The Chances Programme Social Impact Bond (SIB): Sport and physical education for youth engagement

In 2020 the first sports-based SIB, the Chances Programme, was launched in England as part of the Department for Culture, Media and Sport (DCMS) Life Chances Fund.


The programme uses sport and physical activity to support young people considered ‘at risk’ in disadvantaged locations by encouraging their adoption of more positive pathways.

Involving 20 councils as outcome payers (the local commissioners) covering district, borough, city and county councils plus two national outcome payers. It has the largest number of outcome payers in the world for a SIB.

It is an opportunity to improve partnership working between councils and Voluntary and community services (VCS) sport and physical activity providers. Helping to align local sport and physical activity delivery with a range of council policy objectives.

The challenge

The statutory provision of youth services has been experiencing on-going cuts. The YMCA estimate a reduction in real term of over 70 per cent during the last decade. At the same time there are increasing needs to support young people, in particular those considered ‘at risk’.

Sport provision can deliver intervention to young people at risk, helping to support and manage young people’s behaviours and actions into more positive pathways. Creating savings in other services and reinforcing the maxim that prevention is better than cure.

A challenge is how local sport and leisure provision can secure funding to play a role and how can the social value delivered be understood.

The solution

SIBs offer potential, both for councils managing costs as an outcome payer and for sport and leisure to secure new funding sources.

The DCMS Life Chances programme is an £80m programme to incentivise council’s participation in SIBs. The Chances Programme is the first SIB using sport as the tool to deliver outcomes.

Twenty-two councils are involved as outcome funders, with Sport England and the DCMS Life Chances Fund also contributing towards outcome payments. Chances is an outcomes-based contract which uses a ‘payment by results’ method whereby council’s pay once successful outcomes are achieved by local sport VCS bodies.  

Big Issue Invest are the social investor, providing £1.25 million in upfront funding. Effectively the first year of delivery costs and the social investor carries the financial risk for non-delivery of outcomes.

The social research agency, Substance, are the programme manager performing various roles to ensure the SIB functions on both a national basis and for each participating council.

The SIB has a national specification and ‘rate card’ of outcome triggers but with freedom for councils to decide on how those outcomes are delivered at the local level. Creating social change in a financially efficient method by transferring financial risk to the investors.

It offers an opportunity for collaboration between councils to secure national funding to deliver local services, using sport VCS providers with financial incentives to deliver councils’ children’s social care objectives.

Local VCS sport providers secure funding to improve their own viability and can demonstrate their ability to deliver wider social policy objectives. Creating an alternative method of financing local ‘sport for impact’ delivery.   

The three policy areas in the outcomes framework are:

  • health and well-being
  • employment, education and training
  • youth justice.

A participating council has the ability to identify and refer young people whilst the provider has flexibility to deliver an appropriate programme of activities to support the referrals. An aim is to ensure the young people engaged have an existing cost implication for the council such as in education, social care or youth offending. It is best achieved by the relevant department referring young people to the VCS provider.

The council budget for this SIB generally sits within social care but it varies including Not in Education, Employment or Training (NEET), youth justice, educational entitlement and community teams.

As sports and recreation provision is increasingly falling outside the realms of councils, creating additional revenue for VCS providers and securing funding from beyond sport is helpful to retain community local sports and leisure provision. In particular ‘inclusive provision’, targeted at those most needing intervention.

The Chances SIB will provide learning and insight for how future sports and recreation provision could benefit from this alternative financing mechanism.

The impact

It is still relatively early-days for the programme with the final social outcomes not known. The programme nationally aims to engage 6,720 young people by a range of activities to deliver the intended outcomes.

Improved cost control

The SIB provides cost control to councils as their contribution is capped at £90,000 over the three-year programme. If outcomes are not delivered, they do not pay. Additionally, they can secure £180,000 between Sport England and the Chances Fund as additional outcome funders to support provision plus the upfront funding from the social investor, Big Issue Invest.

Financial savings are not yet understood as it is only a year and half into the programme. The value of the impact needs to be calculated to measure savings. Substance is in the process of assessing the value to councils.

Value of outcomes delivered

In terms of comparing outcomes against previous delivery by councils it is difficult to quantify. Substance suggests a common point raised is the £30,000 annual contribution is equivalent to a member of staff, so outcomes need to be at least commensurate. The flexibility in local delivery make national assessments difficult but a council needs to be able to assess the value to them.

