Wednesday, July 12, 2017

Social Impact Bonds are not a magic bullet, but they can be useful

On 6 July 2017, we delivered a webinar on the Life Chances Fund (LCF) and Social Impact Bonds (SIBs) timed to raise awareness of the latest LCF call-out. As an independent public interest organisation, we are not in the market to “sell SIBs”. Instead, our mission is squarely on working with public services to enhance social impact.

The presentation begins at 5:10
Dr Pete Welsh presents at 8:23
Dr Chih-Hoong Sin presents at 24:55

 

 

Despite SIBs having been around since 2010, there is still a relatively low level of awareness. I have written elsewhere about how myths and misunderstandings abound in the context of a lack of transparency and limited, albeit improving, learning and sharing. I have also argued elsewhere that an innovation, such as SIBs, may be abandoned because of dissatisfaction with early versions of it, which may not have fulfilled the creative potential that may be on offer.

We maintain that SIBs are not a magic bullet. Nonetheless, we believe they have value particularly when considered as part of a wider suite of responses to financing and delivering public services.

Those interested in the LCF should not start with the position of: “I want to do a SIB”. If all we have is a hammer, then everything looks like a nail that needs pounding. We should start with clarity over the problem we are trying to solve. Work is then needed to explore whether the potential solution is amenable to outcomes contracting. Where the issue at hand lends itself to being tackled through an outcomes-based commissioning approach, we then need to consider whether social investment adds value or whether there are other more appropriate ways of financing and delivering an outcomes contract.

While not exhaustive, we present three reasons for why and when SIBs may make sense for commissioners.

  1. The space to innovate – When budgets are tight, there can be aversion to taking risk. New, untested, interventions may be overlooked as the risk of failure is high. Commissioners do not want to be seen as ‘gambling’ on things that prove not to work. Under a SIB model, the financial risk of failure is transferred onto social investors. Commissioners only pay for outcomes, and not for failure. In this way, SIBs can be seen as one way of protecting the space to innovate.
  2. Driving efficiency – With established services, there may be less inclination to adopt a SIB approach. There is, however, emerging evidence from evaluations that SIBs can drive higher levels of outcomes even for proven interventions. Of course, it is still too early to conclude that SIBs always drive higher performance, and more evaluations are needed. Nonetheless, if this early finding is true, then SIBs can be said to drive greater efficiency in existing interventions. Process evaluations report consistently that the SIB model, by aligning incentives, encourages commissioners, providers and social investors to work together and ‘pull in the same direction’. Where they work best, SIBs have been shown to have helped join up the ‘different worlds’ by breaking down institutional and cultural barriers to effective partnership working.
  3. Availability of top-up funds – At this point in time, the £80million LCF represents a time-limited window of opportunity for commissioners to tap into additional funds to help pay for outcomes. With top-up contributions from the LCF typically around 20 per cent of the overall financial value of outcomes, commissioners stand to ‘keep more of what they save’. This top-up contribution is obviously meant as a ‘sweetener’ for more commissioners to engage with SIBs. However, just to portray it as such is to oversimplify things. SIB funds like the LCF, its predecessor the Commissioning Better Outcomes Fund, and others, perform a more important function of helping to break down commissioning silos. There is clear recognition that many of the social issues that SIBs have been deployed to help solve are entrenched and cross-cutting. For example, tackling alcohol dependency not only has implications for the use of health and social care services, but also for housing, criminal justice agencies, etc. Working out ‘who pays and who saves’ can be hugely challenging, and can stand in the way of effective co-commissioning. Many have argued, nonetheless, that top-up funds like the LCF are not sustainable over the longer term. In the meantime, they do provide the opportunity for at least testing out different models of co-commissioning. It is of interest to note that there are already efforts underway to develop SIBs that do not rely on top-up funds. It will be important for learning from these efforts to be shared more widely.

In conclusion, I reiterate the importance of being clear about the rationale for developing a SIB. For commissioners, this is especially pertinent as there are a range of alternatives for raising capital, some more cheaply than others. There needs to be a clear case for using public monies under a SIB model, with effective communication around how SIBs can add value.

Dr Chih Hoong Sin, Director, Innovation and Social Investment

 

Additional video and interactive content is available via the Webinar Webex site here.  Note – it is best to access using Chrome or Firefox.

