Last week the Big Lottery Fund announced that up to £293,250 in grant funding has been offered in-principle to North Somerset Council for a four-year social impact bond (SIB) to support 240 local young people aged 10 to 17 who are at risk of going into care.
In this guest post Lorraine Bush, Policy and Partnerships Development Officer at North Somerset Council, describes the council’s experience to date of developing the SIB, and the key lessons they have learnt.
We began developing our SIB last year, as we saw it as a possible solution to the challenge we were facing of how to fund new interventions in a climate of constricting budgets. A SIB could help us overcome this, as investors would pay the upfront capital and we would only repay it if the service was successful. We were aware of other SIBs that had been set up to prevent children going into care and started looking at whether we could set up our own SIB to address this issue.
Developing the SIB has been a steep learning curve. I would say there are three important things we have learnt from developing our SIB so far:
1. Ensure you have good buy-in from internal staff
Early engagement with people within my organisation was important in ensuring everyone understood what the project was trying to achieve and we could address any concerns anyone might have. Having the SIB championed by someone in the organisation who was senior and well-established was critical in achieving this.
2. Prepare carefully and fully for the process of applying for CBO funding
It is important that anyone looking for funding from the Big Lottery Fund’s Commissioning Better Outcomes (CBO) programme ensures they have a clear vision of what the project will achieve and how it will benefit people and communities, and supports innovative and transformative services. While the application process is not difficult, the work required to make a successful application – in terms both of the information required and the need to prove value for money – should not be underestimated. The process may also take longer than expected and should be built into development plans.
3. Make good use of advice and support where it is available
There are sources of advice available that people can use to learn more about SIBs. We received invaluable support from Social Finance Ltd, funded through our CBO development grant. We also used the Cabinet Office’s Centre for Social Impact Bonds website, which has lots of information about important elements of SIBs like outcomes, models and evaluation.
We also spoke to other councils – including Essex, Manchester and Cardiff – who have done similar development work on their own SIBs and could offer invaluable insight.
For more information on the North Somerset SIB, and their experience of developing their SIB, read the case study report.