Using SROI for a Social Impact Bond

Social Return on Investment (SROI) and Social Impact Bonds (SIBs) are two ideas that are increasingly mentioned in the same breath. SROI is a measurement and accounting framework and SIBs are a way to contract and finance a service. Both require three common ingredients:

  • the quantification of one or more social outcomes for beneficiaries,
  • a valuation of these outcomes, and
  • an estimation of the cost of delivering these outcomes.

While not a necessary ingredient, SROI can contribute to the design, operation and evaluation of SIBs.

*NB the word ‘outcome’ is used here to represent a change in someone’s life – some readers (particularly from the US) may use the word ‘impact’ to mean the same

SIBs and SROI 1 Continue reading

Social impact bond (SIB) research questions

It seems that more and more students around the world are keen to do some research on social impact bonds. Great! But we can do better than ‘Do SIBs work?’ (try defining success first…) or ‘What’s the relationship between financial return and effect size?’ We don’t have the data for questions like this yet, but there are so many other wonderful questions we can be asking. There’s also a lot of data on twitter and in the media that could be used for interesting studies of stakeholder perception and reaction.

If you are a student researching SIBs and would like to be connected with other students, please use the contact form and include your university, level of study and research topic. I will connect you via email with other students around the world. If anyone else has more questions they’d like on this list, please pop them in the comment box.

Some questions

  • What are the effects of publicly announcing a SIB? How does timing affect whether a SIB gets agreed and how long it takes to agree?
  • What are the key characteristics of SIBs that have been announced by haven’t happened? How is this different from those that have happened? What has been the result of these projects e.g. funded by other means, directly commissioned etc.
  • Beyond risk and return: what are investors in social impact bonds looking for and attracted to? On what factors does the success of a SIB fund-raising effort rest? E.g. SVA great brochure, Westpac worked with existing customers, Social Finance builds closer relationships and confidence with investors.
  • Procurement – how do SIBs challenge the assumptions, processes of procurement? Comparison of jurisdictions. Implications for changes in law.
  • What do you procure for i.e. organisation, idea, full blown proposal or service – advantages and disadvantages from cases around the world.
  • Making responses public – e.g. Illinois for their request for information – does this impede or encourage innovation?
  • Appropriation risk (US only?) – how is this quantified, perceived, legislated against and what are the effects of that on a SIB? Conversely, how might the increased profile of a SIB affect appropriation risk?
  • Unstable governments – what are the implications for contractual partnerships in those countries? What’s the financial cost too?
  • Relationship between payment metric, measurement confidence and timing of payments – perhaps already in existing literature on performance-based contracting.
  • The role of guarantees – how does it change perception of what you’re doing by different stakeholders?
  • Who initiates and drives a SIB – how does this shape perceptions of risks and benefits by different stakeholders?

Strongs compressed


Alex Nicholls and I published a set of questions in our Case Study: The Peterborough Pilot Social Impact Bond (2013, published by Saïd Business School, University of Oxfordaround the often overlooked issue of legacy: what happens when the SIB is over. Not all of these are research questions, but studies that go some way to addressing these broader questions might be useful. The following is quoted directly from the paper.

One key question of a SIB is when and why should it end? Other key questions to consider are set out below from the perspective of each stakeholder typically involved in a SIB:


  • How to institutionalise innovation into future welfare programmes and in the wider social services market?
  • If early prevention is successful, how to maintain and fund preventative services after SIB ends? Do SIBs need to ‘rollover’ to produce sustainable change?
  • How can SIB outcomes data (likelihood, effect size, cost of delivery, value or savings to tax payer, related externalities/proxy outcomes) drive better commissioning across government?
  • How to achieve key outcomes post SIB?
  • How to continue to grow the social finance market to fund welfare services?
  • How to report on and share SIB learning and data more widely?
  • How to calculate savings from SIB interventions?


  • How to develop a secondary market exit?
  • How to develop a follow-on SIB investment?
  • How to adjust risk and return dynamically to the availability of new information from SIBs in the market?
  • How to tranche investments in a single SIB according to different risk and return profiles and different personal costs of capital?

Service Providers

  • How to ensure continuity of funding of increased capacity?
  • How to institutionalize SIB performance data?
  • How to build capacity to engage in future SIBs?
  • How to manage on-going collaborative relationships?
  • How to disseminate learning?
  • How to leave a community stronger when a service ends?


