The Peterborough Social Impact Bond
Question for individual assignment
Please provide an overview of the Peterborough Social Impact Bond and discuss the main results to date. Please provide your assessment of whether the Peterborough Social Impact Bond is on track to accomplish its objectives.
The purpose of this report is, first, to give an overview of the Peterborough Social Impact Bond and its main results to date. Then, I'm going to propose an assessment of whether this SIB is on track to accomplish its objectives or not. First of all, before discussing the Peterborough SIB, it is important to briefly define the concept of SIB.
What is a SIB?
A Social impact bond is an outcomes-based contract in which a public sector commissioner (governments or others) commits to pay for significant improvement in social outcomes for a targeted population. To do so, some interventions, which are financed by private investment, are delivered by a service provider with the potential to generate downstream savings for government.
Finally, depending on an assessment made by an evaluator, financial returns to investors are made by the government if and only if the interventions achieved the contracted improvement in social outcome. However, if the outcomes don't improve, investors lose their investment. So the key particularity of this new kind of investment is its ability to align investor's interest with social returns and to provide an incentive for service providers to achieve outcomes and not only deliver outputs.
Basically, a SIB partnership involves five stakeholders:
The government or commissioner
The SIB delivery organization which is the intermediary between investors and the commissioner.
The service provider
A third-party evaluator
The Peterborough SIB is the world's first Social Impact Bond and was launched, in 2010, at HMP Peterborough, in collaboration with the...