The world's first social impact bond was a project aimed at reducing reoffending in Peterborough.
Criminal justice was an obvious choice for the first social impact bond. Experts across the country highlighted the paradox of short sentenced prisoners (those who are imprisoned for less than twelve months). Reoffending rates amongst this group were high; around 60% were convicted of at least one offence in the year after release. Each short sentenced prisoner who reoffended after release in 2007 was convicted, on average, of five further offences within the year. But no-one had statutory responsibility for this group of offenders once they were released prison. They left prison with typically £46 in their pocket, often with nowhere to live, no job to go to and no family waiting for them. An extremely high proportion left prison only to return a few weeks / months later.
Most of the clients on the Peterborough One Service had reoffended before, and for many, a spell in custody did not act as a deterrent. They had acute needs. A high proportion suffered from mental health and substance abuse challenges. Many had housing needs, didn’t have access to money and were in debt, and didn’t have the right skills to find employment.
In 2010 Social Finance raised £5 million from trusts and foundations to launch the first ever social impact bond to reduce reoffending among short-sentenced offenders leaving Peterborough prison. It funded the One Service – an umbrella organisation designed to respond to the complex needs of offenders to help them break the cycle of reoffending. Over five years of operation, support from the One Service was offered to two cohorts of 1,000 short-sentenced male prisoners for a period of up to 12 months post-release . Engagement was voluntary but the whole cohort was included in the measurement of the results.
The One Service was delivered by St Giles Trust, Ormiston Families, Sova, MIND, TTG Training, YMCA and John Laing Training, and managed by Social Finance. Over the course of its operation, it was an integral part of the Safer Peterborough Partnership3 and worked closely with the Police, Probation, Integrated Offender Management Teams, the Prison, the local authority, local statutory providers and the voluntary sector. It became an important part of the support landscape in Peterborough.
In July 2017, the Ministry of Justice announced that the Peterborough Social Impact Bond had reduced reoffending of short-sentenced offenders by 9% overall compared to a national control group. This exceeded the target of 7.5% set by the Ministry of Justice. As a result, the 17 investors in the Peterborough Social Impact Bond will receive a single payment representing their initial capital plus an amount that will represent a return of just over 3% per annum for the period of investment.