The report, launched in London last week explores the ways in which social investment might begin to close the attainment gap between disadvantaged pupils and the national average achievement.
The research follows the rise of the education participation age from 16 to 18, and the increase in pupil premium, which now totals £1.875bn in 2013-14, opening new opportunities for social organisations to grow.
As Rhian Johns, director of policy and communications at the Private Equity Foundation said, “Our hope is that this report will be a catalyst for action – bringing together organisations with proven interventions, commissioners, investors and social intermediaries."
The problem now
The gap in educational attainment between pupils from different social backgrounds is worrying: in 2011 only 35% of pupils qualifying for free school meals (FSM) achieved 5 A*-C grades at GCSE compared to 62% of non-FSM pupils.
The number of young people failing to achieve qualifications at school has a huge impact on society over time. The University of York estimates that the lifetime public spend for a young person who is not in education, employment, or training totals £56,301, with a national aggregate of around £32bn.
The report claims that the pupil premium is not being used effectively for the UK’s poorest pupils, and calls for social investment to develop and deliver high-impact programmes which increase the number of children reaching floor-targets.
As Will Norman, director of research at The Young Foundation
, said, “Rather than plugging the hole in school budgets, the pupil premium should be used to close the attainment gap through utilising social enterprises that are offering alternative and effective ways to engage and support disadvantaged young people."
The need for social investment
The report argues that social investment in educational programmes would harness entrepreneurship, foster innovation, and sustain the long-term growth which delivers financial returns as well as educational benefits.
It claims there are three main areas to benefit from a focus on social investment which possess the efficacy, marketability and investability to succeed.
The first of these is the recently expanded post-16 vocational education sector. The rise in education participation age creates a demand for 50,000-100,000 new places in Britain, opening space for social enterprises to set up and be paid in arrears according to the numbers of pupils attending.
Another area identified stems from central government through pay-by-results methods (PbR) such as Social Impact Bonds (SIBs). Results are determined after the event and payment moves from advance to arrears, creating a need for financing and opening opportunities for the social investor.
Finally, social investment could prove fruitful in services provided directly to schools, with a special focus on the pupil premium. Well evidenced educational intervention approaches exist within social enterprises already serving schools. The premium offers helpful funding and could be used in cooperation with grant funders to bring smaller organisations to scale.
The report further explicates steps which should be taken to foster social investment in education, including a need for the government to play an active role as ‘validator of quality’, offering successful enterprises awards, alongside a call for more research into hard-to-reach 16-year-olds by other actors in the market.
Yet the necessary reforms for success are realistic. As the report says, “we have specifically selected opportunities which we think will succeed against the existing policy environment."
Projects already succeeding
Projects involving social investment in education can already be seen taking effect. The report offers several case studies, among them “Catch Up”, a programme offering struggling users help with literacy and numeracy.
The project provides training to teaching assistants who deliver the intervention to pupils through two 15-minutes sessions per week. Its educational impact is clear, with research showing the literacy programme achieves the equivalent of 19 months’ progress from a seven-month intervention.
The economic benefits are equally apparent: not only is the programme’s easy implementation attractive, but assistants are trained over the space of only four-half days and for a one off fee of £350 per trainee. With the pupil premium at £900 per disadvantaged student, and one assistant able to aid many students, the intervention is effective and financially viable.
“Catch Up” is 100% funded through trading revenues, and its cost-effective model enables it to charge schools at a price which ensures full cost recovery.
A promising future
For social investors, education is a promising area – it has social need, evidence and knowledge about how to make an impact, demand for the finance that social investors can supply, and innovative entrepreneurs. The three main areas outlined above have much potential to offer both financial and social returns.
As the report concludes, “There are valuable initiatives going on… there is a great deal to do in order to make this sector work, but many reasons to believe that it will get there."
The full report can be found here.