  • How to build a pipeline of SIB deals?
  • How to build capacity in providers so that they are stronger for having worked on a SIB?
  • How to continuously innovate?
  • Where to apply SIBs and develop other models that build upon SIB learning?
  • When are SIBs no longer necessary, if ever?
  • How to build a business model, given high transaction costs?
  • How better to segment the investor market to the real, rather than perceived, risk and return opportunities of SIBs?
  • How to manage the involvement of commercial, rather than purely social, investors in terms of expectations of high returns and the potential for risk dumping?

Service Users

  • How to ensure that a service gap does not arise for current participants and relevant future populations/cohorts?
  • How to avoid worse outcomes in the long term?
  • Will improved outcomes be sustained for those who participated in a SIB?

Breakdown of social impact bond investors in Australia

There are two social impact bonds in Australia that have raised investment and are delivering services. They have been called “Social Benefit Bonds (SBBs)” by the New South Wales Government, the state government that initiated them. They are the Newpin SBB and the Benevolent Society SBB and both of them work to strengthen families to ultimately reduce the need for children to be placed in care outside their homes. Investment for both deals was open to wholesale investors upon application. One parcel of investment in the Newpin SBB was transferred to a retail investor in August 2014, so is not shown on the chart. Also interesting to note is that the Benevolent Society, the charity delivering services for one SBB, has invested in the Newpin SBB, as well as in their own. A breakdown of investor types for each SBB is below.

Newpin investor breakdown(Source: Presentation by Ian Learmonth, 2013, p.14)

Bensoc investor breakdown(Source: KPMG Evaluation of the Joint Development Phase of the NSW Social Benefit Bonds Trial, 2014, p.30)

Social Impact Bond (SIB) UK v. world map

These maps and charts are accurate to the best of my knowledge as of November 2015. The images are slightly clearer if you click on them. Will try to keep them up to date, but feel free to give me a nudge if I fail to. I only count Social Impact Bonds that have been agreed by all parties and subsequently announced publicly. Happy to accept corrections!

[I’m currently occupied with other projects, so I recommend the Social Finance (UK) SIB database as the most reliable source of information and counter of SIBs.] 

SIBs launched

UK SIB map

SIB world mapThe references below are for the newer ones – the older ones are best explored through the UK Cabinet Office’s SIB Knowledge Box Case Studies which is a little out of date. Please note my bias towards government announcements over other parties’ – this reflects my personal interest rather than any objective assessment of the materials.

Saskatchewan – Canada

Saskatchewan Govt, 21 May 2014, New Home for Single Mothers Opens in Saskatoon; Funding First of its Kind in Canada

Birmingham – UK

Birmingham City Council – 25 November 2014 news release for service begun August 2014, Innovative approach to finding foster placements.

Augsberg -Germany

Access a PDF overview from the intermediary Juvat or see my blog on this SIB.

Chicago – USA

City of Chicago, 7 October 2014, Mayor Emanuel Announces Expansion of Pre-K to More Than 2,600 Chicago Public School Children

Cuyahoga – USA

Cuyahoga County, 3 December 2014, Nation’s First County-Level Pay for Success Program Aims to Reconnect Foster Children with Caregivers in Stable, Affordable Housing

Massachusetts – USA

Massachusetts Govt, 8 Dec 2014, Massachusetts Launches Pay for Success Initiative to Reduce Chronic Individual Homelessness

Fair Chance Fund – UK

Department for Communities and Local Government (DCLG), 9 Dec 2014, £23 million to help homeless turn around their lives (of which the Fair Chance Fund is £15 million) and specification for tender.

Social investment tax relief for homelessness social impact bonds by Third Sector 5 Feb 2015


EVPA, 6 Feb 2015, First Social Impact Bond launches in Portugal.

Youth Engagement Fund – UK

Department of Work and Pensions (DWP), 19 March 2015, New social impact bonds to support public services (there are two further social impact bonds announced in this press release that have not been fully developed yet – one will be delivered by Social Finance and one by Evidence-Based Social Investments).

Newcastle West CCG – UK

NHS Newcastle West Clinical Commissioning Group (NWCCG) ‘Ways to Wellness’ programme, 27 March 2015,
NHS in Newcastle commits £1.65m to improve long-term health conditions

Santa Clara County – US

County of Santa Clara, 13 August 2015, County of Santa Clara Launches California’s First “Pay for Success” Project

Tel Aviv – Israel

Social Finance Israel, 5 November 2015, Israel’s first Social Impact Bond Gets Underway

Social Investment – supplying and demanding what?

