Legally speaking – Using SIBs to fund innovation in care

The first Social Impact Bond (SIB) was launched in the UK in 2010 and since then numerous bodies have examined how this financing method may be utilised to fund innovative programmes in the healthcare sector and relieve the burden on stretched NHS budgets. This article looks at how this may be achieved and some of the tricky issues that can arise with SIBs. SIBs are a financing method which can bring together private sector funding with public sector commissioners through the delivery of services by private or charity sector operators. In its basic form a SIB will see a public sector commissioner enter into a contract with a private or charity sector service provider who is contracted to deliver a specified outcome, usually in the preventive healthcare sector. Payment under the contract will depend on outcomes being achieved and the level of payment will be linked to the savings realised, for example savings from fewer hospital admissions.