How to Deliver Public Services ‘on the cheap’ – Britain’s Export to the World

This piece is mainly intended for readers outside the UK, especially for trade unions, and those now facing outsourcing and external contracting pressures, especially from ‘Social Enterprises’ funded by Social Investment, Social Impact Bonds and private funding.

Britain is now the world leader in exporting mechanisms, techniques and templates to fund and deliver public services ‘on the cheap’ – using private money and external contractors – with a babble of Social Enterprises and other organisations tripping round the world as global ambassadors in poverty and misery, with expenses paid by the UK Coalition Government and British Council

Social Investment and Social Impact Bonds
  • Social Investment is the provision and use of public or private repayable finance to generate social as well as financial returns. Social Investment takes a variety of forms such as loans, equity and bonds, including Social Impact Bonds. Social investors may not be able to get their money back in future with a return on their investment. Grants, donations and funds which will not be repaid by definition are not Social Investment.
  • A Social Impact Bond (SIB) means a multi-year contract in which central or local government or the commissioning agent agrees to pay a proportion of savings resulting from a positive social outcome from various private investments through ‘social sector’ organisations, including private companies. If the SIB programme is successful and delivers positive social outcomes, the demand for these services will drop and a proportion of the cost or “cashable” savings made may be paid to SIB investors. The best example is the UK Government’s Peterborough Social Impact Bond pilot, started by New Labour in 2010 for reducing reoffending. If a SIB is unsuccessful, the investor gets nothing back.
  • Private For Profit Delivery. A major feature of most Social Investment, Social Impact Bonds and Social Investment Financial Intermediary organisations is that most make no distinction between genuinely “social” structures and private for profit companies which distribute dividends to shareholders. So ‘Social Enterprises’ may be democratically constructed local groups or profit making companies.

All this means less certainty that public services will get funded or delivered. Inevitably it means that service quality usually deteriorates. But for central and local government, all this saves public money.

Rather than the UK Government fighting austerity and poverty, it has turned these techniques into a major export opportunity!

Outsourcing, Minimum Wage and Zero Hours Contracts

UK public services are being outsourced at a rapid rate. In her Public Services Industry Review 2008 (1) Deanne Julius (previously a Director of Serco) wrote:

“The PSI (Public Services Industry) in the UK is the most developed in the world and is second in size only to that of the US. In 2007/8 its revenues totalled £79bn, gen-erating £45bn in value added and employing over 1.2mn people.” …In terms of value added the PSI is significantly larger than ‘Food, beverages and tobacco’ (£23bn in 2006), ‘Communication’ (£28bn), ‘Electricity, gas and water supply’ (£32bn) and ‘Hotels and restaurants’ (£36bn)”.

In Open Access: Delivering Quality and Value in our Public Services (2) for the Confederation of British Industry in September 2012, Oxford Economics wrote:

“..not just in the un-open proportion of the markets researched but in the unopened proportion of the estimated £278bn of public services spending which could practicably be more opened up to independent provision”.

Added together, these projections mean that 60% of total UK public revenue expenditure may be outsourced, mostly to the private sector.

Once public service delivery is outsourced to the private and ‘third sector’ contractors, payment of the National Minimum Wage (3) of £6.31 ($10.73) an hour and Zero Hours Contracts (4) – so that 1.4mn UK employees have no guaranteed working hours – become the norm.

Huckfield is an active member of the Unite the Union Edinburgh Not for Profit Branch. Every branch meeting is dominated by members’ and their representatives’ ongoing battles to ensure that at least the Minimum Wage is paid and that terms and conditions of employment are maintained when services are contracted out.

Every UK major trade union is involved in countless struggles with these same issues following contracting out by central and local government, the National Health Service and private deliverers of public services.

This is the UK Government’s example to the world of how public services can be delivered on the cheap and bypassing trade unions. Sadly, as shown below, paid for by the British Government, many Social Enterprise and Third Sector organisations are lending support to all of this.

