Social Impact Bonds and disability

(The following represents Nigel Fenner's personal views, rather than those of Hertfordshire PASS.)

There has been quite a lot of media coverage recently on social finance or social impact bonds:
"A Social Impact Bond is a contract with the public sector in which it commits to pay for improved social outcomes. On the back of this contract, investment is raised from socially-motivated investors. This investment is used to pay for a range of interventions to improve the social outcomes. The financial returns investors receive are dependent on the degree to which outcomes improve. By enabling non-government investment to be raised, Social Impact Bonds should lead to greater spending on services that prevent costly health and social problems.
Take, for example, re-offending by released prisoners, which costs government millions of pounds a year. A Social Impact Bond could be used to raise money to pay for the expansion and coordination of services to reduce re-offending.
The more effective these services are at achieving the target outcome, the higher the blended (social and financial) return investors would receive."
'Towards a new social economy'. Published by Social Finance Ltd. March 2010.

Because I believe disability might benefit from such investment I today emailed the MP responsible for leading a review on this with 4 questions:

1. Have you considered user-driven projects?
I currently manage Hertfordshire PASS, a charity which starts with the premise that the best people to solve the problem of unemployment amongst disabled people, are disabled people themselves. For example our WorkABILITY project is currently managed by 6 young disabled people employed as apprentices, providing work experience, apprenticeship and employment opportunities for their peers. We’ve not only written 2 books on the users experiences, but also 3 academic papers on the ‘user-driven’ methods we employ. Whilst I have spent the last 5 years in ‘disability’, I learnt the theory and practice of user-driven methods over 6 years with the Grubb Institute of Behavioural Studies where we developed a user-driven approach to relationships education in 7 Young Offender Institutions. From my experience these methods developed with young offenders apply equally well with disabled people......

2. Have you considered social enterprise?
Given many social challenges lend themselves to enterprising solutions we have published a major paper entitled ‘User-driven Social Enterprise’ – go to http://www.hertspass.com/2010/08/user-driven-social-enterprise/#more-356

3. Have you considered ‘disability’?
I understand the brief to your report focuses on crime, when I believe there is as much potential for social impact in disability, given the significant dependence on State Benefits for this group. Are we not ripe for investors to invest in our WorkABILITY project and secure a return for each of the young disabled people we get off benefits into employment? At the moment this stands at 2 of the 6 apprentices we employ.

The potential for saving the government money and generating a return for an investor is not just restricted to moving disabled people from benefits into employment. For example the whole Personalisation agenda endeavours to move disabled people from state provided care to care determined and managed by the individual, usually in their own homes. There are considered to be over 100,000 disabled people on Direct Payments in the UK; some evaluation studies claim Direct Payments (or personal budgets or self-directed support) are cost effective, other studies are not so convinced. "However, with government funding for councils expected to contract from 2011 onwards and the numbers of older and disabled people requiring care set to go on increasing, social care leaders will hope that self-directed support can definitely deliver more for less." Jeremy Dunning 12th Feb 2010. 'Are personal budgets more cost effective? Community Care.

4. Have you considered the ‘disabled £’ or ‘purple £’?
One advantage ‘disability’ has over ‘crime’ in terms of being an attractive investment for would-be investors is that the ‘disabled £’ or ‘purple £’ is worth £85billion / year. So, not only will an investor make a profit out of a programme which moves disabled people off benefits, but also increase the likelihood of selling their products / services to the 20% (and increasing) of the UK population who are disabled. Again we’ve written a paper on this area entitled ‘The relationship between disabled people and the commercial sector – moving on from ‘fight and flight’ to access the purple £’. This paper was presented at the Social Enterprise Research Conference in 2008 (Go to: http://www.lsbu.ac.uk/bus-cgcm/conferences/serc/2008/papers.shtml - and scroll down on the first page to the paper presented at 15:15.)


Whether I get a reply from the Minister or not I still see 'Social Impact Bonds' as being important for the sustainability of the work we (and many other innovative charities) do, given the current economic climate.