There’s a diagram/framework that keeps being used to describe the social investment market and it drives me mad! [I’m not going to point fingers, but its use is fairly widespread, to the point where some organisations use it to label their computer files…]supply and demand

This diagram assumes that your world revolves around money. When you see it, you are supposed to see a very logical display of: the supply of money; the demand for money; and the things that help these two connect.

But social finance is about more than money. It’s about people and changes in their lives. Social purpose organisations use the words ‘supply’ and ‘demand’ to talk about housing, food, services, blood…

As social finance/social investment/impact investing become more widely discussed and practised, our use of language is central to its development. Whatever our perspective, we need to use as little jargon as possible, communicating meaning effectively. We should ask people to explain what they mean, reduce our use of acronyms and assume that the world view of others is not our own.

The diagram above can be useful if we all understand what it means, for example:

investors and investments

It’s still a little money-centric, but it involves fewer assumptions. Is it clear enough?

Update July 2014

Until now, the bulk of social/impact investment reports have been written by investors, for investors, with a few written by policy makers trying to encourage investors. We’re just starting to see the emergence of publications on social/impact investing written for social purpose organisations. Big Lottery Fund has published Social Investment Explained, beautifully written David Floyd at Social Spider and Nick Temple at Social Enterprise UK, with support from Dan Gregory. It sets the benchmark for communication – its language and structure make it accessible to the organisations that are the basis of the existing and potential market.

Who do you need in government to get a SIB off the ground?

The social impact bonds (SIBs) so far agreed have displayed striking similarities in how they have been resourced. They have, at a minimum, featured two key roles: (1) the worker and (2) the senior champion. After speaking to most of the people responsible for SIBs agreed across the globe, it appears to me that these two roles are essential to driving SIB development all the way to signing a contract. These two roles are by no means sufficient to achieve a SIB contract, but they are necessary.

The worker

Somebody needs to take responsibility for doing the bulk of the work within the commissioning body. This involves briefing and negotiating with internal stakeholders, acting as secretariat for decision-making committees, collecting and analysing data analysis and liaising with external stakeholders. Imagine this person researching, writing and then physically chasing up decision documents and moving them from one desk to the next. They need the flexibility to work in this way, requiring different processes and a broader scope than those in established roles, and they need to be enough of a risk-taker to keep fighting the barriers to change. They need to enjoy the exploration of something unknown and be naturally inclined to include both internal and external stakeholders on the journey. They cannot do this work on top of their normal day job. People who have performed this role say:

  • “I almost created my own job”
  • “I was never part of the wider set-up – I was never a civil servant within the hierarchy.”
  • “I’m a bit of a square peg in a round hole”

The focus of developing a SIB is to get everyone to agree. Working towards an agreement necessarily involves a range of stakeholders as the project progresses in an iterative manner. Sometimes external service delivery providers, data custodians, other government agencies and investors have been involved in discussions before a government decision has been sought to work on development. Sometimes the government decision is made first and then work with stakeholders sets the direction of the development process. A SIB won’t happen because one person worked very hard, alone at their desk for a long time, they need to be saying, “I’m a networker – I connect with people and get things done”.

All successful SIBs have been driven by people who are passionate about the project, who won’t give up on finding solutions to new problems on a daily basis “it was about keeping the energy going – you can’t recreate that in someone that is not interested”. Several SIB development projects have stalled within public agencies due to the nominated SIB producer rationally declaring this mountain too high to climb.

The senior champion

Doing the legwork on a project that breaks new ground every day is too hard a task if the ‘worker’ also has to justify why they are creating work for everyone by pushing through change. A senior champion is crucial to validate the project and its resourcing, as well as compelling the necessary people at all levels across government to participate in discussions. Interviewees said things like, “My boss allowing me to have time to work on it was absolutely key” or “Having them state this was their pet project opened doors.” The senior champion is also responsible for political negotiation and positioning.

Informal connections may lead to successful formal ones

Vital SIB partnerships have been started in unlikely places. These include parties, running groups and corridors. This reflects the cross-sectoral nature of SIBs and that at the moment, they are built by alliances between first-movers, rather than through established communication channels.

