Social Impact Bonds& Local Integrated Service Trust (LIST)

Tom Flanagan

Corporate Director EPE

26 September 2011

www.cornwall.gov.uk

Growing a Social Investment Market

“Britain needs new ways of tackling some very stubborn and

expensive problems such as fractured communities, homelessness

and high rates of re-offending. Social entrepreneurs and the social

ventures they lead bring innovative solutions by combining social

mission with sustainable business models.”

Cabinet Office – February 2011

www.cornwall.gov.uk

Annual Operational Budgetsvs Long-term Multi-Agency Investment in Prevention

A Potential Value For Money Solution!

In Cornwall we have the opportunity to:

• Build on an innovative social enterprise culture

• Explore the opportunity of Social Impact Bonds

• Create a Local Integrated Service Trust (LIST)

• A LIST that will facilitate Social impact Bond Funding

www.cornwall.gov.uk

www.cornwall.gov.uk

The Local Integrated Service Trust

www.cornwall.gov.uk

www.cornwall.gov.uk

Social Impact Bond – Key Criteria

• Raise minimum of c£5m investment

• Based on agreed Intervention/Diversion Strategy

• Agree timescale for success criteria

• Have confidence in chosen metric(s) over 5 years

• Require a public sector contracting party

• Agreement with established social enterprise

• Could apply to arms-length wholly-owned companies

www.cornwall.gov.uk

Cautious Optimism

• New idea, new language, new thinking

• This sounds great – can we make it happen?

• Concerns around the following:

What is the financial case?

Motive of investors?

Low risk – yes, if we get the business case correct!

Will it be able to support our challenges/priorities?

www.cornwall.gov.uk

Peninsular Discussions - Progress to Date

• Potential Areas of Benefit -• Children’s Services

In Families In Care

• Offender Management In Prison In the Community

• Health Infrastructure & Non-Clinical Clinical

• Worklessness NEETS Adults

• Waste/Landfill/Recover-Reuse-Recycle

www.cornwall.gov.uk

Peninsular Discussions - Progress to Date

• Proposed Work Streams -

• Children’s Services (Torbay)• Recession – Impact on Young People (Plymouth)• Offender Management (Torbay)• Health - Telecare & Non-Clinical (Cornwall)• Health - Clinical (Devon)• Worklessness (Cornwall)• Waste/Landfill/Recovery (Cornwall)

www.cornwall.gov.uk

Next Steps

• Engage with our partners & stakeholders

• Identifying appropriate social issues for SIB/LIST• Creating Intervention & Diversion Strategies based on current work streams

• Intervention/Diversion Strategies – lead to Business Case

• Research preferred options with funders/intermediaries

• Develop Cornwall (Peninsular) Funding Model

www.cornwall.gov.uk

New MoneyBet

ter

Soci

al O

utco

mes

What is everyone’s motivation

New way of working

New Thin

king

The languages

of

high finance

&public

sector meet up

Can we afford it

Additional Money Supporting our priorities?

Virtuouscircle

Is it too good to

be true?

Low Risk

Caution &

Optimism

Questions & Discussion