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Peterborough Social Impact Bond Reduces Reoffending By 8.4%

Results for the first group (cohort) of 1000 prisoners on the Peterborough Social Bond (SIB) were announced today, demonstrating an 8.4% reduction in reconviction rates relative to the comparable national baseline. The project is on course to receive outcome payments in 2016. Based on the trend in performance demonstrated in the first cohort, investors can look forward to a positive return, including the return of capital, on the funds they have invested.

The momentum in the project reflects the significant advantages of the model – that long term funding provides the scope to build a deep understanding of the complex needs of offenders and the flexibility to invest in meeting them.

 

The Ministry of Justice and the Big Lottery Fund will make payments to investors in 2016 if there is a reduction in reoffending of more than 7.5%; but the project does not qualify for a payment at this early juncture.

 

The results were compiled by independent assessor Professor Darrick Joliffe and his team from Qinetiq and the University of Leicester, for the Ministry of Justice, using the PSM methodology. The independent assessor calculated that there were 142 reconvictions per 100 prisoners in Peterborough compared to 155 reconvictions per 100 prisoners in the control group.

 

“We are very encouraged by the evidence of the positive impact of the support the SIB has provided in the first cohort and are encouraged by continuing improvements in our work with offenders on the second cohort. The SIB has given our delivery partners the resources and the freedom to meet the complex needs of our prison leavers very effectively,” said David Hutchison, CEO of Social Finance.

 

Sara Llewellin, CEO of the Barrow Cadbury Trust and SIB investor said: “We are delighted with the progress made in the first cohort of the Peterborough Social Impact Bond. As investors, we wanted to prove that by doing something differently, and by being more flexible, we could indeed create a different outcome. An outcome which is a ‘WIN, WIN’; a win for the taxpayer as the volume of repeat crime falls and a win for prisoners and their families when they take charge of restabilising their lives.”

 

“Resettlement of short term prisoners has long been a blind spot of criminal justice and social welfare systems. The independent funders who came together to invest in the first Social Impact Bond saw an opportunity to move beyond temporary gap-filling towards developing and testing a whole sustainable system. There are many lessons that we need to learn from this bold experiment, from its data driven rigour, to its clear value base, to its ability to contend flexibly with complex social issues. The prospect of getting our investment back with a return is an exciting indication that thorough-going resettlement can create enough cashable savings to make a new system affordable when done properly,” said Julian Corner, CEO of the LankellyChase Foundation and investor in the Peterborough SIB.

 

“The One Service has helped me with a training course, housing needs, food, electricity and someone has always been on the end of the phone even if it’s just someone to talk to. I have rung them so many times even if it is just to rant and vent what I’m thinking. If it hadn’t have been for this I would be back in prison by now.” Mr Flattley, One Service client, with 24 prison sentences and no previous rehabilitative support.

 

Background to the pilot

Social Finance launched the Peterborough Social Impact Bond in 2010, supported by 17 foundations, who committed to invest £5million. It was designed as a seven year pilot to test the premise that offering comprehensive and individual support to prisoners would help them stay out of prison and build a new life for themselves on the outside. The first cohort of prisoners was released from September 2010 – May 2012. During this period, Social Finance set up a new service, known as the One Service, which included delivery organisations St Giles Trust, Sova, Ormiston Families, YMCA and, MIND to provide housing, family, health, employment and training support. The One Service also works with local drug and alcohol services. John Laing Training joined the project in the second cohort.

 

Early learnings

As the programme progressed, it was clear that there were three gaps which impacted the lives of prison leavers most profoundly: the provision of accommodation, support for low-level mental health needs and the lack of training and employment opportunities. Flexible funding from investors allowed the One Service partners to create a multi-agency offering to respond to these needs of the offenders.

 

Improving performance

Repeat offending by short sentenced prisoners has challenged the UK for many years but no statutory support has been on offer for this group of prisoners. As offenders recognised that the Peterborough project was stable and long-term, and would continue to support them even if they ended up back in prison, engagement levels rose from 74% in Cohort 1 to 86% in Cohort 2 while in prison and from 37% (cohort 1) to 71% (cohort 2) after release.

 

Not only did engagement levels rise over the course of the first four years, but the team’s understanding and ability to meet the needs of offenders improved. This is reflected, for example, in the reoffending rates for the first six months of the Cohort 2 which lie 8% below those for the first six months of Cohort 1.

 

“Rehabilitating prisoners demands commitment, proper financial resources and patience. The project was deliberately set up to be a long term project so that we can learn, improve and refine the best ways of supporting prisoners on release. Today’s results are very encouraging,” said David Robinson, chair of the Peterborough SIB Advisory Board.

 

Local relationships

The One Service established an excellent working relationship with Peterborough prison and close links with local statutory and voluntary partners in the area. Many of the One Service’s practices, such as the through the gates model, have been adopted more widely.

 

A representative from the Peterborough Community Safety Partnership wrote in June 2014: “We have [..] been fortunate enough to bear witness to the journey of the pilot as it has evolved, as well as to experience first hand some of the case studies that really do bring the scheme to life. There have been, and […] sure will continue to be, some truly inspirational stories involving often entrenched offenders transforming their lives as a direct result of the work of the One Service leading to significant public sector direct and enabled savings and a real reduction in re-offending with fewer victims of crime as a result.”

 

Independent research

Leading research institute RAND Europe published an independent evaluation of the Peterborough SIB in April 2014 which concluded that the innovation lay in the flexibility of the funding, the local management and operations of the project, the frequent review and adaption of the intervention models and the collection and use of management information.

 

Wider adoption of the Social Impact Bond model

The Peterborough pilot was the first Social Impact Bond – a new model of investing into preventative services to tackle entrenched social problems. It aligns social impact with financial return by linking payments to investors with increased operational success. If the impact is not achieved, investors do not receive payments and risk losing their investment.

 

Social Impact Bonds provide additional and non-governmental funding to chronic social issues such as youth unemployment, children in care, homelessness and criminal justice. Following the Peterborough launch in 2010, there are now 16 Social Impact Bonds in the UK, 4 in the US, 2 in Australia, 1 in Canada, 1 in the Netherlands, 1 in Belgium, 1 in Germany and more than 100 proposals world-wide. Over $100m has been raised in social investment to fund Social Impact Bonds globally.

 

Three of the SIBs under Social Finance management have already paid outcome payments to investors.

 

Transition arrangements agreed for the continuation of the One Service

As a direct consequence of the Government’s decision to restructure the provision of probation services nationally, the Ministry of Justice announced on 24th April 2014 that it would bring the Peterborough pilot to a close early. The Ministry of Justice has been keen to structure transitional arrangements to ensure that the pilot is able to complete its work with the second group of 1000 prisoners using the Social Impact Bond model. In addition the Ministry of Justice has been keen to ensure the continuity of the service to those who would have joined the third and final group until a new contractor takes on responsibility for the East of England. Details of the transitional arrangements have now been agreed and are set out in the announcement included in the notes to editors. They reflect directly the wish of all parties that the service continue in its current form until the new national arrangements are in place and that investors’ interests are properly respected.