Peterborough SIB – a success or a failure?

If you are a Social Impact Bond (SIB) aficionado, you will already know by now that the Peterborough SIB will no longer be a SIB for its third and final cohort. It will most likely be turned into a fee for service model due to the arrival of Transforming Rehabilitation (TR).

For more information on this change, have a look at: http://socialfinanceuk.wordpress.com/2014/04/24/social-finance-statement-peterborough-social-impact-bond/. In that Blog you can also find links to the RAND report on the inner workings of the Peterborough SIB to date, and the latest reoffending data from the project, which shows a decline of 11% vs an increase nationally of 10%.

Should this be a moment of great hand wringing? The death of SIBs? The proof they’re not needed? Certainly a few tweets today might suggest so. I beg to differ.

To understand this a little better, it is worth going back to why we developed the SIB model and set up the Peterborough pilot in the first place.

• Enable innovation: It was felt that government struggled to try out new models or areas of public service delivery for fear of failure and the perception that if they spent money on something that didn’t work they would be accused of wasting it.
• Enable flexibility and focus on outcomes: Organisations were frustrated that they were being procured to provide a series of defined inputs and processes, and then held to account to deliver exactly and only that. This produced two problems: firstly, for those providing a more holistic service they were often more expensive than another organisation that bid simply to provide the limited brief that they were asked for; and secondly programmes provided little room for learning. Success was to deliver what was pre-agreed, regardless of what was discovered during delivery.
• Bring rigour to prevention: Preventative work was commissioned but often only for short periods of time, or unsustainably. Preventative services were perceived as a good idea, but usually weren’t being measured effectively. So they were at risk on the low end of the budget cycle, when money was tight, as they hadn’t built the evidence of their effectiveness.
• Better alignment: Foundations often had quite a negative view of government. They fund things in the belief that if successful government will take them on, only to find that too often that is not the case and they are left with a dependent organisation on their hands. The SIB was designed to give each of government and foundations or social investors clear roles in the structure, allowing them to work together.
• Investment in social change: We felt that creating positive social change at scale needed more than grant money. We thought that creating a structure that enabled investment in positive social change could, if successful, create an engine for further change and improvement to society.

When first considering the SIB model we looked at a range of areas, including reducing reoffending. When analysing reoffending it quickly became apparent that the lack of support for short sentence offenders, the lack of attempt to move people onto a different path, was simply wrong. So we gained a new objective, to demonstrate that we, as a country, should be working with short sentence offenders, rather than simply watching them going round and round the system creating more and more damage to themselves and others.

So how is Peterborough doing against those objectives?

• Enabling innovation: Success, the model was implemented, when without the SIB structure the project would not have been put in place.
• Enable flexibility and focus on outcomes: Success, as can be read in the RAND report, there are numerous citations from stakeholders that the model has enabled indeed required the service to adapt to the needs of service users and improve over time.
• Bring rigour to prevention: Success, what other prevention pilot do we know of that has had detailed figures published while it was ongoing? Admittedly, actual results according to the payment metric aren’t out yet, but this level of rigour simply isn’t normally seen.
• Better alignment: Success, investors in the pilot were keen, and investors in further SIBs have also been keener to fund the programme than they would have been had it been a traditional grant funded project with no connection to government.
• Investment in social change: Still building… We need more SIBs before we can claim that we have created a new investment community, though Bank of America Merrill Lynch distributing Social Finance’s New York State SIB to their wealthy clients is a significant step in this direction.

And finally, most importantly, have we made a difference to short sentence offenders? YES!!! There is a new statutory obligation to work with short sentence offenders across the country. Whatever the merits or otherwise of the wider TR agenda, this is a very significant change on which many have been campaigning for a long time. Obviously it wasn’t just the Peterborough SIB that caused this change, but it clearly played a significant role.

So what is the problem? Clearly a nationally implemented programme is going to have an impact on any small scale pilots in the same area. It is hard to see what else might have happened. The one beef left is that the learning from the Peterborough SIB has not made the TR programme better. For example, it has not made the case for greater investment in rehabilitation, with the savings to come from the prisons budget not the probation budget (see https://tobyecc.wordpress.com/2013/05/10/a-step-in-the-right-direction-but-not-enough/). But Peterborough did not create TR. TR is about wider privatisation and cost reduction, as well as rehabilitation.

Peterborough was not designed to be a test case for a national payment-by-results programme, but to enable innovation, to demonstrate the value of flexibility and focusing on outcomes, to bring greater rigour, and most importantly to shine a light on the woeful situation this country has with short sentence offenders. Against these objectives it has been and remains an iconic success, and a cause for celebration.