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, while also experimenting with new approaches and getting a better understanding of what works.
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 benefits 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. We then keep collecting their feedback throughout the delivery phase, so we can change the model accordingly.
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.
Ensuring all parties involved - commissioners, delivery partners, and BOP - have much clearer accountability. It's quite obvious whether or not a service has succeeded in tangibly improving people's lives. Clearer accountability encourages shared responsibilities and collective problem-solving, making sure a project delivers the best possible outcomes.
HOW OUTCOMES CONTRACTS CREATE CHANGE
See how Fusion Housing was able to innovate and improve the lives of young people at risk of homelessness in West Yorkshire, after switching to an outcomes-based model.
EVOLUTION OF SOCIAL OUTCOMES CONTRACTS
Faster, simpler, cheaper: the evolution of outcomes contracts from 'social impact bonds' over the last ten years.