The current UK government has one brilliant reformer at its core. I have mentioned Mr Iain Duncan Smith previously on these pages. Here is an article discussing his work which includes SIBs amongst his many reforms. Worth reading wherever you may be in the world and wherever you may sit on the political spectrum:
Iain Duncan Smith: How Private Finance Can Revolutionise Public Services
Iain Duncan Smith, Secretary of State for Work and Pensions – Daily Telegraph
Already this Government has created 31 social impact bonds – more than the rest of the world put together.
The evidence is very positive. The Peterborough prison bond reduced offending by 8.4% for the first thousand short sentence prisoners that went through it. DWP’s Innovation Fund has generated 16,000 positive educational outcomes for young people. The rough sleeping bond in London has reduced rough sleeping by 30%.
These bonds mean providers and investors have a joint social mission – the incentives of all parties are aligned to achieve long-term sustainable outcomes for the worst off.
There is more to this than just creating social impact bonds, we also need the right market infrastructure in place too – which is why we established Big Society Capital, the world’s first social investment wholesaler; and introduced a social investment tax relief, forecast to generate up to £480 million over 5 years.
This is also about enabling social ventures to win public service contracts and helping to build relationships between frontline social organisations and private investors, and continuing to support social enterprises – currently contributing £55bn to the UK economy.
With the UK social investment market estimated to grow to £1billion by next year, the potential for this nascent market is huge.