World’s first social impact bond achieved goals and repaid investors
The world’s first social impact bond cut reoffending rates and repaid its investors, according to the social investment not-for-profit Social Finance.
But social finance experts have warned that the success of the One Service in Peterborough did not mean that similar projects could be replicated elsewhere, and the 3 per cent return received by investors could be achieved through less risky methods.
SIBs work by attracting investment to fund projects, often run by charities and social enterprises, and reimbursing and rewarding the investors if the project is successful.
The Peterborough SIB, which was set up in 2010 with £5m from trusts and foundations, helped to fund the One Service in the city, an organisation that works to prevent prisoners from reoffending.
Seven years on, the service has cut reoffending rates by 9 per cent, 1.5 percentage points above the target set by the Ministry of Justice.