Social Impact Bonds and fuel poverty
Exploring a novel way of funding fuel poverty alleviation work
Project duration: July 2011 to February 2013
Social Impact Bonds (SIBs) offer an innovative and powerful new mechanism for leveraging private sector investment into social welfare programmes.
The SIB concept can be defined as: a commitment from a public authority (e.g. an NHS Trust) to use a proportion of the savings that result from improved social outcomes (e.g. reduced hospital admissions) to reward non-government investors (e.g. a charitable trust) that fund early intervention activities (e.g. a fuel poverty alleviation programme).
This project examined the feasibility and desirability of SIBs as a funding instrument for fuel poverty alleviation activities, exploring the required technical, financial and institutional arrangements. Widespread interest in SIBs has resulted from a government agenda focussed on reducing public spending, reforming public services and growing the social enterprise sector.
The promise of SIBs is that they can deliver on all these counts:
- through stimulating early prevention programmes which cut public sector costs
- by encouraging innovative performance-based approaches to welfare provision and
- through creating new opportunities for social enterprise.
The key task of this piece of work was to assess the feasibility and desirability of Social Impact Bonds as a significant new source of funding for fuel poverty alleviation, and specifically:
- To identify the financial, technical and institutional arrangements which would make feasible an SIB funded programme of fuel poverty alleviation measures.
- To assess the potential positive and negative implications of using SIBs to fund FPA
- To assist policy makers working in the public health and housing sectors to integrate FPA when designing outcome-based schemes to deliver social welfare programmes.
The main outcome of the project was a report that provides policy-makers, investors, public sector commissioners and other practitioners with clear guidance on design, implementation and other key considerations for SIB-funded fuel poverty alleviation programmes.
You can download the report 'Fuel Poverty Social Impact Bonds: Their potential role and associated challenges' here.
Picture: Chris, via flickr, reproduced under creative commons