 

Thursday, May 25, 2017

Why, in whole systems, is it so hard to move from papers to action?

This is a shorter version – full version of the above is available here:  full version.

One of the strangest experiences in whole systems change in the public sector is observing how much energy is spent writing papers that are not acted upon, attending meetings that don’t make decisions, and holding workshops that lead to elaborate diagrams but no agreement to proceed.

Ron Heifetz [1]coined the phrase ‘work avoidance’ to describe the way leaders are distracted from the difficult conversations that need to take place if we’re to achieve ambitious outcomes in tough times. Work avoidance is quite the opposite of laziness, indeed to avoid the real leadership work we often exhaust ourselves with back-to-back meetings, and slave over hundreds of pages of data and vast action plans.

Work avoidance, says Heifetz, can take a number of different forms:

It can feel discomfiting to talk about deep feelings and intentions when we are used to an impassive managerial style in our meetings. It can seem like ‘not proper work’ to discuss fears and worries. A flurry of meetings gives a reassuring sense of activity, while difficult conversations can get stuck, or go backwards for a while. But real leadership takes time and self-conscious effort – it involves telephone calls, and meetings in coffee shops, reflection and self-examination, looking into our own hearts to find our values and priorities. It can seem destructive to challenge work avoidance activity, since people are clearly working very hard. Finding ways to do so without blaming individuals is an important part of leadership. But, just as an experiment, if you suspect your ‘system’ is locked into work avoidance, try some of the following:

This is an extract from a longer article that can be found on our website. For more information about OPM’s work on system leadership – contact Sue Goss, Principal in whole-system change and integration – sgoss@opm.co.uk, 020 7239 7800

[1] See, for example, Ron Heifetz: Leadership Without Easy Answers, Harvard University Press, 1994

 

Tuesday, May 2, 2017

The impact of learning and sharing on the development of Social Impact Bonds

In this third blog of my 2017 series inspired by my advisory visit to Japan, I reflect on the importance of international learning and sharing for improving Social Impact Bonds (SIBs). While honoured to have been an expert advisor to colleagues in Japan over the past three years, helping the country take its first steps to develop SIBs; I have also benefitted hugely from the opportunity to learn from them and others.

Here I reflect on the impact of international learning and sharing on two specific areas, based on my Japanese experience.

Role of government

In a previous blog, I argued that governments have key roles to play in supporting the growth of SIBs (and social investment more widely). As I shared the UK lessons during the Social Impact Forum at Yokohama City, I also heard from Australian colleagues who put forward a similar view. What was notable was the fact the New South Wales Government in Australia has actually issued a social investment policy committing to two SIB transactions per year. While the UK Government has been hugely supportive of SIBs, the support has been enacted in different ways. We do not have a specific policy committing us to a specific number of SIBs per year. As Australian colleagues noted, this policy really focusses minds and has mobilised everyone to work together. The machinery of government has been aligned to support this, for example by building in evaluation; by developing policy reviews and analyses; by assessing the effectiveness of known interventions in priority policy areas, etc.

Japanese colleagues, reflecting on their (still very recent) experience, observed that while the Japanese government has made certain overtures indicating interest in SIBs, they have been far less proactive and engaged in stimulating growth, compared with Australia and the UK. It has been very challenging to engage with central government, leaving local governments and their non-profit organisation partners to try lobbying for change while attempting to make things happen on a very small scale.

This comparative approach enabled us to work closely with Japanese colleagues to share specific recommendations for engaging with central government, while also drawing in lessons from related developments and how these have successfully captured the imagine of governments, such as Climate Bonds.

The purpose of SIBs

Another area where the comparative approach surfaced important issues for scrutiny is the motivation behind SIBs. While much of the discourse in the UK, US and Australia is underpinned by a strong ‘savings’ narrative, Japan seems to be more minded to develop SIBs that are focussed squarely on improving wellbeing even when this may not lead to any discernible savings for the public purse.

In challenging the dominant discourse around SIBs, Japanese colleagues tapped into a creative seam of thinking around constructing SIBs on a very different foundation. We were able to share specific models of how this may be done, proceeding to advise Japanese colleagues about the implications for outcome metric selection and outcome modelling. At the same time, this re-focussing enabled us to build a stronger narrative and practice around more meaningful user-defined outcomes in the UK, counter-balancing the more dominant system-defined outcomes approach. I have certainly woven this into my work with Northern, Eastern and Western Devon Clinical Commissioning Group on their SIB to tackle alcohol dependency.

