1. Bridges – supporting public contracts
NPC
October 2016
Innovative investments that make a difference

2. Introduction to Bridges
Bridges’ structure options
SIB business cases

3. Bridges takes a Multi-Fund Approach…
Bridges Sustainable Growth Funds
Bridges Property Funds
Bridges Social Sector Funds
Bridges Impact+
Bridges Charitable Trust

4. What does Bridges Ventures do?
We invest money on behalf of investors, to generate social impact and financial returns
Example investors
Part-ownership
Mission-lock
Types of investments
Example beneficiaries
Improved life prospects for young people
Cost savings for Local Authorities
Funds of Funds
Outcomes Contracts
Bridges Ventures’ Investment Funds
Charitable Foundations
Improved care quality for domestic care users
Better job conditions for domestic carers
Social Enterprises
Improved economy and jobs in deprived areas
Better education services
High impact commercial businesses
Local Authority Pension Funds
Increased supply of high quality care homes
Reduced environmental impact of buildings
High impact commercial property
Financial returns
Impact reporting

5. Create significant direct impact on beneficiaries’ lives
What were our original targets? (as stated when the Fund was raised)
Play a catalytic role in evolution of PbR market, generating both direct and systemic impact
Inputs
SIB Fund Activity
Outputs
Outcomes
Impact
Provide working capital to social sector organisations to meet the cashflow requirements of PbR contracts
Bring expertise to deals to reduce risk and cost of contract delivery
Deliver services to most disadvantaged members of society more efficiently and effectively by SSOs than existing private or public sector organisations
Improved outcomes for disadvantaged individuals, families and communities in a range of areas, including:
Education, training & employment
Housing & essential needs
Personal & social wellbeing
Direct
Impact
Create significant direct impact on beneficiaries’ lives
Mobilise capital from impact investors to establish specialist Results Fund
Systemic
Impact
Share learnings and best practice with all engaged with development of PbR market
Assist in development of exemplar deal structures attractive to commissioners, providers and investors
Demonstrate ability of SSOs to deliver improved outcomes against a range of indicators
Create innovative delivery models that can be scaled and replicated
Commissioners increasingly use SSOs to deliver PbR contracts
New investors & capital attracted into market
Shape the market and catalyse further development of PbR contracts for SSOs

6. Improved lives vs status quo
What were our original targets? (as stated when the Fund was raised)
Play a catalytic role in evolution of PbR market, generating both direct and systemic impact
Inputs
Activity
Outputs
Outcomes
Impact
Investment
£15-20m
Support
2.5 FTE
Better services delivered
15 projects
10,000
beneficiaries
Improved outcomes
£50m outcomes
7 policy areas
Outcomes worth £100m
Direct
Impact
Improved lives vs status quo
Raise the SIB Fund
(£15-20m)
Share learnings
1 report
16 workshops
Develop structures
[tbd]
Capacity built in SSOs
[tbd]
Structures replicated
More SIB providers
20-30 SSOs
More SIB contracts
9 new
commissioners
More SIB investors
£20m co-invest
Systemic
Impact
Grow the SIB market

7. 13 outcomes projects addressing four main social policy areas
19 impact-driven organisations delivering programmes for 24 local and national commissioners
Independence & Employment
Children’s Services
Homelessness
Health – Long Term Conditions

8. Won a second SIB in 2015 for a further 1,500 yp
Independence and Employment – 5 outcomes projects
3 launched in 2012, with follow-on contracts for the two most successful providers in 2015
Achieved Now
Target, end 2019
# young people
School engagement outcomes
Education outcomes
Employment outcomes
7,000
11,000
6,930
12,067
5,676
10,374
424
699
Career Connect video can be viewed here
Teens and Toddlers video can be viewed here
2012
2012
2012
Achieved Now
Target, end 2019
Total outcome payments made by DWP
Total value of outcomes to DWP
£9m
£14m
683 young people
4,383 young people
1,317 young people
£16m
£20m
3.5 years
3.5 years
3.5 years
Greater Manchester
East London
Merseyside
Won a second SIB in 2015, co-commissioned by local authorities, for a further 4,000 yp
Won a second SIB in 2015 for a further 1,500 yp