Neoliberalism is a Deliberate Construct

This is not the place to extend the academic or philosophical discourse on the meaning of neoliberalism. Suffice it to say here that neoliberalism is not the dismantling of the state. It is a deliberate construction of the state. In the Socio Economic Review 2011, Volume 9, Issue 1, Bruno Amable on Morals and Politics in the Ideology of Neoliberalism (5) writes:

(page 23) “This theme of social assistance in exchange for something from the individual has been revisited by the so-called “modern left” and led to a critique of the “passive welfare state” as well as an attempt to “justify” a certain degree of inequality in society. The “Third Way” critique of the social democratic conception of welfare policy by the various strands of the “modern left” (Anthony Giddens in Beyond Left and Right: The Future of Radical Politics (6) in 1994) is not substantially different from the standard neoliberal critique and insists on the moral content of the “active” welfare state”

Laying the foundations for neoliberalism began in the United States. In the UK, New Labour and the Cameron Government have built on these foundations.

President Ronald Reagan in October 1981 set up a Taskforce on Private Sector Intiatives (7) to report on:

“Methods of developing, supporting and promoting private sector leadership and responsibility for meeting public needs”

His call to “demand more of ourselves” connected logically to the politics of limited government – requiring a strong civil society. President George Bush’s Inauguration Speech (8) on Friday 20 January 1989 continued in the same vein:

“I have spoken of a Thousand Points of Light, of all the community organizations that are spread like stars throughout the Nation, doing good. We will work hand in hand, encouraging, sometimes leading, sometimes being led, rewarding. We will work on this in the White House, in the Cabinet agencies. I will go to the people and the programs that are the brighter points of light, and I’ll ask every member of my government to become involved”.

From 1997 till 2010, Tony Blair’s and Gordon Brown’s New Labour Governments laid down more neoliberal foundations when they moved the delivery of public service away from the public sector. After less than a year in Office, influenced by Anthony Giddens’ “Third Way” (9) Tony Blair’s Fabian pamphlet New Politics for the New Century (10) in September 1998 set the seal on all of this:

“Whether in education, health, social work, crime prevention or the care of children, “enabling” government strengthens civil society rather than weakening it, and helps families and communities improve their own performance … the state, voluntary sector and individuals working together. New Labour’s task is to strengthen the range and quality of such partnerships”

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New Labour and the Cameron Government Develop Social Investment

Gordon Brown moved stealthily towards private funding of externally contracted delivery of public services when in April 2000 he set up the Enterprising Communities: Wealth Beyond Welfare: the Social Investment Task Force (11) under venture capitalist Sir Ronald Cohen, with this remit:

“To set out how entrepreneurial practices can be applied to obtain higher social and financial returns from social investment, to harness new talents and skills to address economic regeneration and to unleash new sources of private and institutional investment. In addition, the Task Force should explore innovative roles that the voluntary sector, businesses and Government could play as partners in this area.”

New Labour and the current Cameron Government’s legitimation of philanthropic and private lending and equity investment in private and Third Sector public service delivery is based on the April 2010 Final Report to Gordon Brown as Prime Minister of Sir Ronald Cohen’s Social Investment Task Force: Social Investment: Ten Years On (12) Chapter Five says:

“If 5% of the £86.1bn estimated to be invested in ISAs (Individual Savings Accounts) were also directed to Social Investment, this would generate a flow of an additional £4.3bn. Taken together, these four sources – philanthropic foundations, institutionally managed assets, grant funding and individual savings accounts – could generate £14.2bn for Social Investment”

Pages 18 and 19 of the Social Investment: Ten Years On Final Report includes a glowing recommendation for Social Impact Bonds:

“The SIB involves a multi-year contract according to which government agrees to pay a proportion of the saving resulting from a positive social outcome of private investment through social sector organisations (for example if there is a drop in the re-offending rate). On the strength of this contract, funds are raised from a range of social investors. …. If the programmes are successful and deliver positive social outcomes, the demand for acute services will drop and a proportion of the cost savings made will be paid out to SIB investors

“By providing an aligned social and financial return, there is potential for the SIB to unlock an unprecedented flow of social investment for preventative intervention… Ultimately, SIBs could become a new social asset class in their own right, comparable to microfinance, enabling a flow of investment from the capital markets to resolve social issues across the world”

The Cameron Government’s White Paper, February 2011 Growing the Social Investment Market (13) in Chapter Two simply echoes Sir Ronald Cohen’s Social Investment: Ten Years On (12) Final Report to New Labour in April 2010.