Why are SIBs so difficult for government agencies to develop?

SIBs are difficult because they involve change. Public service agencies aren’t set up to change often – they are structured to maintain huge, vital service systems and every public servant is a dedicated cog in this machinery. SIBs ask for a whole lot of changes at once. The first is the measurement of outcomes and the valuation of those outcomes, such that payment may be made on the basis of measurement. That’s pretty new for most public agencies delivering services. SIBs also involve procurement practices that don’t specify ‘how’ services should be delivered, which can be contrary to traditional risk and quality management practices. Social impact bonds require new ways of thinking and decisions from public service units responsible for legal, finance, procurement, service design and data. And then all the external stakeholders are required to change the way they’ve been thinking and operating too!

The Harvard SIB Lab

The Harvard SIB Lab is a clever model because it recognises the difficulty public agencies have with resourcing SIB development. The Lab rewards successful applicants with someone dedicated to working on the project. This person may or may not take on the role of owner of the work, depending on the person and situation.

Department of Work and Pensions Innovation Fund

This suite of programs, which includes several SIBs, was developed differently to other SIBs so far. An allocation of £30m was made for an innovation fund to explore early intervention programs with young people. The next step was to think about how to distribute this funding and a decision made to tender for ten programs financed by social investment, some of which are SIBs. Public servants involved in this project seem to have been able to do so within their existing roles.

Did we already have social impact bonds?

SF SIB diagram(Social Finance, Towards a New Social Economy, 2010)

During a recent lecture on social impact bonds for the Saïd Business School’s Executive Education Impact Investing course, one of the students asked me, “Am I already part of a social impact bond?”

Social impact bonds (SIBs) are a new construct, with the term coined in 2008 and the concept piloted by Social Finance in Peterborough in 2010. But arrangements that fit our current understanding of SIBs already existed and continue to operate. For organisations involved in these arrangements, the benefits and challenges of identifying with the SIB phenomenon will determine whether or not they associate themselves with the term.

The lady who asked the question was running a non-profit organisation that had an outcomes-based contract with the Louisiana State Government to provide a service. A loan from a local finance institution helped to cover their working capital.

In order to examine whether she was indeed part of a SIB, we turned to the Cabinet Office definition.

SIB definition2

In this arrangement, the first two conditions were certainly met.

To determine whether the third was, we examined whether her creditor could be considered an investor. Her organisation existed for the purpose of providing the service and the contract accounted for the entirety of their service provision. The loan was made on the basis of this single contract with government. The lender was a legally separate entity from both the non-profit and the government. So it looked like her creditor could be considered an investor.

The fourth condition relates to the financial risk of the investor. Was the finance institution truly taking on any financial risk? Indeed, there were two distinct types of financial risk taken on in this situation. Firstly, there was the risk of non-performance; that the non-profit would fail to deliver the results that would trigger payment from government. Secondly, there was ‘appropriations risk’, the risk that government doesn’t approve the payment of a previously agreed contract [1]. If the non-profit, for either of these reasons, did not receive sufficient funds from the government to pay the loan, they would become insolvent and the finance institution would not have the loan repaid. So the fourth condition was met.

This non-profit was certainly part of a social impact bond as defined by the UK Cabinet Office, although none of the parties involved were using the term.

Other examples that may meet the definition of a SIB but not identify with the term include charter schools, which are independently run with three year contracts based on outcomes. If they establish a bridge loan fund to cover the cash flow gap, they may meet the four necessary criteria. These bridge loans are often used for capital infrastructure spend and the financial risk for the lender is sometimes rated, so certainly exists.


  1. When we assess SIBs and compile data or ‘track record’, it may be worth looking at these existing arrangements that fit the SIB definition.
  2. Organisations that are part of arrangements that fit the SIB definition might consider the benefits and challenges associated with the SIB label (e.g. will appropriation and other payment risks be reduced if the contract is ‘announced’ as a SIB).
  3. The Cabinet Office definition came after several SIBs had already been developed and was not written by the Social Finance visionaries responsible for articulating and implementing the original concept. Does it misrepresent the concept? If so, do we need to change the definition?

