Research and analysis

The Innovation Fund pilots: qualitative evaluation - summary of early implementation findings

A report by Insite Research and Consulting on the experiences of the Innovation Fund during its first year of operation


The Innovation Fund pilots: qualitative evaluation - summary of early implementation findings

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In May 2011 DWP established the £30m Youth Unemployment Innovation Fund (IF) to back Social Impact Bonds (SIBs) aimed at helping disadvantaged young people who are, or are at risk of becoming, not in education, employment or training (NEET). Projects were commissioned in 2 stages: 6 in April 2012 and a further 4 in November 2012.

The Fund contains a number of innovative features. It is a 100% payment by results scheme, with providers paid according to their success in:

  • re-engaging participants with school
  • helping them achieve qualifications
  • supporting them into sustained employment

Projects also involve the use of social investment to provide project finance.

The projects backed by the IF will run for 3 years, with outcomes monitored for a further 6 months.

As part of its commitment to evaluating the IF, and sharing lessons learned in the setting up of SIBs to help build market capacity, DWP commissioned Insite Research and Consulting to undertake an early qualitative evaluation of the IF fund pilots.

This summary of the early implementation report presents findings on the experiences of the IF during its first year of operation. The report is based on the results of 210 face to face interviews with managers, staff and key partners in investor, intermediary, stakeholder and delivery organisations, and with participating young people. It presents findings from face to face interviews conducted between December 2012 and September 2013.

Key findings

The research reports that the 10 IF pilots have successfully identified and engaged some of the most disadvantaged young people in society.

It also reports that investors, intermediaries and delivery bodies view the IF as making a real difference to the lives of young people. Young people appear to value the strong 1-to-1 relationships with a dedicated key worker; effective goal-setting; broad ranging support sustained over a significant period of time and activities that increased their self confidence.

Schools have engaged and bought into the programmes of support on offer and demand for services frequently outweighs supply.

The SIBs model is widely acknowledged as groundbreaking. Lessons have been learnt from the first few months of delivery and projects are now progressing well.

The payment by results element was found to be a key influence of behaviours. Management of cash flow to pay for ongoing delivery has led to intense performance management by intermediaries, investors and deliverers alike which has helped increase performance.

Projects most comfortable with the funding model were those delivering more time-limited, preventative interventions with school pupils deemed to be at risk of becoming NEET. These tended to focus on educational and attendance outcomes.

How these findings will be used

These early findings will be used to inform future policy and operational thinking in relation to the development of the IF fund; the role of SIBs in helping to address other social problems; and the possible funding of future targeted, specialist employment and employability related services for young people.

The report is part of a wider programme of evaluation of the IF, which will also include an impact assessment and cost benefit analysis. This evaluation programme will help provide evidence about whether individual funded projects (as well as the overall pilot) are working to achieve a range of fiscal and social benefits; inform any future decisions about whether this intervention can be rolled out more widely; and identify how innovative delivery models might work in supporting disadvantaged young people.

Published 30 April 2014