“But the opportunity is large. UK charitable investment and endowment assets alone account for nearly £95bn. If just 5% of these assets, 0.5% of institutionally managed assets and 5% of retail investments in UK ISAs were attracted to Social Investment, that would unlock around £10bn of new finance capacity”

Funded by the Government, there is also a Social Stock Exchange in London, which promotes Social Investment and Social Impact Bonds.

“Points of Light” presaged President Bush’s constructing neoliberalism in the United States. Based on these and New Labour’s further foundations in Social Investment: Ten Years On, Prime Minister Cameron is promoting Social Investment, including Social Impact Bonds, as a major British export

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Voluntary and Community Organisations, Social Enterprise and the Third Sector

Many Voluntary and Community Organisations, Social Enterprises and the wider Third Sector have been recruited by New Labour and the Cameron Governments to assist in spreading these messages about financing, outsourcing and external contracting for delivery. As shown below, they effortlessly promote Government sponsored initiatives for Social Investment and Social Impact Bonds for funding delivery of public services by non government organisations and private for profit companies.

In his excellent book Rediscovering Voluntary Action: The Beat of a Different Drum, (14) Colin Rochester accurately describes how in England the National Council for Voluntary Organisations and other national Third Sector organisations were quickly converted to the New Labour Government’s cause following the recommendation of the Deakin Commission on the Future of the Voluntary Sector for a Compact with central government in 1996. They signed up to what the New Labour Government wanted – as long as the Government picked up the tab.

(p52)“The invention of the voluntary sector has indeed created a policy field as well as developing a policy sub-elite made up of those who lead the intermediary bodies and those who act for government at central and local level, together with some ‘useful’ fellow-travelling intellectuals. Their achievement has been to gain widespread acceptance of one narrative about the role and function of voluntary organisations in public and social policy and one view of organisational effectiveness and efficiency”.

(page 127)“Other players have included the chief executives of individual agencies and their representative body; researchers, organisational consultants and trainers; and those who have crossed the boundary from the voluntary sector to work in national or local government. Individually and in combination they have been shaped by and helped to shape the forces that have moulded the voluntary sector as it appears today”.

This accurately describes the process whereby Social Enterprise UK, UK Third Sector infrastructure organisations and Social Investment Financial Intermediary Organisations have been captured for the cause of Social Investment and Social Impact Bonds under New Labour and the Cameron Government.

All this shows how in the UK, Voluntary and Community Organisations, followed by national Social Enterprise bodies, have forfeited any independence through their recruitment in the Government’s cause of ‘cheap’ public service delivery

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Social Enterprise rolls out Britain’s New Colonialism

Funded by the Cabinet Office and other Government Departments, Social Enterprise and Third Sector Organisations are now helping to deliver this UK Government cost cutting agenda round the world.

The Downing Street Policy Unit, the Cabinet Office and the British Council – with their tame retinue of national Third Sector Infrastructure Organisations, Social Investment Financial Intermediaries and others on their payroll – have taken Social Investment – Britain’s New Colonialism – on a global tour. On Social Enterprise, the British Council (15) says:

“Social Enterprises employ business approaches to address social and environmental problems and enhance their communities. They combine the entrepreneurial approaches and trading methods of the private sector with the social mission and public values of the voluntary and public sector.

“Launched in 2009 and rolled out in 14 countries, our Global Social Enterprise programme provides social entrepreneurs, NGO practitioners, and community leaders with skills training and access to UK expertise.”