9. 5 years of delivery, 8 years including tracking period
Family Therapy – 1 outcomes project
1 launched in 2012
Achieved Now
Target, end 2020
# families treated
% families still together
# care days avoided
200
380
80%
65%
23,000
105,000
Action for Children MST video can be viewed here
2012
Achieved Now
Target, end 2019
Total outcome payments made by Essex
Total costs avoided by Essex
Future cost avoidance unlocked
£5m
£8m
£4m
£20m
380 families
5 years of delivery, 8 years including tracking period
£10m
£20m
Essex

10. Therapeutic Foster Care – 2 outcomes projects
2 launched in 2014
Achieved Now
Target, end 2023
# young people placed
# Weeks of therapeutic foster care provided 31
160
689
5,616
Birmingham Team Parenting video can be viewed here
2012
2012
Achieved Now
Target, end 2023
Total outcome payments made by local authorities
Total cost savings achieved by Local Authorities
£1m
£26m
62 young people
98 young people
£2m
£46m
8 years
6 years
Manchester
Birmingham, Cardiff

11. Supported adoption – 1 outcomes project
1 launched in 2013, with 6 delivery providers, serving 10 local authorities
Achieved Now
Target, end 2018
# children registered
# children successfully placed 26 26 14 21
Family Futures “Toby” family finding video can be viewed here
2013
Achieved Now
Target, end 2018
Total outcome payments made by Local Authorities and Cabinet Office
Total cost savings achieved by Local Authorities to date
Total future savings unlocked
£1m
£1.3m
£1m
£2m
26 young people on scheme
£10m
£13m
3 years of family finding, 2 year monitoring period
Currently on hold, pending national Adoption regionalisation

12. Greater Manchester, Greenwich
Tackling Youth Homelessness – 3 outcomes projects
3 launched in 2015
Achieved Now
Target, end 2017
# young people
# in stable accommodation
Entry into education
Entry into employment
914
914
620
680
314
431
129
240
2015
2015
2015
Achieved Now
Target, end 2019
Total outcome payments made by DCLG
Total value of outcomes to DCLG
£3m
£6m
348 yp
215 yp
352yp
£3m
£7m
3.5 years
3.5 years
3.5 years
West Yorkshire
Greater Manchester, Greenwich
West Midlands

13. Health and Social Care – 1 outcomes project
1 launched in 2015
Achieved Now
Target, end 2021
# patients registered
Average wellbeing star improvement
% of patients managing their condition better
Level of saving from secondary care
933
10,047
3.95
1.1
62%
n/a
n/a
15%
Ways to Wellness video can be viewed here
2015
Achieved Now
Target, end 2021
Total outcome payments made by CCG + Cabinet Office + Big Lottery Fund
Total cost savings achieved by CCG -
£8m
10,047 patients
7 years
n/a
£5m*
* CCG paying out their expected short-term cashable savings, and programme payments are topped up by the Cabinet Office and Lottery to recognise longer term savings to Newcastle CCG, and wider social impact for other departments (e.g. DWP, NHS England, etc)

14. Improved lives vs status quo
What were our original targets? (as stated when the Fund was raised)
Play a catalytic role in evolution of PbR market, generating both direct and systemic impact
Inputs
Activity
Outputs
Outcomes
Impact
Investment
£15-20m
Support
2.5 FTE
Better services delivered
15 projects
10,000
beneficiaries
Improved outcomes
£50m outcomes
7 policy areas
Outcomes worth £100m
Direct
Impact
Improved lives vs status quo
Raise the SIB Fund
(£15-20m)
Share learnings
1 report
16 workshops
Develop structures
[tbd]
Capacity built in SSOs
[tbd]
Structures replicated
More SIB providers
20-30 SSOs
More SIB contracts
9 new
commissioners
More SIB investors
£20m co-invest
Systemic
Impact
Grow the SIB market

15. Our main impact targets are on track to be delivered
We track and publish impact across all of our 13 SIBs

16. We are working with 19 impact-driven organisations
All of which have learnt how to deliver PBR contracts
Fund target
20-30 19 15 11 4 3

17. We are working with 24 local and national government bodies
We are trying to share learning and good practice across government 24 14
Fund target 9 7 2 1

