Peterborough Social Impact Bond shown to cut reoffending and make investor returns
As a result of the success of the programme, the 17 investors in the Peterborough Social Impact Bond, one of which was the Barrow Cadbury Trust, will receive a single payment representing their initial capital plus an amount that will represent a return of just over 3% per annum for the period of investment. The Peterborough Social Impact Bond was measured by a reduction in the number of reconvictions.
In 2010 Social Finance raised £5 million from trusts and foundations to launch the first ever Social Impact Bond to reduce reoffending among short-sentenced offenders leaving Peterborough prison. It funded the One Service – an umbrella organisation designed to respond to the complex needs of offenders to help them break the cycle of reoffending. Over five years of operation, support from the One Service was offered to two cohorts of 1000 short-sentenced male prisoners for a period of up to 12 months post-release.
Engagement was voluntary but the whole cohort was included in the measurement of the results. Most of the clients on the Peterborough One Service had reoffended before, and for many, a spell in custody did not act as a deterrent. They had acute needs. A high proportion suffered from mental health and substance abuse challenges. Many had housing needs, didn’t have access to money and were in debt, and didn’t have the right skills to find employment.
The One Service was delivered by St Giles Trust, Ormiston Families, Sova, MIND, TTG Training, YMCA and John Laing Training, and managed by Social Finance. Over the course of its operation, it was an integral part of the Safer Peterborough Partnership and worked closely with the Police, Probation, Integrated Offender Management Teams, the Prison, the local authority, local statutory providers and the voluntary sector.
Not all of the £5m was drawn down over the course of the programme. It was terminated early with the introduction of a national rehabilitation scheme for all offenders in 2015. 2000 offenders were supported through the Social Impact Bond funded programme. The Ministry of Justice continued to fund the One Service directly for a further year.
Notes
1) Social Impact Bonds provide investment to address social problems and look to fund preventative interventions. They link financial success to the delivery of measured social outcomes. If, and only if, the social outcome improves, the outcome payor repays the investors for their initial investment plus a return for the financial risks they took.
2) Social Impact Bonds are designed to overcome the challenges governments have in investing in prevention and early intervention. They mitigate the risks of failure and bring in impact investors, who want to test innovation and scale successful programmes. Investors provide flexible funding to programmes that are designed to be responsive to the needs of vulnerable groups to improve their lives.
3) For a full list of Impact Bonds in operation and those in development, please click here. The database gives details of all the programmes and the full or interim results of programmes where available.
4) 17 impact investors committed £5m in 2010 to the Peterborough Social Impact Bond to fund a series of rehabilitative interventions for three cohorts of 1000 shortsentenced male prisoners for a year after their release from Peterborough prison. All funding was provided at risk by impact investors whose financial return was aligned to the positive social impact of reducing reoffending.
5) Investors in the Peterborough Social Impact Bond included: Barrow Cadbury Trust, the CowPat Trust, Esmée Fairbairn Foundation, Friends Provident Foundation, Golden Bottle Trust, The Henry Smith Charity, the Hintze Family Charitable Foundation, J Paul Getty Jr Charitable Trust, Johansson Family Foundation, K L Felicitas Foundation, LankellyChase Foundation, Monument Trust, Panahpur, Paul Hamlyn Foundation, R&S Cohen Foundation, Rockefeller Foundation and the Tudor Trust.
6) The programme, which was originally intended to run for 7 years working with three groups of 1000 prisoners, was terminated in 2015 with only two cohorts. This was due to the roll-out of the Transforming Rehabilitation national reforms to probation, which introduced mandatory statutory supervision for all short-sentenced offenders. This made it impractical for the service to continue or for its subsequent impact to be measured. The One Service continued to operate under a fee-for-service arrangement paid by the Ministry of Justice until the new Community Rehabilitation Companies started delivering through the gate services.
