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Commissioning Better Outcomes and the Social Outcomes Fund

Big Lottery Fund and the Cabinet Office have been working together to support the development of more innovative approaches to improving social outcomes
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Area:
England
Application deadline:
31/07/2016 23:59:00

What’s it all about?

Both Commissioning Better Outcomes (CBO) and the Social Outcome Fund (SOF) are now closed to new applications.

You can, however, apply for funding to support social impact bonds, as a means of improving outcomes, through the Office for Civil Society’s Life Chances Fund

Read the evaluation of Commissioning Better Outcomes

What was it all about

We have been focusing on approaches that use payment by results (PbR) mechanisms, particularly those which involve social investment such as Social Impact Bonds (SIBs).

To achieve this we have set up two funds - the Cabinet Office’s Social Outcomes Fund (SOF) and the Big Lottery Fund’s Commissioning Better Outcomes (CBO) – with a joint mission to support the development of more SIBs. Between them, these funds made up to £60 million available to pay for a proportion of outcomes payments for these types of models in complex policy areas, as well as support to develop robust proposals.

Aims

Our shared overarching aim was to grow the market in SIBs, while each fund had a specific focus that reflected the missions of the Big Lottery Fund and Cabinet Office. For the Big Lottery Fund, this was to enable more people, particularly those most in need, to lead fulfilling lives, in enriching places and as part of successful communities. For the Cabinet Office, this was to catalyse and test innovative approaches to tackling complex issues using outcomes based commissioning.

Support

Applicants who were successful at the expression of interest stage could get technical support from a range of specialist providers. Applicants were also able to apply for a development grant to partly pay for this support. The Directory of SIB Service Providers under the Related Documents section of this page remains relevant to those still progressing towards SIB launch with CBO full award subsidy and to those considering applying to the Life Chances Fund

Useful resources and contacts

The Department of Media Culture and Sport Centre for Social Impact Bonds continues to provides support to SIB developers and has produced a series of tools and resources for developing SIBs.

Bridges Ventures, in conjunction with Bank of America Merill Lynch, published a Practitioner’s Guide to Choosing Social Bonds This is aimed at supporting those who commission social outcomes, those who deliver them and those who provide capital to enable them in obtaining clarification of how SIBs can unlock better outcomes.

The Outcomes funds have committed funding to a varied range of CBO development grants and full awards. A PDF containing copies of press release summaries relating to successful applications to December 2014 can be found below and will continue to be updated as CBO makes further full awards through to late 2017.

Organisations new to the concept of ‘Social Impact Bonds’ may still find it useful to complete this quiz to test your understand of SIBs if they are looking to apply to the Life Chances Fund. It is intended to guide readers through the core aspects of the development of Social Impact Bonds. It is also designed to highlight where your knowledge gaps lie and where you may need additional advice or support’

Contacts

Big Lottery Fund has appointed Ecorys and ATQ Consultants as programme evaluators. More detailed information on this CBO programme evaluation is provided in PDF form as a related document below.

Social impact bonds: The State of Play report by Ecorys and ATQ

Ecorys and ATQ have also produced a report on Social Impact Bonds: The State of Play. This report looks at the state of play of SIBs in the UK and the perceived challenges and benefits of them. The report draws on a review of available literature about SIBs; a series of in-depth consultations with organisations centrally involved in the policy, strategic and/or operational development of SIBs; and surveys with the core groups involved in SIBs.

Summary information on the evaluation is set out below. Further detailed information on the evaluation can be found on the evaluation page

What we were looking for?

There is growing interest among public sector commissioners in the potential of SIBs to tackle complex and expensive social issues. Commissioning Better Outcomes and the Social Outcomes Fund had a joint overarching aim to support the development of more SIBs; however, each fund had its own specific focus that reflected the respective missions of the Big Lottery Fund and the Cabinet Office. The objectives for the two funds are set out below:

Commissioning Better Outcomes

  • Improved skills and confidence of commissioners with regards to the development of SIBs.
  • Increased early prevention is undertaken by delivery partners, including VCSE organisations, to address deep rooted social issues and help those most in need.
  • More delivery partners, including VCSE organisations, are able to access new forms of finance to reach more people.
  • Increased learning and an enhanced collective understanding of how to develop and deliver successful SIBs

Social Outcomes Fund

  • Increased innovation in public service delivery through outcomes based commissioning.
  • Improved cross-government working in public service delivery and encouraging co-payment by different commissioners.
  • Increased number of SIBs addressing complex needs and demonstrating ability to replicate by standardising the process.
  • Increased capacity for SIBs as a long term tool of government to improve outcomes and reduce costs, by supporting SIBs that test cashability of savings and ensure evidence is gathered to:
    - Determine performance of interventions on their primary outcome
    - Increase evidence on the impact of interventions on wider outcomes
    - Improve outcome valuation.

We decided during assessment which fund was most appropriate for each application and in some cases decided to jointly fund projects.

Who could apply?

As many of the objectives for the two funds complemented each other, there was a single set of forms to make applying as simple as possible

Applicants followed a two stage application process consisting of an expression of interest (EoI) and, once this was approved, a full application. Commissioners, providers or intermediaries could all submit an EoI, but we expected full applications to be from a commissioning organisation (typically a public sector organisation) based in and serving people in England. For example:

  • a Local Authority, seeking to improve outcomes for troubled families.
  • a Central Government Department, seeking to reduce problem drug use. (For SOF only)
  • a Clinical Commissioning Group, seeking to reduce hospitalisation of the elderly.
  • a Police and Crime Commissioner, seeking to reduce gang membership.

In exceptional circumstances we did consider full applications from other organisations (such as providers) based in and serving people in England as long as there is a commissioner involved, where this was discussed with us before applying.

Throughout the development of your model, we expected proposals to:

  • undertake early and extensive research and stakeholder engagement
  • consult with beneficiaries
  • consult with a wide range of potential delivery partners, including those from the voluntary, community and social enterprise (VCSE) sector
  • find support for your SIB from a range of different stakeholders such as other commissioners, investors, delivery partners and prime contractors
  • be aware of your obligations under the Public Services (Social Value) Act 2012, and consider how any procurement might improve the economic, social and environmental wellbeing of the local area.

How much was available?

The Big Lottery Fund had up to £40 million available through Commissioning Better Outcomes. Up to £5 million of this total was set aside for development funding.

The Cabinet Office had up to £20 million available through the Social Outcomes Fund.

In your full application you could have asked us to pay for a minority proportion of outcome payments to cover, for example, non-cashable savings or savings that fall to other commissioners who cannot pay for outcomes. There was no minimum or maximum funding available for each SIB but we expected the average amount of funding to be around £1 million. We only contributed a minority proportion of outcomes payments, and expect the average contribution to be around 20 per cent of the total outcomes payments, including typically up to a benchmark of 15 per cent from CBO.

Grants funded varied from £19,000 to £150,000 to purchase technical support to develop SIBs.

More funding may be available in exceptional circumstances. Please discuss this with us before applying.

Funding could not be used for:

  • day-to-day running costs for organisations
  • pilot activities or any direct service delivery
  • retrospective costs.

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Organisation Types

  • Voluntary or community organisation
  • Public sector organisation
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