Impact Finance Bulletin: social outcomes partnerships are back in fashion, but they're not for everyone

For the past few months, social outcomes partnerships have experienced fresh momentum in the UK. After years of trying to boost interest from policymakers, organisations including Better Society Capital were delighted last summer when the UK government finally showed it had bought into the idea at scale, with the launch of the £500m Better Futures Fund, a social outcomes fund to support vulnerable children. (If you need a refresher about what social outcomes partnerships are, check out our Impact 101 explainer here.) Meanwhile, the final evaluation of the Better Futures Fund’s smaller-scale predecessor, the Life Chances Fund, demonstrated the benefits of the approach, while experts highlighted how social outcomes partnerships could drive systems-level change. 

And at our NatWest SE100 awards this month, the Social Investment Pioneer prize went to social enterprise the Skill Mill, for putting together a record-breaking social outcomes partnership involving 22 local authorities, £2m of social investment that will enable the delivery of a £10m programme. The Skill Mill provides paid employment opportunities for ex-offenders aged between 16 and 18 to deliver environment management, and has experience of using such partnerships successfully.

I had the pleasure of interviewing managing director David Parks at the awards ceremony in Manchester, when he shared the challenges of building such partnerships, but also the opportunities it brought for both local authorities and the communities they serve (you can watch the conversation here). “There are lots of ups and downs, but you have to keep going, because you have… a huge opportunity to turn around the lives of some of those young people who otherwise just wouldn't get that chance,” he said.

But social outcomes partnerships – also known as social impact bonds – have come under criticism over the years for being too complex and costly as a result. And the recent enthusiasm for them in the UK shouldn’t obscure the fact that there is still no consensus over them. I heard a prominent UK foundation leader strongly opposing them recently, arguing more straightforward solutions were available. Internationally, I remember an Asian impact finance expert being surprised at me mentioning social impact bonds a few months ago – referring to them as an almost defunct, failed experiment. In the UK, the £500m Better Futures Fund, which has a 10-year life span, means social outcomes partnerships are here to stay – but in one particular sector and for a particular type of provider. Whether they will expand beyond that is yet to be seen. 

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On our radar

Next month I’ll be in Brussels to attend Impact Europe’s Impact Days. If you’re planning to be there too – or happen to be in the Belgian capital on 9-10 June and want to chat about impact finance – feel free to reach out.

Under the radar...

Talking about the EU, we are also expecting the publication of a study on “impact-driven businesses” in the bloc in the next few weeks – which should also shed some light on investment in such enterprises. The research was commissioned by DG GROW (the directorate-general for internal market, industry, entrepreneurship and SMEs) to inform “possible directions for future EU-level action”. The findings will be interesting – especially in light of the big backlash over a piece of research on the UK impact economy published by NPC in the winter. 

(Have some off-the-record leads or tips you'd like to share? Let's have a chat.)

Top image: at this year's SE100 awards ceremony in Manchester, David Parks of the Skill Mill explained how social outcomes partneships enabled to scale the social enterprise's impact.