News and Comment

A radical proposition for changing the way we design SIBs – A service provider perspective

Thursday 20 July 2017


We have both written, previously, with energy and enthusiasm for SIBs; about the benefits they can bring. We still believe that to be true but we also believe that it is important not to lose sight of the potential challenges and downsides. From a service provider point of view, there is a risk that we can find ourselves in a difficult position once the SIB funding has gone. It can be difficult to sell something you have been able to deliver for free for three or four years under a SIB model. It is not impossible: you can sell to some, but not to all.

We recognize that the issue of having to charge for a previously ‘free’ service is not an issue that confronts all previously SIB-ed services. This is where the issue of ‘who has been paying’ and ‘who has been benefitting’ comes in. With SIBs being deployed across cross-cutting social issues, those who pay for outcomes are not always the only ones benefitting. At the end of a SIB, it can be challenging to persuade those other organizational beneficiaries to pay for some of the outcomes they have been enjoying over the duration of a SIB.

What that means is that the people who have been working tirelessly to get the expected results are left wondering: “What next? Another SIB? Great, if there is one on the horizon, or alternatively, look for another job.” It would be a real shame to lose good staff with all their knowledge and passion. The uncertainty towards the final phases of SIB delivery can affect the quality of delivery at a time when delivery needs to be at its best — the opportunity to ‘sell’ the product subsequently.

So what can we do? We could build in a period of adjustment, into costs, say, to cover six months of adjustment post the SIB delivery period. This would allow for the service provider to adjust to the change in a way that minimizes the impact on delivery during the final phases of the SIB.

It would allow those organizations that have benefitted from some of the outcomes from the SIB-ed service to have a period when the service is longer there. This is, of course, a contentious issue and is meant to be provocative. There is a case for arguing, nonetheless, that those organizations that have been benefitting from programmes but who have never had to pay often end up taking these programmes for granted. They do not necessarily understand the real value of things that they have been enjoying for free. Planning proactively for a period of withdrawal could prompt these other organizational beneficiaries to miss the programme and consider more clearly the case of buying in the service. All the while, the infrastructure and workforce for the intervention remain intact so that the programme can be mobilized at short notice. We all know that, sometimes, to truly appreciate something, you may have to do without it, feel the loss and take action to get it back!

So who could pay for this? Well, social investors. In the spirit of re-investing in services, this would go a long way to demonstrating their commitment to its principles. They could set an amount to support the service provider during this period of transition. This would allow the service provider to maintain good staff, engage with ‘new clients’ directly and agree costs. After all, it’s always cheaper to maintain an existing service that has been proven to work than to scrap it and rebuild it subsequently.

Indeed, true social investment is about sustainability. Under a SIB model, we continue tracking outcomes for those in direct receipt of services for a period of time after the SIB-ed programme delivery has ended. If we can do this for the direct service recipients, why would we not want to do that for delivery partners? There is growing recognition of the importance of capacity building within the voluntary and community service provider worlds to engage in outcomes contract and public service delivery more generally. There is further recognition that a healthy market for service provision should include diverse, small local players, so as to avoid larger players monopolizing the market. Changing the design of SIBs to actively promote the sustainability of such players will be transformative.

We continue to look at ways in which Social Investment can be utilized to support better outcomes for Children and Young People and are in early discussion with investors to see how Social Investment can support the growth of the newly formed Manchester Youth and Play Trust-Young Manchester


Michelle Farrell-Bell, Chief Executive, Young Manchester

Dr Chih Hoong Sin, Director of Innovation and Social Investment, OPM Group