The British Council Social Enterprise programme is running in China, Croatia, Georgia, Indonesia, Japan, Malaysia, Myanmar, Philippines, Serbia, South Korea, Thailand, Turkey, Ukraine and Vietnam – all countries with undeveloped welfare systems. Through Social Enterprise, Social Investment and Social Impact Bonds, the British Council offers these countries a low cost route without trade unions for public service delivery.British Council Indonesia UK Social Enterprise Study Tour Notes May 27-30 2014 (16) represent a good example of how it all works in practice. Though labelled a Study Tour, it becomes obvious from the composition of the delegation that it is promoting Social Investment and the British Government’s cost-cutting agenda for public service delivery.

UnLtd, a Social Investment Financial Intermediary, and one of the British Council’s Indonesia delegation, now presses for ‘Social Enterprise’ to include private for profit companies which distribute dividends to their shareholders. UnLtd calls them “Trust Engines”. This is from Who do you Trust in Social Enterprise? (17) by UnLtd’s Head of Ventures in the Guardian newspaper on Friday 26 April 2014:

“This year’s Big Venture Challenge – UnLtd’s programme for the most ambitious, growth-oriented early stage ventures – saw 48% of all applications (and 63% of all shortlisted candidates) coming from organisations registered as private companies limited by share (CLS)” (18)

“But also, as a support provider for social entrepreneurs, we need to understand how all the organisations we work with can access finance, markets and additional support in order to achieve their social missions. Without the goodwill of other stakeholders in the sector, the progress of these privately owned, profit-distributing, social purpose organisations could be hampered.

Alongside all this, British Council’s Social Investment Platform (19) offers:

“Prizes include equity investment, bond investment, interest free or low interest loans and funding for social franchising, as well as mentoring and capacity building”

The British Council says “We support the development of Social Enterprise and Social Investment in the UK and around the world to help build a more inclusive, sustainable and prosperous future for all”. In reality this means shifting public service delivery away from central and local government to Third and private sector providers, where there are few trade unions, a posse of volunteers and a growing band of multinationals’ being persuaded this is part of their Corporate Social Responsibility.

So, for countries without a developed welfare system, a combination of Social Enterprises paying the Minimum Wage, the Corporate Social Responsibility of private corporations and volunteers can fill the gaps in public services. Huckfield sympathises with the recipients of these services.

For any unbelievers, this is Starbucks working with the British Council in the Phillipines: (20)

“As a brand we are very choosy about our partners. We chose the British Council because it is an international organisation that shares our values, particularly around inclusivity.” (Zarah Perez, Head of Global Responsibility, Starbucks Philippines)

The British Council and the Future of Social Enterprise

Readers outside the UK should know that the Chair of British Council, Sir Vernon Ellis, is also Chair of OneMedical Care (21), which proclaims:

“Our dedicated team of experienced professionals work with commissioners, local GP practices, community groups and patients to design and deliver services which are accessible and make a positive impact on the health and wellbeing of communities”.

This is not at all suggesting any impropriety or irregularity. But it is interesting that UK Government Secretaries for Health Andrew Lansley and Jeremy Hunt have used similar terms during the processs of their dismantling the NHS. No wonder that the British Council in What will Social Enterprise look like in Europe by 2020 (22) says on page 4:

“And as the funding pendulum swings away from grants towards loans and venture capital, priorities start to be assessed based on which social outcomes can be profitable, monetised or marketised. Social issues where it’s difficult to put a financial value on the outcomes will become much harder to fund”.

And concludes on page 7:

“There may well not be a recognisable ‘Social Enterprise sector’ by 2020. Certainly any attempts to confine social enterprise to specific legal structures or models of governance will have ceased”.

Though the UK Government, the British Council and their tame posse of Social Enterprise and Third Sector disciples are trying to provide cheap public service delivery with a veneer of respectability, this British Council paper gives the game away about the direction of travel.