Conclusion

One of the downsides of working in the SIB field is that although we all assert that “things change very quickly”, we have yet to demonstrate willingness to share experiences, learning and data. Indeed, I have often encountered strong opposition towards sharing, under the guise of “commercial and/or political sensitivity”.

At the same time, we all call for transaction costs to be reduced as the current high costs make it difficult for SIBs to be sustainable. Surely one of the ways to bring down transaction costs is for better sharing of information and experiences so that others do not have to reinvent the wheel every time a new SIB is being developed. This glaring contradiction does not escape me and many others. It is time that we have the courage and humility to learn and share more widely.

Dr Chih Hoong Sin, Director, Innovation and Social Investment

Monday, March 20, 2017

Commissioning for Outcomes – The role of social finance

Can social finance help with the challenges that public commissioning faces?

This paper is intended as a provocation to government, commissioners, providers and investors to begin a richer conversation that doesn’t assume we already know the answers. OPM’s experts in commissioning for outcomes (Sue Goss) and in social finance (Chih Hoong) draw on their learning about systems leadership, experience of teaching commissioning programmes and our work in evaluating social investment experiments.

Monday, March 20, 2017

Commissioning for Outcomes – The role of social finance

Can social finance help with the challenges that public commissioning faces?

This paper is intended as a provocation to government, commissioners, providers and investors to begin a richer conversation that doesn’t assume we already know the answers. OPM’s experts in commissioning for outcomes (Sue Goss) and in social finance (Chih Hoong) draw on their learning about systems leadership, experience of teaching commissioning programmes and our work in evaluating social investment experiments.

Wednesday, December 7, 2016

Support for outcomes-based commissioning and the role of the GO Lab

Introduction

Outcomes-based commissioning (OBC) has attracted increasing attention as part of Government’s wider reforms to public services, set out in the Cabinet Office’s 2011 white paper. In the first blog of this series, I shared some of the learning and messages we have gleaned from our work with commissioners in this area, specifically in relation to the technical and cultural challenges and the potential for a wider approach towards outcomes that balances service user-defined and system-defined outcomes.

In this second blog, I share some of what commissioners have been telling us in terms of the support they need to enact OBC and also reflect on the implications for the Government Outcomes (GO) Lab. The GO Lab was established through a partnership between the Blavatnik School of Government at the University of Oxford and the Cabinet Office, as an independent centre of academic excellence for innovative public sector commissioning.

Support and resources

We have found that many commissioners are unaware of the range of support and resources available to support OBC. For example, across the successive cohorts of commissioners we have been working with as part of the Cabinet Office’s Commissioning Academy, we have found very low levels of awareness of things such as ‘rate cards’ and the Cost Benefit Tool for Local Partnerships. In the previous blog of this series, I reported that commissioners often articulate the technical challenges of OBC, which can include pricing outcomes, for instance. Yet resources like rate cards and the Cost Benefit Tool for Local partnerships are key resources in helping commissioners determine outcome pricing.

This is a clear sign that simply making something available does not mean that it will be used. Indeed, potential audiences may not even be aware of the existence of such resources, much less use them.

We must understand what commissioners need in relation to resources and support, and how they prefer to access these. Commissioners we work with describe utility of resources and support in terms of their specificity and bespokeness in relation to intended use. For example, there can be a preference for local data over published national statistics, for example, in relation to pricing outcomes. This desire for specificity has implications for replication and the usefulness of generic resources. There has to be some way of ‘translating’ generic resources and unpacking them for use in specific contexts – a process of ‘making it real’.

This is where we need to understand the importance of peer-to-peer learning and sharing within the commissioning world. Amongst the commissioners we work with, it is evident that ‘word of mouth’ is hugely influential. This peer-to-peer transmission of know-how is important as it helps translate how something should be done in a specific context.

GO Lab

Commissioners have told us that it would be desirable to have a central body responsible for evidence synthesis and dissemination to support better commissioning. This suggests that the GO Lab may have an important role to play. However, there is still a very low level of awareness of the existence of the GO Lab and its role among the commissioners we work with. The GO Lab needs to clarify its remit; ways of working; and strategy for engaging different types of commissioners. It has an urgent task of raising awareness among its intended ‘customer base’. To do so will require working collaboratively with other players to extend reach and meaningful engagement.

