Yesterday’s release by Infrastructure Australia of its annual Infrastructure Audit is a timely reminder of how important capital spending is to our social, community and health sectors.
It is also a reminder of how ineffective our social infrastructure currently is in addressing some of the growing and increasingly complex health and social challenges facing our communities.
The report notes that it is the challenge of operating within ‘sector-based structures’ and the ‘lack of integration’ that stops us from effectively addressing these challenges through our infrastructure investments. Indeed, it can often make things worse as a result of getting differing levels and types of services depending on where people live (p.394).
Perhaps the most critical statement in this section of the report, however, is the following:
“…challenges remain, however, in overcoming sector-based planning, funding and governance structures which limit the incentives for different infrastructure sectors to work together to improve benefits to communities.” (p. 394)
The take-out here is that the success of an infrastructure investment should not be measured by the quality or scale of the build itself but the extent to which it delivers solutions to complex and enduring social and health challenges. To do that, it requires a process that breaks down silos and creates incentives for different parts of the infrastructure system to work together with outcomes at the centre.
Latitude Network’s work with Brimbank City Council in Victoria as well as Logan City council in Qld has delivered a process which puts the social and health focus at the core of the investment, including the identification of outcomes, service delivery approaches, cross-sector partners and governance structures. The planning, design, construction as well as the operations can then proceed, confident that we are arming this piece of infrastructure with the tools it will need to truly have an impact.
We were pleased to see two key funding initiatives in last night’s Federal Coalition budget related to outcomes-based funding – the announcement of a social impact investing Taskforce and nearly $15M for payment-by-outcomes investments over the coming four years.
It is a common problem in local and state government that a new piece of infrastructure is commissioned, but it fails to make a lasting impact on the social and health needs of the community. Our client, Brimbank City Council in Melbourne's West, had identified a range of population health and social measures that are worse than the average for greater Melbourne, yet investments over the years had not closed those gaps. In addition, a sports and recreation centre in St Albans needed to be redeveloped. The insight was that this large infrastructure project could be developed in a way that addressed the health needs of the community.
The project involves engaging with organisations to co-locate on the site, but also to sign up to common agreements and collaborative approaches to addressing community needs. Specific social and health outcomes (including in early childhood development and physical activity and health) were agreed, and a management system put in place to ensure reporting and accountability of those goals.
The program has three pillars -
Council-led social innovation, and aligning council programs and activities around common social outcomes
A novel approach that attaches outcomes goals to an infrastructure project and to tenant contracts
Building a community collaboration using the principles of collective impact
The project is still in development, but is pointing to a better way to make buildings work for the community and become more active, measured parts of system change. We will update this page as progress is made and goals achieved.
Combining an infrastructure project and a collaborative project to address population-level challenges is a new an exciting direction for local government. Typically these processes are managed separately, and while a building may have some impact goals up front, they can easily be forgotten in the commercial pressure to deliver a project in a timely and cost-effective way.
Latitude's role is to help design the systems, governance and approach for the project, and to help Council navigate their way through the complexities of analysis, managing, resourcing and stakeholder management. We believe this higher standard of outcomes-based infrastructure points to a future of improved impact and effectiveness. If you would like to keep up to date with the project as in progresses, subscribe to our newsletter or get in touch.
The NSW Government's Office for Social Impact Investment (OSII) has been busy. While they are about to close a tender round for a formal social impact investment based on homelessness, they have also kicked off an exciting new funding process called 'Social Impact Investment - Evolve' (SII Evolve). The SII Evolve process invites social organisations to propose an outcomes-based project based on any cohort and social policy area. This is a significant step forward for outcomes-based funding in Australia as it is, essentially, an open invitation for organisations to come forward with great ideas about how to address social disadvantage and lowers the barriers to apply.
This advance is important because it recognises that social organisations (and their clients) need to be the initiators of progress and innovation - and often are. But not every idea or initiative with promise can fit into either the narrow criteria of a large funding round nor the complexity of a formal social impact investment (think 'Social Impact Bonds').
This funding round is different because it simplifies the first step; by requiring only a 5 page submission, rather than the 30+ pages that are behind a social impact bond-type application that is typical of the Australian funding rounds so far. The OSII understands that the complexity of preparing an outcomes-based project proposal is higher than a standard tender and can therefore be a barrier for smaller social organisations (and even larger ones) to spend the time developing the proposal.
While we aren't, yet, at the stage where social organisations have strong incentives to invest in new, outcomes-focused service delivery, initiatives such as SII Evolve mark the start of what could become a structural change in our system which recognises and rewards social organisations that invest in testing and building new models that are proven to work to shift disadvantage.
Latitude Network is supporting social organisations and communities to develop proposals for the 'Evolve' funding round in NSW as well as current social impact investment rounds in Victoria. In our experience, most social organisations are excited by the opportunity to build new or adapt existing systems free from the output-focused shackles which currently hold them and their staff back. We would encourage organisations to start working on suitable proposals now, whether for this round or future rounds of funding.
The proposals are due by 12 October 2018, so now is the time to develop an application.
Find out more from the Office of Social Impact Investment's announcement here.
As governments and service providers around the world learn from the early years of Social Impact Bonds, a wider outcomes-based contracting landscape is emerging. Originally published in Pro Bono News.
If there’s one thing most people in the social sector agree on, it’s that they want to “make a difference”. This underpins the desire to move from a focus on outputs (where we may not have evidence about whether we are making a difference), to a focus on outcomes that matter to the social service user.
Not-for-profit boards are starting to drive an outcomes focus because part of good governance is to know whether the organisation is doing something that works. An ideal social service system ensures all participants are aligned around improving outcomes for those who need it.
Yet, the social service system is still a long way from that goal.
There are plenty of pitfalls in this transition to outcomes: debates about what and how to measure; costs of data collection; worries about unintended consequences and cherry picking; and the political hurdles in shifting resources to prevention. Yet while difficult, these are technical problems that can be solved with good outcomes-based contract design and a collaborative, co-design approach with government.
We recently attended the ICS (Institute for Child Success) Pay for Success Conference in North Carolina – a conference to support outcomes-based learning with a focus on early childhood disadvantage. We heard from an early intervention project successfully preventing at-risk kids from requiring costly special education services at school. We heard of the shift of $100 million of social service spending to an outcomes basis in the state of Rhode Island. We learned about a project that prevents hospitalisations of high risk asthma patients through allergen removal in the home – saving lives and money. These are some of the dozens of projects in operation now that are based around outcomes.