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Growing American Doubts

As shown above, Social Investment and Social Impact Bonds are mechanisms under which cheap public services can be funded through private funding – all part of Britain’s big export package. Despite Prime Minister Cameron’s G8 Social Impact Investment Forum (23) at Lough Earne, Northern Ireland in June 2013 and the launch of the Social Investment Taskforce in Washington DC (24) in October 2013, various North American organisations are resisting Britain’s New Colonialism.

The Center for Law and Social Policy (CLASP) on Friday 07 March 2014 produced Social Impact Bonds: Overview and Considerations (25) with a very detailed review of Social Impact Bonds concludes:

(page 20)“Given the additional costs involved in a SIB compared with direct contracting (whether fee-for-service or outcome-based), the case has not been made for taking funding away from existing programs. In addition, SIBs should expand services to individuals who are not already being served, rather than replacing existing services. This is important because intermediaries may stop providing services if they are not going to be able to achieve the performance targets. This is only acceptable if the program is serving people who would not otherwise have received services”.

The American Federation of State, County and Municipal Employees (AFSCME) is a major trade union in the United States. It represents approximately 1.5mn workers and in June 2014 published Race to the Bottom:How Outsourcing Public Services Rewards Corporations and Punishes the Middle Class (26) which said:

(page 4)“Unfortunately, when these services are outsourced to private companies, the subsequent contracted positions offer lower wages, reduced benefits, and little or no retirement security. Too many times, these positions turn into poverty-level jobs because companies pay workers low wages and provide little or no benefits in an effort to reduce their own operating costs. These jobs that provide vital public services are paid for with taxpayer dollars, yet the men and women working for contractors are provided with wages that do not allow them to support their families”.

McKinsey’s From Potential to Action: Bringing Social Impact Bonds to the US (27) also concluded in May 2012:

(p10)This highlights a crucial point: SIBs are an expensive way to finance the scaling up of preventive programs. A SIB’s “premium” is justified if conventional options aren’t working, or if the SIB helps government, philanthropy, and other social sector actors align their priorities and play their roles more effectively and efficiently.

(page 57)“As we have observed throughout this report, SIBs are a comparatively expensive way to scale a program, and for that reason not every proven program should necessarily be scaled through a SIB. This means SIBs must be carefully deployed to serve a bigger purpose”

These various reports across the United States show growing doubts about Social Investment and the Social Impact Bond process.

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US Senate Budget Committee Hearings

On Thursday 01 May 2014, resistance to UK Government propaganda reached a high point during US Senate Budget Committee hearings. Huckfield has previously testified before similar hearings and can verify that Hearings in the House and US Senate are not tame affairs.

On Thursday 01 May 2014, the US Senate Budget Committee Government Performance Task Force Hearing: Investing in What Works: Exploring Social Impact Bonds (28) began its investigations into Social Impact Bonds. Non Profit Quarterly on Wednesday 07 May 2014 commented Social Impact Bonds Not Well Received at Senate Budget Hearing: (29)

“For a hearing that was undoubtedly intended to highlight the Social Impact Bond phenomenon, it didn’t quite turn out that way. It would seem that the promoters of SIBs have to do a better job of getting past their own promotional rhetoric and explain the substance to answer the challenges posed by Senators King and Whitehouse, not to mention McKay, the analyst who conducted the Maryland analysis”

Independent Senator Angus King from Maine commented:

“I think this is an admission that government can’t do what it’s supposed to do…. This just strikes me as…it’s a fancy way of contracting out. And as I say, I don’t believe government contracts very well…and the government is always going to be outfoxed on the contracts, in my experience.”

Evaluating Social Impact Bonds as a New Reentry Financing Mechanism: A Case Study on Reentry Programming in Maryland (30) January 2013 by the Department of Legislative Services Office of Policy Analysis

“A reentry program financed using a SIB would not produce sufficient benefits to justify the operational costs or risks of engaging in this form of high-stakes contracting”.

