first social impact bond delivers for families and investors Australia's first SIB, the Newpin Social Benefit Bond, has reached maturity. The impact bond helped nearly 400 children in out-of-home care return to their families, and delivered 10% p.a. returns to investors. Although the SIB has concluded, the Newpin programme will continue under an outcomes-based contract with the New South Wales government. Pro Bono Australia
News More than a 1,000 immigrants employed through Integration SIB project Finland's Integration SIB, which aimed to help immigrants find employment and integrate into Finnish society more quickly, has displayed "encouraging" early results. Between 2016 and 2019, 2,217 individuals participated in the project, which brought together employers and potential employees and provided customised training. By the end of September 2020, 1,034 of those who had participated were employed. A formal evaluation of the SIB is planned for 2021-2022. Ministry of Economic Affairs and Employment of Finland
Conference highlights GSG Global Impact Summit 2020 Earlier this month, the Global Steering Group for Impact Investment (GSG) held their annual Summit virtually. This year, participants reflected on how the impact investment community can collaborate for a just and impact-led response to, and recovery from, the Covid-19 crisis. Recordings of all the sessions are available for free on YouTube at the link above. GSG
Opinion Layering Evidence for Impact Investing Success This article argues that impact investing needs to adopt a more developed approach to evaluation of social impact. It begins by exploring why there has been a mismatch between traditional evaluation methodologies and impact investing, before highlighting two emerging best practices identified by the authors: Vertical Layering, to build evidence for a singular solution, and Horizontal Layering, to build evidence across a system. SSIR
Report Building a resilient state: A collection of essays In this report, a range of leading thinkers consider how lessons from the Covid-19 pandemic can help the UK to better deal with future crises, including the importance of devolving power to respond to local needs and involving communities in addressing social challenges. Reform
Report Learning to listen again Often, those most in need of help during a crisis are labelled as 'hard to reach', and as a result may have their voices left out of policy debates and decisions. This report outlines early findings from an experimental approach to listening to those from underrepresented groups during the Covid-19 pandemic. It highlights the importance of building trusted relationships, ensuring people feel their voice really has an impact, and offering a range of engagement options, so participants are given agency to choose how they wish to be heard. Centre for Public Impact/Changing Lives
Report Social value in government procurement This report summarises responses to a UK Government consultation on how social value should be taken into account when awarding central government contracts, and details next steps for the government's proposed model of evaluating and reporting social value. UK Government
Report Levelling up: where and how? As part of its Green Budget 2020, the IFS has produced a report on the UK Government's efforts to address place-based inequalities. The report highlights the importance of local government and linking into existing spending programmes, as well as the complicated relationship between long-term geographic inequalities and the short-term economic challenges of Covid-19. Institute for Fiscal Studies