While there has been a lot of emphasis on the GO Lab’s role in relation to evidence on ‘what works’, there is another complementary perspective about the need for a hub that looks specifically at what types of commissioning models are appropriate in what circumstances (i.e. in essence a ‘what works centre’ for commissioning as opposed to a ‘what works centre’ for interventions).

Conclusion

With the challenges confronting public services and the attendant need for innovative responses, it is vital that we create spaces for commissioners and others to come together to share experiences and insights into effective ways of commissioning. This requires more than just pushing out information. This reframes the processes away from a simplistic knowledge creation and transfer model, to one that is based on knowledge co-creation.

Dr Chih Hoong Sin, Director, Innovation & Social Investment

Thursday, December 1, 2016

Commissioning for outcomes – challenges and opportunities

Introduction

In the UK, around £15bn of outcomes contracts has been commissioned in 5 years. Outcome contracting or outcomes-based commissioning (OBC) is not new, but its use has attracted increasing attention as part of the Government’s wider public services reforms, set out in the Cabinet Office’s 2011 white paper. It is aimed at building more accountability into commissioning and to create a direct financial incentive to drive outcomes while incentivising providers to find better ways of delivering services. However, as the National Audit Office reported, OBC is not the ‘magic bullet’ and is not suited to all public services.

Appetite for OBC

In our experience of working with a wide range of local commissioners and those in commissioning networks; we are aware that OBC is still highly variable. Commissioners are conscious of the challenges of OBC. The process of developing and procuring outcome contracts is technically challenging. Interestingly, while much has been written about the technical challenges associated with defining outcome metrics, identifying target cohorts, establishing causality between intervention and outcomes, setting appropriate outcome payment, and procuring OBC; there has been less attention given to the cultural challenges of developing and procuring outcome contracts.

Our engagement with commissioners indicates that they do not under-estimate the technical challenges of OBC, but largely feel that they can have access to in-house capacity and skills for analysing outcome, activity and financial metrics; or are able to lever in such expertise. However, technical expertise per se is insufficient.

The structure and organisation of the statutory sector can pose challenges. For example, it is hierarchical and, despite good intentions, still operates in silos. Developing OBC often requires ‘going against the grain’ of established practice. Breaking down silos, networking and influencing effectively, and being able to understand and navigate complex relational dynamics within a commissioning organisation can sit uncomfortably within settings that are more commonly characterised by deeply entrenched sets of institutionalised behaviours and bureaucracy.

Commissioners often talk about risk in the context of OBC. They hint at the need for a different attitude towards risk within the statutory sector, and also different ways of ‘holding’ and managing the risks. Risk assessment and risk management have become de rigor in many statutory services and organisations and, in these contexts, risk is conceptualised and understood in negative terms. However, risk management strategies can often reflect public opinion and market forces, rather than stem from any objective analysis of risk. There are also deep contradictions in relation to whether risks are managed at the individual or collective levels. The issue of ‘who holds what risks’ is highly pertinent in this context.

Outcomes for whom?

As I have written previously elsewhere, ‘outcomes’ are still largely system-defined. This is more than an issue of ‘who pays’ and ‘who saves’, but also recognises the fact that ‘the system’ (e.g. healthcare, social care, children’s services, etc) already collects a significant amount of data routinely, using broadly consistent techniques. It is therefore perceived to be more ‘cost-effective’ to use such existing data, particularly when such data are also key targets or KPIs against which organisational performance are assessed.

There is a paucity of evidence around the link between individual-level and system-level outcomes. There can be over-simplistic assumptions around the link between, say, achieving better individual wellbeing and resultant decrease in service use. Despite the rhetoric around person-centred care and user involvement, genuine involvement of service beneficiaries in defining outcomes is still rare.

Interestingly, there may be potential to reframe the way we look at outcomes. For example, while the Sustainability and Transformation Plans (STP) agenda has been criticized by local authorities and by those championing public consultation, the high level principles and vision underpinning it can be used to open up a wider discussion around “outcomes for whom?”. In our own work with commissioners, we have encountered colleagues in Clinical Commissioning Groups who have used the STP agenda to embrace a wider perspective on outcomes – in particular to involve service users in co-defining ‘what success looks like’, over and above any system-level benefits, even if these may not result in ‘cashable’ savings.

