Dr Daniel Edmiston on the risks and effects of Social Impact Bonds
Dr Daniel Edmiston has written about his recent study exploring Social Impact Bonds, in particular their unique risks and unintended effects on service innovation and social outcomes.
Social Impact Bonds (SIB) are payment by results contracts that leverage private social investment to cover the upfront expenditure associated with welfare services.
Based on his recent paper entitled Social Impact Bonds: The Role of Private Capital in Outcome-Based Commissioning he argues that, 'In theory, the presence of private capital in outcome-based commissioning has the capacity to accommodate for, and buffer against, the risks associated with public service innovation, which may, in turn, engender an improvement in the social outcomes achieved through public sector commissioning.'
Daniel goes on to discuss some of the challenges when measuring outcome, and the limited evidence so far, highlighting the 'inevitable limitations in trying to explore the operation and effects of SIBs through the perspectives of those who have a vested interest in their development and uptake.'
He concludes with a need for further critical and independent consideration to prevent the public sector running the risk of paying increased transaction costs associated with private social investment without realising the putative benefits offered through the SIB model.