[1] Appropriations risk is a feature of the US governmental systems and is described by Steve Goldberg in his fourth SIB Trib: “Even if a state signs a valid contract calling for the payment of money, it doesn’t (indeed, can’t) pay what the contract says it owes unless and until the state adopts an appropriation law specifically and affirmatively authorizing the expenditure. What’s more, legislative authority to appropriate funds only lasts as long as the state’s constitution allows budgets to remain in force. In most states that’s one year, in some, two. So not only does a state have to enact budget legislation and then pass separate appropriations bills to legally spend any money, they can only do the latter within the one- to two-year time horizon of the former” (Goldberg, 2013).

Social Impact Bonds (SIBs): Who are the investors?


Commercial investors – are they what we’re after?

The Social Market Foundation recently produced a paper titled “Risky Business: Social Impact Bonds and public services” that looked at how to attract commercial investment into Social Impact Bonds. This assumption that commercial/mainstream investors are the ultimate goal for social investment is common, but is made without justification or exploration. Do we need investors who do not value social returns investing in welfare services? A good SIB should be structured so that anyone seeking to maximise their financial return will do so by maximising their social return, but let’s start by having a look at social investors we might have missed out on.

Job applicants and employees are increasingly valuing the corporate social responsibility policies of an organisation. Products that are produced in an ethical and sustainable manner are increasingly in demand, a demand which has not lessened in financial downturn like other premium products. Self-managed superannuation/pension funds are growing in size and number. Are there already a sufficient number of investors who are beginning to say “this is the way I want to invest my money”? Is there scope for allowing these social investors access SIB investments? Can we explore the potential of individual ‘person on the street’ or ‘mum and dad’ investors, often referred to as retail, investors?

Let’s take a look at how SIBs have been sold to investors so far…

Closed, private investments

The 17 investors in the Peterborough SIB and the majority of the other SIB investors in the UK have been found by intermediaries privately, rather than through a public call for investment. Most investors have been philanthropic foundations or individuals. The average investment for Peterborough is around £300,000.

In the US, Goldman Sachs has invested in both SIBs agreed so far. In the New York SIB, the $9.6m investment is part-guaranteed by Bloomberg Philanthropies. In the Salt Lake City SIB their $4.6m ‘loan’ is supported by a $2.4m subordinate ‘loan’ from J.B. Pritzker. (If the intervention fails, the loans will not be repaid.)

Open to wholesale investors

The two Social Benefit Bonds (SBBs) in Australia have raised funds on the open market, resulting in a greater number and range of investors. They have, however, restricted investment to ‘wholesale’ investors. A wholesale investor is a finance professional or a person who has an income of over AU$250,000 per annum for the last two years or assets in excess of AU$2.5 million. An offer restricted to wholesale investors is subject to lower regulatory requirements as it safeguards retail investors from buying products they do not sufficiently understand. The minimum investment for both SBBs was AU$50,000.

The Newpin SBB was launched first and raised AU$7m from 59 investors. When Social Ventures Australia surveyed investors, 80% of those who responded said they would have invested the money elsewhere if they hadn’t invested in the SBB. Investors included NG Super and Christian Super.

The Benevolent Society SBB raised AU$10m in two tranches. The $2.5m (no guarantee with up to 30% return) tranch involves 17 investors and the $7.5m (capital guaranteed with up to 10% return) tranch involves 40 investors including NRMA Motoring & Services, Australian Ethical Investments and Commonwealth Bank of Australia. Both NRMA and Australian Ethical expressed that while they thought it was a sound investment, this was not a purely commercial investment and the social return was important to them (Australian Financial Review, 5 October).

Smaller, involved investors

The investors in the SIB in Perth, Scotland have contributed between £5000 and £50,000 and are involved in the intervention. Perth YMCA recruited “12 investors – all local businesses or individuals – who were keen to be engaged directly in the delivery of the project, offering their own skills and resources as well as their investment” (Community Links, 2013). This idea of an involved investor in a SIB was unprecedented, but there are many aspects of it that are very attractive. Involved investors have the incentive and the ability to make a real effort to bring about successful outcomes for the young people they’re investing in. It would be interesting to see this model explored in further SIBs.

Service providers as investors

Service providers have invested in their own outcomes in the London Homelessness SIB and in the NSW Benevolent Society SBB. ROCA is also proposing that they invest in the SIB they’re developing in Massachusetts.