Conclusion

Looking ahead, we need to pay more attention to the needs of commissioners in terms of the support they require to enact OBC, with clearer guidance for thinking through where OBC may or may not work. The support should cover not only the technical aspects of developing and procuring OBC, but should also extend to include support for navigating the relational aspects of OBC, both internally and externally. It is also crucial to better understand how commissioners access support. From our experience, effective commissioning support is never simply about ‘pushing’ information and resources ‘out’ to commissioners. There should be a strong formative thrust aimed at helping commissioners translate and unpack resources and learning, and making these work in their specific local contexts. In addition, we know that peer-to-peer support and exchange can be critical in sense-making and practice improvement. This is where commissioning networks can play a vital role in encouraging and sustaining such exchange.

Dr Chih Hoong Sin, Director for Innovation & Social Investment

Monday, September 19, 2016

City-Wide Partnerships – Belfast

Background

The city of Belfast has an important place-shaping role in Northern Ireland and was recently given additional powers by the Northern Ireland government. We were asked to work with the city to create an innovative partnership architecture for the whole city, working more closely with the private sector, with neighbourhoods and with partner agencies.

What did we do

Through facilitated sessions we worked with politicians, managers and partners to overcome its legacy of division and build a strong shared vision and agenda. What was striking was the incredible number of different partnerships that already existed, but also the complex history that led to each one, and the sensitivities involved in making changes. Belfast is a city where history is very important, and while there is widespread support for building a vibrant and growing economic, it is a place where the maxim ‘moving at the speed of trust’ is highly relevant.

Outcome

Working with the city’s diverse group of political leaders, we were able to map the links between deep seated problems and the obstacles to economic growth without blame or finger pointing – and to pinpoint the areas where new thinking was needed. By interviewing a wide range of partner organisations, we were able to understand the strengths and weaknesses of current partnership working; no-one wanted an unwieldy talking shop. Instead, leaders formulated an approach based on a network of partnerships – each focussed on a very practical problem – but with an central space for leaders to make the right linkages and build strong relationships. While progress would be gradual, to make the network effective we developed and ran a bespoke leadership programme, developing a cadre of managers from across the city to become ‘system enablers’ sharing data and evidence and working collaboratively to support the partnership network.

Monday, September 19, 2016

Toolkit for Change – Canterbury District Council

Background

In Canterbury District Council, Rob Francis, Richard Field and Sue Goss worked with the top fifty managers to develop commercial and entrepreneurial skills and inspire new ways of thinking that could lead to more creative service design.

What did we do

Drawing on research about best practice both in the local authority and elsewhere, we designed and ran three Toolkit for Change ‘challenge and creativity’ workshops  – incorporating best practice from other councils, communities and the commercial world, framed clearly within the core values of public service.

Lenses for reviewing public service included channel shift, new forms of ownership and public service delivery, asset mapping and unlocking the capacity within local communities / partners, creative thinking and ways of valuing public impact and investment. In between workshop sessions, managers and staff worked on ideas, challenges and possibilities culminating in preparation and presentation of business cases for change to a panel in the final session.

Outcome

Feedback on the process and benefits can be seen on this short video.

Monday, September 19, 2016

Health and social care integration in Kirklees

Background

We have worked to develop collaborative leadership across health and social care systems in a number of localities. In Kirklees we were asked to support the creation of a integrated mental health commissioning system as an exemplar from which the whole system could learn.

What did we do

A very senior group of leaders worked together over a number of sessions to develop a shared set of principles and goal – and a series of practitioner workshops began to flesh out what this would mean for front line services. Recognising that success would depend on the strength of relationships between staff in different organisations, we designed and delivered a ‘Skills for Systems Leadership Programme’ for the public health, social care and CCG senior teams – agreeing key health outcomes and providing the skills and techniques that enabled cross-organisational teams to develop shared approaches to changing behaviour and tackling long-standing problems.

Outcome

The programme built a strong network of organisations and individual leaders, a shared understanding of systems pressures and agreement about the way forward. The work included providing individual coaching and support to key leaders, facilitation and team coaching sessions for top managers and partnerships. The final stage of the programme was to create a dramatic ‘future scenario’ event for fifty or so participants including the voluntary and community sector, from which partner organisations developed a set of principles to guide future shared direction.