Social Impact Bond has reduced reoffending says Ministry of Justice
Re-conviction statistics released yesterday by the Ministry of Justice for the Social Impact Bond (SIB) model, based at Peterborough and Doncaster prisons have seen a drop in reoffending.
Both pilots are measuring reconviction rates in the 12 months following release from prison. The final results will not be available until 2014 but figures on how many people have been reconvicted in the six months after being released have been published part-way through the two pilot schemes.
The projects are believed to be the first in the world based on the Social Impact Bond (SIB) model, each using outside investors to fund courses that help offenders escape from the "revolving door of crime and prison".
Early figures suggest that the Peterborough social impact bond has led to a 6% reduction in recidivism (re-offending) over two corresponding two-year periods, against a 16% increase nationally.
There has been a more than 6% decline in the frequency of reconviction events per 100 prisoners at HM Peterborough in the period 2010-12 compared with the earlier two-year period 2008-10.
This compares to a 16% increase nationally from 2008-10 to 2010-12 - from 69 to 79 reconviction events per 100 offenders - and represents a relative decline of 23 % overall.
Nick O’Donohoe, Chief Executive of Big Society Capital said: “The value of social impact bonds is that they provide a method to bring social investment capital to deliver interventions which would otherwise not take place. The results from Peterborough, although not conclusive, suggest that the programme is having an impact on reducing recidivism.
This will encourage more government departments, local authorities and others to use social impact bonds as a way of funding innovative intervention programmes to meet a broad range of social challenges.”
The scheme, run by the social investment bank Social Finance, gives 3,000 short-term prisoners intensive help throughout their sentence and when they leave prison. Its goal is to reduce re-offending by at least 7.5% by the end of the pilot scheme in 2014. If the pilots are successful, those who have contributed £5m in Social Impact Bonds to pay for the activities will make a profit of up to £3m. If reoffending rates do not fall significantly, the ethical financiers will lose their cash.
Justice Secretary Chris Grayling said the Peterborough pilot "is the sort of approach I want to see rolled out to all offenders leaving prison."
He said: "It is madness that we release prisoners serving short sentences without any support in the community. These figures show a sizeable fall in reconvictions. They clearly demonstrate that with targeted support and help aimed at the right people at the right time we can divert more offenders from a return to crime."
Responding to pilot results, Andrew Neilson, director of campaigns at the Howard League for Penal Reform, said the figures should not be used as an excuse for blanket payment by results in probation services:
“Peterborough’s success is in part secured through philanthropic investment which funds a service over and above what the taxpayer already pays for. The Peterborough project also works voluntarily with short-sentenced prisoners who engage voluntarily with services on release.
That voluntary aspect is considered crucial to the project’s success in areas such as mentoring.
“By contrast, the government is proposing to privatise probation to reduce costs and short-sentenced prisoners will be compelled to receive support on release. Talk of payment for results may yet be a smokescreen for cheap and poor quality services that set people up to fail.”
Shadow prisons minister Jenny Chapman also cautioned against taking too much from the early results. She said: "It is mildly encouraging, some of the numbers show I think that the pilots are still at an early stage and that providers are still experimenting with what works best. I think we need to allow the pilots to run their course. We need to be very very cautious about rolling stuff out around the country before we have had a chance to make the right learning."
During a Parliamentary hearing last year, Grayling held up the Peterborough social impact bond scheme as a good model for private and voluntary sector partnership in prisoner rehabilitation and said the government’s plans would be a major opportunity for the social investment sector.
Ministers are planning to roll this out to all prisoners serving prison terms of less than 12 months under the Offender Rehabilitation Bill currently going through parliament. It is estimated that the new rehabilitation reforms will create a £5-20bn market.