18. Introduction to Bridges
Bridges’ structure options
SIB business cases

19. Structure Options
Bridges offers a variety of solutions for providers and commissioners
Working with
Service Providers
Working with
Commissioners
Who are we working with?
Bridges Ventures engagement
Work with commissioners to procure providers
Work with providers to bid into open procurement
Core capital
Project Finance
Social Impact Bond
Co-commissioning
Advisory service
Bridges directly finances service provider to grow through a variety of contracts
Bridges provides at-risk financing to a service provider to deliver a specific contract
Bridges creates new SPV, which holds main PbR contract, and sub-contracts to service provider
Bridges and commissioner create new Prime Contractor, which procures service providers competitively
No new entities. Bridges advisory team contracted by commissioner to provide support
Typical entity structure
Typical financing
Investor loan to service provider, with interest rate tied to success
Bridges pays revenue to service provider and receives share of PbR payments directly from commissioner
SPV pays revenue to service provider and receives all PbR payments directly from commissioner
Prime contractor pays revenue to service providers and receives PbR payments directly from commissioner
Bridges not involved in financing. Provider raises working capital from other investors if needed
Bridges takes seat on board of service provider
Governance group (Bridges + provider) formed to manage specific project
Board of SPV directs service provider, and external performance manager
Bridges and commissioner sit on Board of prime contractor, which recruits small team
Bridges offers contract design and management support to launch and deliver the project
Governance
Example

20. No performance manager used
CASA: Bridges provided core capital to a provider to bid for multiple domiciliary care contracts
Lead investor
Loan agreement, with interest rate tied to success
Example commissioners
Service Provider
Performance Manager
No performance manager used
Provider bids for contract(s) directly
Advisor
No advisor used
Full market
procurement 20 20

21. No performance manager used
Manchester foster care: Bridges provided project finance to deliver a specific contract
Share of PbR payments paid to Investor
Lead investor
Commissioner
Bridges pays up-front revenue to service provider for initial contract period
Main tri-partite PbR contract
Service Provider
Performance Manager
No performance manager used
Attachment payments + share of PbR payments paid to Provider
Advisor
No advisor used
Full market
procurement 21 21

22. Unlocking Potential Ltd
Career Connect SIB: Investors and service provider set up a new vehicle to jointly bid into a competition
Lead investor
Co-investors
Commissioners
SPV
Unlocking Potential Ltd
Advisory contract
Joint bid (SPV + investor + delivery provider) into the central competition
Delivery contract
Advisor
Service Provider
Performance Manager
No advisor used
Full market
procurement 22 22

23. Ways to Wellness: Bridges worked with the commissioner to design a payment mechanism and procure providers
Top Up Funding (30% of contract)
Innovation partnership
Commissioner
Social Prime Contractor
Lead investor
Full market
procurement
Advisors
No advisor used
Service Providers 23 23

24. Advisory services: Bridges’ Impact+ team can provide contact design and management support
Investor?
Provider raises working capital as required to deliver the contract
Example commissioners
Service Provider
Performance Manager?
Provider appointed via open procurement
Provider or investor may procure delivery support as required
Advisory support provided, with fees tied to contract success
Provider bids for contract(s) directly
Advisor
Full market
procurement 24 24

25. Introduction to Bridges
Bridges’ structure options
SIB business cases

26. Potential business cases for an Outcomes Contract
New services
Generates measurable cost savings to the commissioner, within a reasonable timeframe
The cost savings are cashable (may require re-configuration or outsourcing of related services)
Project is sufficiently difficult to require an outcomes payment mechanism to make it happen
Project is sufficiently important to justify the time and effort needed
2. Existing services
Understand the current cost of an existing service
Understand the outcomes currently being delivered by this service
Design a “Base Case Zero” contract

27. Step 1 – identify current cost per successful outcome

28. Step 2 – invite bids, using the current cost per outcome as a maximum price

29. Step 3 – choose a bid which fits the authority’s goals and budget
Optional contract cap

30. This process can drive better outcomes, and drive efficiency
Better alignment of incentives for providers:
“The supported housing was
rubbish really, they didn’t seem
like they wanted to help me, it
was more like they were there
to do the job because that’s
what they were getting paid for,
they didn’t feel as if they were
trying to move me out of there,
as I was there for over a year and they told me they couldn’t move me out because I wasn’t ready, but a month later I am in my own flat from [Fair Chance Fund] and everything has been done well”.
Better competition to deliver outcomes: 30 30

31. Contact us Bridges Ventures 38 Seymour Street London, W1H 7BPE:
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