The Peterborough prison social impact bond attracted investment of £5m from 17 charitable foundations to finance six criminal justice charities to work intensively with three cohorts of 1,000 short-sentence prisoners released from HM Prison Peterborough, the first between September 2010 and May 2012.
One purpose was to demonstrate what many such charities could assert from experience – that providing such intensive help to a category of offenders who have not received it in the past would bring down their rate of reoffending.
Another purpose was to show that it was possible to attract investors to this kind of project who are prepared to qualify for repayment and a dividend from public funds only if an agreed figure was exceeded.
Figures released this week show that the mentoring and support provided by the charities resulted in a fall in reconvictions in the first Peterborough cohort of 8.4 per cent when compared to a larger national group with similar characteristics. This is encouraging, and provides useful data for future policy-making.
The minimum figure, however, was 10 per cent, which means that the investors do not qualify for repayment. The target for the first and second cohort combined is 7.5 per cent, and indications are that this will be exceeded and investors will be paid back in 2016. Social Finance Limited, which coordinates the Peterborough and other SIBs, says that three of them have already paid outcome payments to investors.
The reaction to the Peterborough figures by all the organisations involved is highly positive, despite the failure to meet the minimum level of improvement for the first cohort. "The prospect of getting our investment back with a return is an exciting indication that thorough-going resettlement can create enough cashable savings to make a new system affordable when done properly," said Julian Corner of LankellyChase Foundation, one of the investors.
The wider context is that, earlier this year, the government cancelled the third cohort of the Peterborough SIB, citing the planned countrywide introduction of large-scale contracts for implementing Transforming Rehabilitation, the Ministry of Justice programme intended to harness private and voluntary sector expertise to provide Peterborough-style mentoring and support for the first time to all those sentenced to less than a year. This decision shook many working in this area.
Transforming Rehabilitation will be similar to the Peterborough SIB in the sense that it will operate a payment-by-results model and provide support to a group of offenders who have not in the past received it. But it will be entirely different in the sense that it will be run as traditional public service contracts, without any social investors.
The overall impression is that everyone concerned is determined to talk up the Peterborough SIB in public, despite qualified success and difficulties over statistics and measurement. In private, some of those involved are much more downbeat about the prospects for replicating what might prove to be a one-off experiment.
Perhaps the biggest questions about SIBs generally is whether they will ever fulfil the initial intention of attracting a wide range of investors – not just forward-thinking foundations willing to take risks for the sake of innovation and social progress.