The Social Impact Bond at Peterborough Prison

A pilot scheme running at Peterborough Prison aims to tackle reoffending by incentivising private organisations to run programmes by setting targets for income based on their success rates. Broadcast at 07:15 in the Peterborough Breakfast Show hosted by Paul Stainton on BBC Radio Cambridgeshire.

STAINTON: Now it’s been announced that Peterborough Prison will pilot the UK’s first payment by results scheme. The Social Impact Bond involves paying private groups to cut reoffending. The Justice Secretrary Ken Clarke says the idea may be used in prisons across the country. (TAPE)
CLARKE: Some things are happening now about the work proposed to start soon on Social Impact Bonds in Peterborough Prison. We’ve already arranged to pay the social investors there if and only if they reduce the reoffending of short-sentenced prisoners. But eventually our aim is to expand payment by results to other groups of offenders. (LIVE)
STAINTON: Well the six year scheme will be funded by the Government and will focus on prisoners serving less than twelve months. If the scheme cuts reoffending by seven and a half per cent or more investors receive a share of the long term savings. Toby Eccles is from Social Finance. they’re the investment firm behind the scheme. (TAPE)
ECCLES: Payment by results has always been something that every government’s been interested in. Their difficulty has been that charitable social organisations that they would like to work with, who are doing some fantastic work on the ground, can’t afford to wait two or three or four years before they get paid. So we have found investors, socially motivated, interested in solving these problems, to put the money in up front to pay for those services and then get repaid, and potentially with an investment return. (LIVE)
STAINTON: Well with us this morning is Tom Jefford Chair of the Cambridgeshire Criminal Justice Board. Morning Tom.
JEFFORD: Good morning.
STAINTON: So let me get this straight. This is private companies rehabilitating offenders and trying to make a profit. Is that a good idea?
JEFFORD: Well I think you could see it in that way. But we would like to see it as investment being attracted into the criminal justice system that’s going to have a direct benefit to short-sentenced prisoners who are likely to reoffend at a much lower rate, and also of course to the community, because if there are fewer people committing further offences, that’s got to be good news for everyone.
STAINTON: It is, but I just worry when private companies get involved and try and make a profit. Because they’re in it for money, aren’t they? These private companies are going to try and make a profit out of this, out of our prison system.
JEFFORD: Well in fact the money that’s come for the Social Impact Bond has not been raised from private companies, it’s been raised from trust funds and philanthropic organisations, so …
STAINTON: But this is private companies rehabilitating offenders. This is the main plan here, isn’t it?
JEFFORD: No I say again it’s money that’s coming from organisations that have got philanthropic aims, that they want to invest in the community in any case. But rather than have funds that sit in the stock market the purpose of the Bond is to create a financial mechanism whereby the investment is made and the return is then paid based on the performance targets being achieved.
STAINTON: Right. So these people are moving their money from the stock market into prisons for the benefit of the community. Very benevolent of them.
JEFFORD: Well there is a real policy behind it in that they will get a return on the money that they’re investing, but this is money that otherwise would be locked away and we wouldn’t see. So if we are going to attract a substantial amount of money into the community to prevent short-sentenced prisoners from reoffending, then I can only see that as being a positive.
STAINTON: Has it worked anywhere else?
JEFFORD: Peterborough Prison is going to be the first place to have Social Impact Bonds. So this is very new.
STAINTON: Has it not worked in Europe anywhere, or …
JEFFORD: No this is the first time that this has been tried out in this particular way. What we do know is that if you supervise short-sentenced prisoners, if you offer them increased opportunities to access work, you overcome some of their barriers about accomodation, and you offer the level of personal support to those prisoners who would normally reeceive a probation-type level of supervision, they are far less likely to reoffend. What’s happened is that short-sentenced prisoners are released from prison with very little support if any support at all, and they very quickly return to offending and then go back into prison. So by creating investment that is going to work with this set of people, we would hope that they are going to reoffend at a much less rate.
STAINTON: The main thing behind this for the Conservative Government and the Coalition Government really is they can’t afford to keep all these people in prison. Money is tight. They’ve got to find ways of emptying the prisons, and this is a way of doing that, isn’t it?
JEFFORD: Well undoubtedly. The prison population has expanded enormously since the Justice Secretary was last in charge of prisons, in effect doubled over that period of time, and prison remains a very expensive option. However the point of the criminal justice system is not only to punish but also to rehabilitate, and so if we’re going to reduce the numbers of people who are committing further offences, having been released from prison, then we will eventually begin to reduce the prison population. But I think it’s a complicated message, in that many adults need to be in prison for serious violent or sexual offences, in order to protect the public. But there’s a very high proportion of people in the prison estate who can actually be successfully managed in the community, and put on the path to success and an offence-free future.
STAINTON: It’s a bit rich from the Conservatives, telling us our prisons are unacceptably overcrowded. They started all this didn’t they, with Michaell Howard’s “prison works” speech.
JEFFORD: Well I think that that “prison works” speech has dominated public policy for a long period of time, and I think that in the public imagination prison is often seen as the only part of the criminal justice system that has anything to offer to reduce offending and to protect the public. In fact there’s a huge amount that can be done, and is being done within the community to get prisoners to the right place, and to take them away from drugs and alcohol and the sort of offending lifestyles that are so damaging both to them and to the communities in which they live.
STAINTON: And if it works of course we all benefit don’t we?
JEFFORD; Oh absolutely. Yes. I think everyone has a vested interest in fewer crimes being committed. You and I live in a community. I’m sure our aspirations are to live in a community that has as few offences and as few offenders as possible.
STAINTON: Why have you chosen Peterborough to start this, to launch this, to test this?
JEFFORD: Peterborough is a prison which is privately run. It’s a very well run prison. I know the Director there. It’s a very positive environment. They have good industrial training within the prison, and I think that they were very ready to sign up to be a part of this. They’re an outward looking organisation. They’ve been very successful with the prisoners that they’ve had so far, and I think it’s probably a bit of luck for us that we’ve been able to see this local investment being a national pilot.
STAINTON: And if it works, can you see it being rolled out across the country?
JEFFORD: I think that we will see a very rapid expansion of Social Impact Bonds. I think people are very interested in the concept and the idea. And to be frank, the only way in which we are likely to get new public investment is to look to the money that’s held by voluntary organisations and philanthropic trusts and other organisations. Because certainly the Government is not going to be finding new capital or new investment to invest in public services.
STAINTON: Tom, thank you for explaining all that for us this morning. Much appreciated. Quite complicated but effectively it’s payment by results. If we cut reoffending at Peterborough Prison by over seven and a half per cent people make money out of it. Less people reoffend, less people go back to prison, more people are rehabilitated. We’re all happy, aren’t we?

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