Improved local partnerships and corroborative working

A key impact should be the improved partnerships between councils and local VCS providers, derived from corroborative working. In many cases for this SIB the local providers have been identified by Substance, the programme manager. A legacy may be council’s being more aware of potential local delivery partners.

The SIB also incentivises VCS providers to align with the needs of councils, specifically with a SIB, to deliver where a council has an intended outcome with a current cost implication.

Stronger network of local delivery partners

An impact with ongoing value relates to the VCS providers, not just in securing funding. It provides a mechanism to deliver where a council has a need and a current cost implication.

Additionally creating a strong incentive to improve capability in collecting data to demonstrate impact, helpful for future provision.

Demystifying SIBs

SIBs cannot be applied comprehensively to all council service provision and commissioning but there will be situations where they are appropriate. There is a need for a defined intended outcome, that can be measured and valued. As part of that it should reduce council’s expenditure in other services.

The Life Chances Fund with twenty-nine SIBs involving councils should increase understanding of how councils can best apply and structure. It may be that for SIBs involving multiple councils an element of national/central funding is required, not least for coordination and programme management, but there is potential for councils to take this approach without national intervention and funding.  A key learning of the Chances programme should be to begin the process of demystifying and applying SIBs where most effective when the Life Chances Fund ends in 2025.  

A good source of information and signposting for further information can be found from the DCMS SIB guidance website.

How is the new approach being sustained?

The potential impact of SIBs for sport and leisure is not yet understood. Can they help it be recreated as part of community hubs supporting social, education and health policy objectives with funding secured from a range of sources. Initiatives such as this are a key part of the learning process. 

The future of the programme beyond the current three years is not yet known. The success of this and other SIBs will be deciding factors for if and how the approach is sustained. National commitment from government and other sources including social investors will be key, in particular for scaled up, multiple council programmes.

Lessons learned

Lessons are being learnt throughout the programme, some can be applied during but many will inform how future SIBs can use sport as a tool for delivering council outcomes.

Key Stakeholder commitment

A key take-out is the need for all stakeholders to commit and participate fully and appropriately.

Contractually to pay for outcomes the council needs to ensure the delivery has an existing cost implication. It can do that by providing referrals rather than the provider securing participants.

Additionally those councils more actively involved in the governance are tending to be deliver better outcomes.

Council’s key responsibilities

Three key roles for a participating council to deliver an effective SIB offering value for money are:

  • provide the right participants, in the context of the outcomes framework, in this case young people already involved with council services
  • provide data to establish an accurate baseline position
  • share evidence (data) to prove achievements of outcomes.

Valuing outcomes

It is still difficult to value outcomes, crucial to providing the appropriate outcome payments. The HM Treasury Green Book has been helpful as has other historic data. However, it is an ongoing learning process.

An effective SIB needs good data to assess results against agreed outcomes. Securing the data required has at times been difficult for the VCS delivery partners, generally obtained from third party sources which is often a council department. Ensuring the commitment of the provision of data would be helpful for reducing administrative time and for ensuring good performance is reflected with appropriate outcome payments.

Local delivery expertise

An effective delivery partner with the expertise to not only deliver the required performance but to secure the data to measure results is key for effective delivery and performance management.

Programme management

The role of the intermediary coordinating with multiple councils plus so many other stakeholders is vital and challenging.

The programme management includes administering payments, collection of data, verifying and reporting on outcomes, and advising both councils and the delivery partners plus contract management. Substance developed this SIB from inception, securing the investor funding, identifying the delivery partners and securing the commitment of participating councils.

The programme at this scale could not have happened without them.

General learnings

For success all the key stakeholders need to commit appropriately otherwise the SIB will struggle to deliver value, the outcomes and a return to the social investor. Whether it can be scaled-up and replicated is not yet known.

The potential for sport and leisure provision to benefit from SIBs is unknown. At the very least it will help align local sports VCS delivery bodies with councils. Not only in delivering services but also being able to report their performance against identified outcomes.

There is still understandable concern from councils about the role that SIBs can play for delivering the outcomes required. There will certainly be some situations where they are not appropriate.

It will require both a level of cultural change and also more evidence that SIBs can work for councils in both an effective and efficient way. Ongoing central government support will be necessary, not least to cover intermediary costs.

Contact

Sangita Patel
Head of Programmes
Substance
sangita.patel@substance.net

Further resources

YMCA Out of Service Report

Golab Knowledge Bank Chances Case Study

Golab SIBS Briefing note for local authorities

Sport England New Investment method: Life chances