“The Department of Public Safety and Correctional Services (DPSCS) should continue to directly finance and operate reentry programs while pursuing other organizational and policy changes likely to have greater impact while posing less risk than a SIB financed program”

Based on this, Mark Fisher, from the Maryland House of Delegates, concluded at the Hearing in a paper on Social Impact Bonds Maryland HB 517 (28):

“In conclusion, SIBs are well-intended, but they unnecessarily bloat bureaucracies. Moreover, they have the potential of leading to Crony Capitalism, and as the Maryland Department of Legislative Services concluded, they do not save money”.

Kyle McKay, Analyst from the Texas Legislative Budget Board, told the same Hearing in a Statement on Social Impact Bonds: (31)

(page 6)“In short, it is my personal opinion that Social Impact Bonds are expensive and risky. They may also distract governments from a more comprehensive, sustainable approach to improving public policy. Across a variety of policy areas, we have learned that measuring outcomes and using monetary payments to incentivise behavior change is difficult and often produces mixed results. There is no evidence to suggest that simply throwing investors into the fray will resolve the ongoing limitations and problems. Instead, they may very well exacerbate the challenges

The publication of the US Senate Committee Report from these hearings is awaited. But in the meantime this Hearing certainly casts doubts on Britain’s big export. Once more it shows increasing North American resistance to Britain’s New Colonialism

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UK Government Tactical Retreat and a New Subsidy called “Blended Capital”

Though the UK Government, the Cabinet Office, Big Society Capital and various Social Investment supporters are aware of these various criticisms, they are still not deterred. On Wednesday 14 May 2014, Third Sector carried a story “Social Investment’ is not a silver bullet for the sector” (32)

“Harvey McGrath, Chair of Big Society Capital, tells parliamentary meeting that the sector should instead embrace ‘blended capital’, a combination of grant funding and Social Investment”

“Harvey McGrath, chair of the Social Investment wholesaler Big Society Capital, has said that Social Investment is not a “silver bullet” for the voluntary sector because it is not a form of funding that all sector organisations will be able to access”.

“McGrath warned that Social Investment was still in an early stage of its development. “While it’s growing quite rapidly, it’s still relatively small in terms of the numbers,” he said.

“McGrath said that it would be a significant move for the sector to embrace blended capital – this uses a combination of grant funding and social investment – and agreed that the two sources of funding had been looked at too separately by the sector up to now”.

What this really means is that in the face of increasing criticisms and opposition to Social Investment and Social Impact Bonds both in the UK and abroad, the Cabinet Office, Big Society Capital and Britain’s Big Lottery are now seriously subsidising the Social Impact Bond process.

Examples from the guidance below show that their aim is to de risk the Social Impact Bond process through Big Lottery’s up front part funding returns to investors.

Social Investment gets a Subsidy from the UK National Lottery

The National Lottery Act 2006 (33) formed what is now called Britain’s Big Lottery and updated the terms on which Lottery funding could be used. As Politics Today (34) explained:

“The National Lottery Distributors have agreed a common interpretation on additionality and to report annually on additionality”.

But the National Lottery Act 2006 doesn’t include the Lottery’s funding returns to private investors

To illustrate the Government’s Social Impact Bond subsidy the Coalition’s programmes now feature Big Lottery and Cabinet Office funding side by side. The Big Lottery guidance in Questions and Answers – Commissioning Better Outcomes and the Social Outcomes Fund (35) gives the game away:

  • “In exceptional circumstances, you may be able to make a case for development funding over and above this £150k limit. In these cases any application will require our prior approval.

  • “Development grants can be used to purchase technical support including, but not limited to: identifying savings (to the commissioner and other organisations) and their value; estimating cashability of savings and identifying ways of realising them; defining the cohort and referral pathway; refining and pricing of outcomes; developing metrics; and developing the structure of the SIB”

  • We will only contribute a minority proportion of outcomes payments, and expect the average contribution to be around 20% of the total outcomes payments”

Though the timing may only coincide with the US Senate Budget Committee Hearings on Social Impact Bonds above, faced with increasing criticism and implementation difficulties, the Cabinet Office and Big Lottery have decided to subsidise and de-risk Social Impact Bonds.

