Here is an interesting proposed application of social impact bonds:
The way SIBs worked in Peterborough, UK, government shared savings that were generated by a social intervention - in that case, avoiding a costly incarceration - with the service provider that delivered that intervention. For SIBs to work here, a social service providers could be tasked with moving elderly couples out of family homes. Each moved couple would generate financial return if the affordable rent on their now-vacant house (80% of market rent, as the article says), exceeded the cost of housing them elsewhere plus the cost moving them, plus the cost of operations for this social service provider. This financial return could be split with the provider - and the social impact bond scheme could work.
The government could, however, go it alone and keep all the savings to itself. The only reason to use social impact bonds here, in my mind, is if the government thinks that financially-incentivized providers could do a drastically better job at moving elderly couples (while adhering to social and ethical standards), or could do the job just as well but have the capacity to act on a much larger scale. If the government can get the same efficiency and scale, then perhaps social impact bonds are not the right approach here.
There are 25 million empty bedrooms in England - mostly where elderly couples have remained living in family homes.The Redbridge pilot scheme "Free Space" offers them to the chance to remain owners but to move out. The local authority pays for the cost of moving and charges an "affordable rent" (up t 80% of market rent) the proceeds of which go to the owner ( who also saved money on Council Tax and utility bills by having a smaller property.)
It is proposed that Social Impact Bonds - the scheme to attract private investment for schemes where the social benefit produces a financial return - would be suitable for these schemes.
The way SIBs worked in Peterborough, UK, government shared savings that were generated by a social intervention - in that case, avoiding a costly incarceration - with the service provider that delivered that intervention. For SIBs to work here, a social service providers could be tasked with moving elderly couples out of family homes. Each moved couple would generate financial return if the affordable rent on their now-vacant house (80% of market rent, as the article says), exceeded the cost of housing them elsewhere plus the cost moving them, plus the cost of operations for this social service provider. This financial return could be split with the provider - and the social impact bond scheme could work.
The government could, however, go it alone and keep all the savings to itself. The only reason to use social impact bonds here, in my mind, is if the government thinks that financially-incentivized providers could do a drastically better job at moving elderly couples (while adhering to social and ethical standards), or could do the job just as well but have the capacity to act on a much larger scale. If the government can get the same efficiency and scale, then perhaps social impact bonds are not the right approach here.
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