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We can use social impact bonds to tackle violent crime

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The Conservatives’ pledge to ‘scale [social impact bonds] up in the future’, repeated recently by the prime minister, will likely receive a mixed reception.

However, as the chief executive of a social business providing public services I remain enthusiastic about SIBs. In a time of austerity they offer opportunities to deliver co-designed, preventative, and user-led services. At the same time they offer significant downstream savings for local authorities and other commissioners.

Today’s toughest social challenges, from children in care to dementia, require ambitious solutions. If we are willing to look beyond the perceived complexity and bureaucracy, SIBs can provide some of the answers we need.

Catch22 is exploring the possibility of a gang SIB in partnership with West Midlands Police which demonstrates this potential. The full social and financial impact that this SIB could have is best illustrated by the story of a typical gang member; let’s call him John.

Like many of his counterparts John had issues with his behaviour growing up and was regularly exposed to violence, crime, and drug dealing in his neighbourhood. By 13 John was in a gang and began to miss school. Aged 15 he was permanently excluded.

In the same year he was arrested for a minor drug charge and was referred to his local youth offending team. At the age of 17 John felt slighted by a rival gang member and so attacked him with a knife. He was sentenced to two years in prison.

The impact of these events on John and his community is a call to action in itself, but its wider financial costs are also difficult to ignore.

AgeEventCostCommissioner
13Five weeks’ truancy or more per year£1,500Education and social services
15Permanent exclusion from school£11,200Education and social services
 Minor drug offence£2,100Police and youth offending team
17Treating a stabbing£8,000NHS
 Grievous bodily harm conviction£132,000Police, courts and prisons
 Total cost to public services£155,500 

 

Our SIB aims to draw down a small proportion of these costs to provide every at-risk individual with intensive support from a key worker and mentor. They will act as a credible, persistent, and positive presence, turning young lives around and reducing crime and violence.

It will also pay for itself. Based on our track record and evidence of impact, investors will fund our delivery on a risk basis. A portion of the cashable savings we generate will repay investors and provide a return through outcome payments. However, if we do not deliver our service will cost local commissioners nothing.

Where next

Approaches like this could transform public services. Together commissioners and delivery organisations need to focus on the lives we are trying to turn around if we are to make the most of the opportunities that they offer.

Exciting ideas that solve costly social challenges should come first. The detail on legal structures and special purpose vehicles can come later.

Chris Wright, chief executive, Catch22


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