Retail investment through a financial advisor

The Allia ‘Future for Children Bond’ was the first opportunity for retail investors to become involved in a SIB. The Future for Children Bond was constructed of 78% loan to a social housing provider, 20% investment in the Essex SIB and 2% management fees. In order to safeguard against ill-informed investor mistakes, the Bond was an ‘advised’ product, which meant that financial advisors had to apply on behalf of investors. The minimum subscription was £15,000. The Bond failed to attract sufficient investment and was closed (NPC, 2013). The Essex SIB is fully funded and operating, with Social Finance, an intermediary, having raised sufficient private investment.

SIBs for the retail social investor?

There is understandable reluctance and legislation against making complex investment products open to individual, retail investors. But the safeguards are not always logical:

  1. Anyone can give as much as they like to any charity that will accept their donation without scrutiny. And yet if they stand a chance of getting this money back, it becomes an investment and they are subject to heavy regulatory barriers.
  2. To safeguard investors from making an investment mistake, we set them a minimum amount that they can risk. So they are not allowed to risk $100, but they are allowed to risk $100,000. Might it not be more sensible to safeguard retail investors by setting a maximum amount?
  3. Commercial investors find SIBs “a difficult investment because it is a small, illiquid product with no credit rating”  (Australian Financial Review, 5 October). They understand the way a certain number of products in the market work and to them a SIB is very new. But to retail investors, all investments are to some extent a minefield. Most people will never read all the fine print, but will learn new products and systems as they go. Very few who enter into a mortgage understand all the terms and conditions – a fact exploited and revealed in the sub-prime mortgage collapse of 2008. Crowdfunding is taking off. Retail investors may actually find the SIB less alien and confronting than their commercial counterparts.

Retail investment involves the writing of prospectus documents, which may involve higher transaction costs, but this cost should decrease as more are produced.

In August 2014, I became a retail investor in the Newpin SBB. An original wholesale investor transferred a parcel of investment to me. Australian restrictions around advertising investment opportunities to the open market cease to apply to later, private transfers. I hope that other retail investors will be able to join me in this and other SIB investments soon!

Social Impact Bonds: The relationship between investment size and government payouts

Two common misconceptions about social impact bonds are:

  1. That the amount the commissioner (Government) will need to payout can be calculated by taking the amount initially invested and adding a return.
  2. That the total cost of operations (running the intervention services) is the amount required from investors

Investors pay the entire cost of operations

The diagram below might spring to mind when we hear the word ‘bond’ (amounts below are illustrative only):

cost of operations

In this diagram, the investors pay £8m before the start of £8m worth of operations. After services finish there is a short delay for measurement after which the commissioner (Government) pays back the £8m + interest for investors + performance bonuses for providers of services, so let’s say £11m.

Now this is roughly what happens and some social impact bonds might be set up exactly like this. But it’s not very efficient and that much investment isn’t always necessary.

Investors provide working capital until commissioner payments flow

We need to remember that the role of investors in social impact bonds is to cover the working capital required until payments from the commissioner kick in. Social impact bonds use outcomes based contracts, a model of payment-by-results or pay-for-success. It may be that results or success are measured, and payments are made, well before operations finish.

Consider the situation shown below, where payments from the commissioner begin to be made halfway through operations.

cost of working capital

How much working capital do investors need to provide before the commissioner payments begin and are able to cover the cost of operations? Our £8m has become £4m. The shorter measurement period means earlier commissioner payments and lower investor capital requirements. It may also result in lower cost to the commissioner, although this it not portrayed in the diagram. On the other hand, it is important to note that a longer measurement period allows for a larger sample size and greater statistical confidence.


Social impact bonds can be structured in many different ways. Always assume that the timing and conditions of cash flows are deliberately constructed to balance the needs of stakeholders. Good design will simultaneously attempt to reduce investor risk and capital, reduce cost to the commissioner, minimise complexity and increase measurement confidence.

The Justice Data Lab – an overview

MoJ Data LabWhat is the Justice Data Lab?

The Justice Data Lab allows non-government organisations to compare the reoffending of the participants in their programmes with the reoffending of other similar ex-offenders. It “will allow them to understand their specific impact in reducing re-offending… providing easy access to high-quality re-offending information” (Ministry of Justice, Justice Data Lab User Journey p.10). There is no charge to organisations that use the Justice Data Lab.

The Justice Data Lab is a pilot run by the Ministry of Justice. The pilot began in April 2013. Each month, summaries of results and data are published, including Forest plots of all results so far.