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The Strange Death of the Peterborough Social Impact Bond

The Peterborough Social Impact Bond, (36) started under New Labour in 2010, is the UK Government’s global showcase.

But this national flagship Social Impact Bond has now suddenly been cancelled.

The Phase 2 Report from the Payment by Results Social Impact Bond Pilot at HMP Peterborough (37) by Emma Disley and Jennifer Rubin at RAND Europe in May 2014 is comprehensive about the relative security and consistency of funding provided to those delivering the Peterborough SIB:

(page 5) “SIB funding was perceived to be more flexible than traditional sources. Interviewees reported that decisions about spending SIB funds could be made quickly and with fewer restrictions than traditional funding for similar interventions. There are, for example, fewer procurement restrictions and no requirements for SIB funds to be spent within a specified time frame (such as a financial year).

(page 8) “Service providers are not normally paid by results and do not bear risk in a SIB. Under a SIB, several providers can deliver services which aim to improve outcomes.”

Alongside all of this, readers outside the UK should know that the UK Government is rushing through a reducing reoffending national Payment by Results Social Investment programme called Transforming Rehabilitation – which requires those who bid for a contract to take the risk and provide their own cash up front – which may lead to cutting corners, or an incentive to “cherry pick”.

Many of the confirmed “30 Potential Bidding Entities” are already private sector Work Programme Prime Contractors – the Department of Work and Pensions’ big employability scheme, which is not a brilliant success!

Transforming Rehabilitation will operate on a similar basis to the Work Programme, with problems of cash flow, risks of ‘cherry picking’ and smaller providers’ being used as “bid candy”. As an indication of funding complexity, the consultancy Rocket Science has produced a “Transforming Rehabilitation Contract Cruncher(38) to enable calculations for how much they might receive:

“Rocket Science and ACEVO, with funding from Cabinet Office, have produced a free to use tool, the TR Contract Cruncher, designed to help potential Transforming Rehabilitation tier two and tier three subcontractors assess offers from Tier one bidders, and plan for the future, by assessing cashflow projections and risk, and comparing different payment and performance offers from potential Tier one providers.

“The tool will help you to work out unit costs, assess and compare different performance and payment offers, alongside provisional client volumes. This will enable you to consider annual expenditure and income, annual profit and loss and cumulative cashflow”.

It is difficult to avoid the conclusion that the Peterborough Social Impact Bond flagship, despite its proclaimed successes, looks very expensive and subsidised alongside the much cheaper and riskier Transforming Rehabilitation programme. .

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So the Cameron Government will continue with Social Impact Bonds and Social Investment – aided and abetted by national Third Sector Organisations on its payroll. Despite gathering criticism in the United States and elsewhere, the British Council will continue spreading its gospel round the world on how to deliver low cost public services.

And in these postings Huckfield will continue telling readers in the UK and abroad what’s going on. Neoliberalism likes to proceed by stealth. If they proceed further, and don’t suffer the same fate as the Peterborough flagship, Social Investment and Social Impact Bonds will only proceed noisily.



(1) JULIUS, D., 2008. Public Services Industry Review. PUB 8742/0.2k/07/08/NP. URN 08/1074. London u: Department for Business Innovation and Skills.

(2) OXFORD ECONOMICS, 2012. Open Access: Delivering Quality and Value in our Public Ser-vices. London: Confederation of British Industry.

(3) GOV UK 2014. “One million set to benefit from National Minimum Wage rise to £6.50”

(4) OFFICE FOR NATIONAL STATISTICS. April 20 2014. “Analysis of Employee Contracts that do not Guarantee a Minimum Number of Hours”

(5) AMABLE, BRUNO 2011 Morals and Politics in the ideology of Neoliberalism. Socio-Economic Review, 2011 Volume 9, Issue 1, pp 3-30

(6) GIDDENS, ANTHONY 1994 Beyond Left and Right: The Future of Radical Politics. Stanford University Press

(7) REAGAN, RONALD 1981. Executive Order 12329 – President’s Task Force on Private Sector Initiatives October 14, 1981.

