Ho

sted

by:

Fu

nd

ed b

y:Third Sector Research Centre and Centre for Enterprise & Economic Development Research (CEEDR)

Professor Fergus Lyon

Commissioning and social value

PMPA, 28 November 2011

Introduction• Growing interest in commissioning social

outcomes• Innovative approaches and value for money-

benefits for the public sector and service users• Multiple objectives make contributions to a

range of public sector goals– economic, social and environmental

• How to commission for social value and innovation?

Commissioning social value• Social value

– Measure of worth, wellbeing, above and beyond benefit of goods and services

• Commissioning services of social value• From commissioning outputs to commissioning

outcomes• Best Value and beyond CCT• Social clauses• Limited by applying EU directives unnecessarily

• Hill Holt Wood

– Education for excluded from schools

– 14 acres self sustaining woodland using traditional craft

– Council trained staff and helped set curriculum

– Reduces antisocial behaviour and costs

– Diversifying

Social value in the coalition• Payment by results• Right to bid to run local services• Public sector worker cooperative spin outs • Social impact bonds• Big Society Capital• Where will support come from?• The Bills

– Open Public Services, DH,– Public Services (Social Value) Bill

Spin outs• Cultural, technical and

legal changes• Uncertainty under

previous government and current coalition

• What types of innovation

• Claims of a Trojan horse for privatisation?

Social Impact Bonds

• Organisations raise finance from private or charitable investors

• Contracts to deliver public services and investors paid by results

• But how to set payment, when to pay, what indicators, how to avoid cream skimming and can the government borrow more cheaply

Measuring impact

• External pressure from commissioners and funders ( reactive)

• Proactive decision to sustain or grow activity– To win contracts– To break an image– To create a new image– As a sign of change of character of organisation– Provide an evidence base to find new funding– To be professional and businesslike

•Socially inclusive fee structure•Focus on poverty and

disadvantaged areas•Intergenerational programmes•Quality of provision•Training, apprenticeships and

qualification offer•Consideration of environmental

impact (e.g. procurement)

London Early Years Foundation

Challenges for commissioners• Setting outcome indicators that are

measurable• Which method – benefit, monetised or

distance travelled• Allowing the cost of measurement in bids• Balancing setting indicators with innovation• Encouraging the reporting of smart failure• Interpreting ( and trusting) the results from

providers ( in bids or PBR)• Dangers of comparing the uncomparable

Six questions commissioners should ask

1. What indicators?2. What data and sample size?3. Who surveyed?4. How monetised?5. What counterfactual or deadweight

(what would have happened without activity)

6. What reported ( and what left out)

Building capacity in the Third sector

• Building social entrepreneurial cultures and helping start up

• Advisory services – Who - specialist or mainstream?– Which sector - Public sector, third sector,

community groups or private– What type- training, coaching, mentoring, on-line?

• Building confidence- of staff and board members

• Finance

Social investment • Public sector loan funds support TSO

responding to commissioners eg Futurebuilders

• Social impact bonds

• Community shares and bonds

• Demonstrating financial and social returns

• Resistance to loan finance and risk

Conclusion

• How to commission for social value• Support for charities and social enterprises to

start and grow• Support for commissioners• Interpreting social value reporting