Who might use it?

The Justice Data Lab can be used by “organisations that genuinely work with offenders” (Justice Data Lab User Journey p.11). One request will provide evidence of a programme’s effect on its service users’ reoffending. Several requests could compare services within an organisation or over time to answer more sophisticated questions about what is more effective.

This information could be used by non-government organisation for internal programme improvements, to report impact to stakeholders or to bid for contracts. It was set up at the time the Ministry of Justice’s Transforming Rehabilitation Programme was encouraging bids from voluntary and community sector organisations to deliver services to reduce reoffending.

What are the inputs?

Input data are required to identify the service users from a specific program and match them with a comparison group. Information on at least 60 service users is required and the organisation must have worked with the offender between 2002 and 2010.


  • Surname
  • Forename
  • Date of Birth
  • Gender

At least one of the following:

  • Index Date
  • Conviction Date
  • Intervention Start Date [note: feedback from applicants is that this is required]
  • Intervention End Date [note:feedback from applicants is that this is required]

Highly Desirable: PNC ID and/or Prison Number

Optional: User Reference Fields

What are the outputs?

The one year proven re‐offending rate –  defined as the proportion of offenders in a cohort who commit an offence in a one year follow‐up period which received a court conviction, caution, reprimand or warning during the one year follow‐up or in a further six month waiting period. The one year follow‐up period begins when offenders leave custody or start their probation sentence. A fictional example of the output provided by the Ministry of Justice is quoted below:

The analysis assessed the impact of the Granville Literacy Project (GLP) on re‐ offending. The one year proven re‐offending rate for 72 offenders on the GLP was 35%, compared with 41% for a matched control group of similar offenders. The best estimate for the reduction in re‐offending is 6 percentage points, and we can be confident that the reduction in re‐offending is between 2 and 10 percentage points.
What you can say: The evidence indicates that the GLP reduced re‐offending by between 2 and 10 percentage points.

Applicants should note the following requirement: “an organisation requesting data through the Justice Data Lab must publish the final report, in full, on the organisation’s website within four months of receiving the final report.”

I’d be very interested in the opinions of applicants on this requirement. Is it an issue? Does it create perverse incentives?

What are the implications?

The implications are huge. Prior to the Justice Data Lab it was very difficult for non-government organisations to establish a comparison group against which to measure their effect. Evaluations of effect are expensive and thus prohibitive, particularly for smaller organisations. In addition, the differences in their methods and definitions meant that evidence was more difficult to interpret and compare.

This is exactly the type of evidence that developers of social impact bonds find so difficult to establish and will be essential to constructing social impact bonds to deliver  Transforming Rehabilitation services. It is a measure of outcome, which is desirable, but often more difficult to quantify than input (e.g. how much money went into the programme), activity (e.g. what services were delivered) or output (e.g. how many people completed the programme).

New Philanthropy Capital (NPC) were involved in designing the Justice Data Lab and their Data for Impact Manager, Tracey Gyateng, is specifically thinking about applications to other policy areas.

How is it going?

See my November 2014 post on information coming out of the Justice Data Lab.

Also note the announcement of an Employment Data Lab by NPC and the Department of Work and Pensions.

More information

Information on the Justice Data Lab home page includes links to a series of useful documents:

  • User journey document – information on what the justice data lab is, and how to use its services.
  • Data upload template – use this template to supply data to the justice data lab. Further descriptions of the variables requested are given, and there are key areas which must be filled in on the specific activities of the organisation in relation to offenders.
  • Methodology paper – this document gives details of the specific methodology used by justice data lab to generate the analysis
  • Privacy impact assessment – this is a detailed analysis of how an organisations’ data will be protected at all stages of a request to the justice data lab
  • Example report template – two examples of a standard report, completed for two fictional organisations showing what will be provided.

Criminal justice service providers might also benefit from getting involved in the Improving Your Evidence project, a partnership between Clinks, NPC and Project Oracle. The project will produce resources and support, so follow the link and let them know what would be of most use. The page also links to an introduction to the Justice Data Lab – a useful explanation of the service.

The bulk of this post has been copied directly from the Ministry of Justice documents listed above. It is intended to act as a summary of these documents for quick digestion by potential users of the Justice Data Lab. The author is not affiliated with the Ministry of Justice and does not claim to represent them.