(8) BUSH GEORGE 1989 Inaugural Address January 20 1989 The American Presidency Project

(9) GIDDENS, ANTHONY 1998 The Third Way: The Renewal of Social Democracy. Polity Press, Cambridge.

(10) BLAIR, T., 1998. The Third Way: New Politics for the New Century. 1998. London: Fabian Society.

(11) COHEN, R. and SOCIAL INVESTMENT TASK FORCE, 2000. Enterprising Communities: Wealth Beyond Welfare: Report to the Chancellor of the Exchequer from the Social Investment Task Force. London: Social Investment Task Force.

(12) COHEN, R. and SOCIAL INVESTMENT TASK FORCE, 2010. Social Investment Ten Years On: Final Report of the Social Investment Task Force. London: Social Investment Task Force.

(13) CABINET OFFICE, 2011. Growing the Social Investment Market: A Vision and Strategy. Introduction and Executive Summary. London: Cabinet Office February 2011.

(14) ROCHESTER, COLIN 2013 Rediscovering Voluntary Action: The Beat of a Different Drum. Palgrave MacMillan Basingstoke

(15) BRITISH COUNCIL 2014 Social Enterprise

(16) I-GENIUS 2014 British Council Indonesia UK Social Enterprise Study Tour May 27-20 2014

(17) LEHNER, DAN Guardian Friday 26 April 2014. “Who do you Trust in Social Enterprise?

(18) UNLTD, 2013. Big Venture Challenge. London: Big Venture Challenge.

(19) BRITISH COUNCIL 2014 Social Investment Platform. China

(20) BRITISH COUNCIL 2014 Starbucks Philippines.


(22) INGRAM-HILL, S., WOODMAN, P. and BENIANS, S., 2013. What will Social Enterprise look like in Europe by 2020? Manchester: British Council.

(23) GOV UK Social Impact Investment Taskforce June 2013

(24) GOV UK First meeting for Social Impact Investment Taskforce October 2 2013

(25) CENTER FOR LAW AND SOCIAL POLICY (CLASP) Social Impact Bonds: Overview and Considerations March 07 2014

(26) AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES (AFSCME) Race to the Bottom: How Outsourcing Public Services Rewards Corporations and Punishes the Middle Class

(27) MCKINSEY and COMPANY From Potential to Action: Bringing Social Impact Bonds to the US

(28) US SENATE BUDGET COMMITTEE. Government Performance Task Force Hearing: Investing in What Works: Exploring Social Impact Bonds

(29) NON PROFIT QUARTERLY 2014 Social Impact Bonds not well received at Senate Budget Hearint May 07 2014

(30) FISHER, MARK 2014 Social Impact Bonds – Maryland HB 517 Government Performance Task Force U.S. Senate Committee on the Budget May 1, 2014

(31) MCKAY, KYLE. 2014 Statement on Social Impact Bonds: Government Performance Task Force U.S. Senate Committee on the Budget May 1, 2014

(32) BIRKWOOD, SUSANNAH 2014 ‘Social investment ‘is not a silver bullet for the sector’ Third Sector Online. Wednesday 14 May 2014

(33) NATIONAL LOTTERY ACT 2006. Legislation.Gov.UK

(34) POLITICS TODAY 2006 The National Lottery Act Monday 11 July 2006

(35) BIG LOTTERY. 2014. Questions and Answers – Commissioning Better Outcomes and the Social Outcomes Fund

(36) DISLEY, EMMA, RUBIN, JENNIFER ET AL 2011 Lessons learned from the planning and early implementation of the Social Impact Bond at HMP Peterborough RAND Europe May 2011

(37) DISLEY, EMMA, RUBIN, JENNIFER ET AL 2014 Phase 2 report from the payment by results Social Impact Bond pilot at HMP Peterborough May 2014

(38) ROCKET SCIENCE 2014 Tranforming Rehabilitation Contract Cruncher

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