HOW IT WORKS
Outcomes-based contracts support closer, more collaborative partnerships between Government, the social sector and social investors – with clear alignment around specific impact goals.
For delivery organisations, this approach creates the financial security, the data-driven insight and the flexibility they need to adapt and tailor their programmes to their particular circumstances – while also giving them a strong incentive to deliver the best possible results for service users.
For commissioners, it’s also a way to tap into flexible, mission-aligned project finance and additional project management resource. We provide this fully at-risk: unless the project delivers demonstrably better outcomes than existing services, the additional cost to the commissioner should be zero.
Outcomes contracts are already helping commissioners drive delivery innovation, improved results and better value-for-money from existing services. At the same time, they also allow for experimenting with new approaches and enable better understanding of what works, thanks to three key components.
We explore these three key components in detail, alongside our learnings from running 10 years of outcomes partnerships, in our latest report:
All of our projects are funded via 'social outcomes contracts' - meaning the commissioner pays for the achievement of certain performance milestones, not for the delivery of a pre-specified service.
Commissioners include local authorities, clinical commissioning groups, central government departments, the National Lottery Community Fund, schools, philanthropists and local businesses.
We think this change of focus has three important elements that help us succeed:
Moving away from rigid specifications allows for a more collaborative approach to service design. As well as drawing on local and central Government expertise, we involve specialist delivery organisations, community groups and participants in the design process - their front line expertise helps to ensure the service is fit for purpose and works with other local services in a joined-up way.
Giving delivery organisations flexibility to deliver a contract. Our partners are using this freedom to adapt and personalise their service throughout. Increasingly, they are focusing on people's strengths and potential, rather than simply addressing their immediate 'needs'. We've found that tailoring a service to the participants - instead of taking a 'one-size-fits-all' approach - tends to drive better, more long-term results. We also collect feedback throughout the delivery phase, so we can adjust the model regularly and achieve greater impact.
Ensuring all parties involved - commissioners, delivery partners, and BOP - have much clearer accountability. Clearer accountability encourages shared responsibilities and collective problem-solving, making sure a project delivers the best possible outcomes. All parties are focused on and accountable for the extent to which they improve people’s lives, using up-to-date, high-quality data, shared learnings, progress transparency and feedback mechanisms.
EVOLUTION OF SOCIAL OUTCOMES CONTRACTS
Faster, simpler, cheaper: the evolution of outcomes contracts from 'social impact bonds' over the last ten years.