No half measures when it comes to social impact

March 27th 2011

There is much talk at the moment about the importance of measurement, including a reference to it in many of the speeches I listened to during the TUC march through London against public spending cuts on Saturday (itself a very uplifting and peaceful process which took me back to the marches of the 80s).  The fact is there has always been talk of how we measure the difference we can make, only over the years it was sunk in a pond full of targets.

So, I am pleased to now hear ‘why we need to know if we make a difference’; the only trouble this time around is that much of what is being said is poppycock, and expressed by people who have been on a course – or worse still, now think they are the experts!  A little knowledge is a dangerous thing, especially since in the wrong hands measurement will be misused and become either a financial measurement of success or a target in a commission. In fact measurement used wisely is neither of those things.

We have already seen how confusion over the concept of measuring impact has led many children centres to collect data that has often been neither appropriate, relevant nor actually helped tell the story of the real difference their centre was genuinely making.  In such cases, those concerned simply failed to understand the distinction between input, outputs, outcomes and impact.

Nowadays, we also hear a lot about payment by results which essentially means that a proportion of the payment, from central or local government to providers, is dependent on achieving specified results – for example, a reduction in reconvictions among young offenders.  Elsewhere, Graham Allen and his team have introduced us to the concept of creating funds to develop services using Social Impact Bonds (SIB).  SIBs are designed to secure upfront investment from non-government sources, such as charitable foundations and private individuals, and could offer a real chance to invest in early intervention services.  Investors will then receive their returns from the government once the specified, measured outcomes have been achieved; what’s more, such defined improvements to the service ultimately lead to savings from the public purse.

At LEYF we have spent the last year finding a way of measuring our social return on investment. Social return on investment (SROI) is an approach that aims to capture the social and environmental benefits of a service. The process involves talking with stakeholders to identify what social value means to them; finding appropriate indicators of change taking place and comparing the financial value of the social change created to the financial cost of producing these changes. An SROI ratio is a comparison between the value being generated by the impact of an intervention, and the investment required to achieve that impact.

In our case, we essentially wanted to know what everyone was getting from choosing to use, work or train in a LEYF nursery; it was a laborious but interesting process. The data gathered was used to track the progress of the children, staff members and our apprentices, measuring the outcomes, whether we made a difference and by what amount, before finally benchmarking this against meaningful proxies such as a national average for similar services.  It has involved talking to many, many people – including seeking their opinion on the very measures to adopt.  What we learned from this was that achieving meaningful measurement is far from simple if you want to produce helpful and relevant results.

Over the past few months, I have been talking with and presenting to local authority commissioners about how they might most effectively invest their limited funds in supporting childcare. They struck me as people who genuinely want to get a good service for their clients but are stymied by lack of funds, European rules, lack of direction from their ‘betters’ and uncertainties as to which service will provide the best option. Measurement seems to be the final straw for them, as they try and find solutions to many of the most intractable social ills.

However, there is a wealth of information available and lots of ideas of different ways to commission for better outcomes. We know about the best length of a contract (minimum 5 years), the importance of forming relationships with commissioners, keeping monitoring sharp, focused and helpful, sorting TUPE, dealing with the legal team and the many other issues commissioners and providers have to iron out.  Surely then, this must be the perfect time to pull all these ideas into a coherent whole and move forward?

What’s needed now is a consortia or network based on the principle of Early Intervention; it would bring together providers, commissioners and investors to explore how we might firstly devise a financial vehicle to invest and fund new initiatives and secondly develop a set of plans, ideas and tools to help us measure the results.  Without such a three-way conversation, such a co-ordinated and collaborative approach, we will continue to talk about this complicated, abstract concept in our own little silos with little progress, much confusion and some awful policy decisions the only outcomes.  In the meantime, we will be inundated with toolkits, which will be neatly placed on a shelf and forgotten about.

Right now, what we really need is to be as connected to others as possible.  If nothing else, for starters this would bring the conversation about measurement, outcomes, social investment, payment by results and social return out of the darkness and into the light. Perhaps it is something our new strategic partners at the DfE can develop?

As always, please send me your comments below and continue this conversation with friends and colleagues via email and your favourite social networks.  Where the future of this debate is concerned, I look forward to your personal inputs..!