The final report from Peterborough, news from Utah and elsewhere and a dose praise from The Economist which remains the best way to stay pleasantly misinformed about world affairs in one weekly publication. It’s the last edition of 2015 from us. As you know, I haven’t missed a day this year and so I think it’s not a bad idea for a few days away from the newsletter over the Festive season.
On behalf of myself and Florin, I wish you all a very Happy Christmas and a Peaceful & Prosperous New Year – catch you back here January 4th. Thanks for reading SIB!
Social Impact Bond Pilot At HMP Peterborough: Final Report
UK Ministry of Justice
Findings from the final phase of the process evaluation of the payment by results Social Impact Bond pilot at HMP Peterborough.
Salt Lake County Council Keeps Jail Tax Alive In Budget OK
Mike Gorrell – Salt Lake Tribune
The need to invest big now in the criminal-justice system or face even bigger costs down the line prompted the Salt Lake County Council on Tuesday to adopt a 2016 budget that extends a 20-year-old tax levy set to expire Dec. 31.
County taxpayers would have seen an $18 charge removed from their property tax bill with the end of a 1995 bond for jail construction.
But Mayor Ben McAdams and six of the nine council members felt it was justifiable for the county to extend the collection of that tax because the $9.4 million it brings in annually will be used for essentially the same purpose — advancing public safety.
McAdams wanted to set aside about $5.5 million of that money — supplemented with a $6 million appropriation in each of the next two years — to build a fund to invest in “Pay for Success” programs aimed at the roots of criminal behavior and recidivism in the county jail.
But the council came up with a revised plan after lengthy negotiations led by Republicans Aimee Winder Newton and Steve DeBry and Democrat Jenny Wilson.
They came to a compromise, knowing several members have reservations about Pay for Success because the concept is new and relatively untested, and in response to criticisms the county shouldn’t be holding onto money without a detailed plan for its use.
The Economist
This year, the ‘social impact bond’ celebrates its fifth birthday. Starting in the English town of Peterborough and spreading across Europe and the US, this quirky asset class is on the up. There are now over 40 worldwide involving hedge fund billionaires and charities, high financiers and NGOs. The Rockefeller Foundation thinks the US market will hit $500m by the end of 2015, from $80m in May 2014.
“SIBs” are appealing on paper. Investors fund a social program and if it hits performance targets they get their money back, plus a share of the cost savings that the project generated. The Peterborough experiment, for example, tried to stop ex-convicts from re-offending by helping them access services, giving mentoring, and shepherding them into training. This can save prisons money by cutting the number of wayward convicts they have to lock up later. Does it work? There have been some encouraging wins. A counselling project in New South Wales, Australia, reduced family breakups and lightened the burden on the foster care system. It paid a yield of 7.5% last year.
The Peterborough experiment performed less well but was no disaster. It reduced r
eoffending by a respectable 8.4% but needed 10% to get investors their first pay-out. It could come good in the second cohort in 2016, but after that it will be phased out due to a new nationwide rehabilitation law. Some have failed outright, though. A prison therapy program on New York’s Rikers Island had no impact on reoffending rates, losing Goldman Sachs $1.2 million. Others, like a pre-kindergarten project in Chicago, are criticised as an unwelcome entry of private profit into public services, while proposed SIBs in Maryland and Massachusetts were lambasted for their complexity and cost.
Missing targets does not mean failure.