This case study details the journey that London Borough of Bexley Council has been on in the design and tender launch of a new homelessness social impact bond (SIB) service. The technical support that we commissioned using the Housing Adviser Programme grant funding has been integral to this journey and offered the SIB expertise for devising the service outcomes, developing the operational model and advising on procurement. The £1.6 million SIB contract was awarded in September.
Bexley is experiencing the housing pressures that resonate across London and the UK with house prices rising sharply and the private rented sector market growing considerably. Whilst historically, Bexley has offered the lowest rental prices in London, a growing population is contributing to driving prices up and decreasing the availability of affordable supply. The main cause of homelessness in Bexley in 2016/17 was the loss of private rented accommodation.
A series of welfare reforms and a stark decline in social housing has also resulted in a rapid growth in the number of homeless people in temporary accommodation.
We sought to improve the housing service offer for single homeless people in temporary accommodation to reduce growing numbers. We did this by enabling single people in temporary accommodation to move into more permanent housing in the private rented sector and ensure they have holistic, wrap-around support to sustain their housing long-term.
We secured funding from the Life Chances Fund, delivered on behalf of the Department for Digital, Culture, Media and Sport (DCMS) by the Big Lottery which aims to help those who face the most significant barriers in society through payment by results contracts. SIB contracts involve social investors and contribute to increasing social innovation in the public sector to deliver better outcomes. They represent an opportunity to reform public services by offering an innovative model that brings together the public, private and voluntary sectors.
We are one of a number of pilots across the country that is testing the model. It focuses on achieving specified outcomes in housing sustainment, involving multi-disciplinary partnerships across housing, employment and health and wellbeing to achieve the ultimate goal of living independently.
The Housing Adviser Programme grant enabled us to commission the expert technical advisers – Social Finance – to help us develop the social impact bond and work with the social investors.
The greatest impact is for vulnerable homeless individuals who have historically fallen through service gaps, to help them access higher quality and more permanent housing than temporary accomodation, in addition to receiving health, financial and wellbeing support. The service and service outcomes were deliberately designed to be flexible in order to enable a person-centred approach that can be tailored to individuals’ own needs.
The main impacts for the council are:
- cost avoidance and greater value for money by reducing the number of people in temporary accommodation and paying only for successful outcomes
- transferring financial risk to a social investor who pays for the up-front costs of the service
- increasing the supply of private rented housing in and out of borough
- building positive partnerships with our local voluntary and community sector organisations.
Sustaining the approach
Opening Doors SIB enables us to channel costs that we already incur through temporary accomodation provision into achieving outcomes for a group of people that have received little support. It therefore provides value for money and builds the evidence base upon which to make future commissioning decisions.
There is potential to scale this model up to other Bexley homelessness cohorts, other local authorities and other service areas and industries.
We have learned key lessons across the three phases of the project so far:
- feasibility and funding application to the Life Chances Fund
- service design
- Cross-departmental engagement with finance, legal, procurement and senior colleagues as well as member engagement is crucial at the early stages.
- Understanding of service users underpinned the design of the service and the outcomes and gave confidence to the market that the service can be delivered.
- The importance of co-design with VCSOs through market engagement events (x3) which also allowed us to test our work.
- The fewer and more simple the payment outcomes, the better.
- The council, as commissioners needed to be pro-active in building consortia by providing networking opportunities.
- Occasional co-location with our housing advisers (Social Finance) both at the council and social finance offices fostered internal capacity building and mutual learning.