<훈련성과보고서>

해외 사회성과 보상사업 사례 연구

2018. 6

홍  우  석

국외훈련 개요

1. 훈련국 : 영국

2. 훈련기관명 : 버밍엄대학교

(The University of Birmingham)

3. 훈련분야 : 경제문화

4. 훈련기간 : 2016. 7. 4 ～ 2018. 7. 3

훈련성과보고서 요약서
성 명	홍 우 석	파견연도		2016년
훈련분야	경제문화
훈련과제	해외 사회성과 보상사업 사례 연구
훈 련 국	영국
훈련기관	버밍엄대학교 (The University of Birmingham)
보 고 내 용
제 목	Case studies and comparative analysis of Social Impact Bonds (SIBs) in the world		보고서 매수		99
내용요약	○ 본 연구에서는 SIB를 사회 정책과 사회 투자가 융자를 통해 연결되는 시스템으로 정의하고 전 세계 SIB 현황을 분석하고 대한민국에서 SIB를 확대하기 위한 정책 권고안을 제시하였음. ○ 전 세계 SIB 프로젝트 현황을 살펴보면 총 108개의 프로젝트가 시작되었고, SIB수가 가장 많은 국가는 영국으로 총 40개의 프로젝트가 있었음. 또한 인력 개발, 노숙자, 건강 등과 같은 사회 복지와 관련된 88건의 프로젝트가 있었음. 108건의 프로젝트 중 27건이 완료되었으며, 그 중 16건이 성공으로 발표되었고, 10건은 아직 보고되지 않았으며, 1건은 실패로 보고되었음. ○ 본 연구에서는 SIB가 많이 운영되고 있는 영국과 SIB의 초기 단계에 있는 대한민국에 대한 비교 분석을 통해 다음과 같은 정책 권고안을 제시하였음. 첫째는 사회적 경제 확대. 둘째는 전문 SIB 조직 설치. 셋째는 SIB 기금 조성. 넷째는 SIB 기본법 제정. 다섯째는 투자자에 대한 세금혜택. ○ SIB는 역사가 매우 짧음. 그러나 전 세계 많은 국가에서는 예산 부족에 대응하고 정책 효과를 극대화하기 위한 정책 수단으로 이것을 도입하고 있음. 대한민국뿐만 아니라 많은 국가들이 SIB를 도입하는 초기 단계에 있으며, 이러한 국가들에게 위에 제시된 권고안은 큰 도움이 될 것임.

<한글 요약서>

Case studies and comparative analysis

of Social Impact Bonds (SIBs) in the world

- 해외 사회성과 보상사업 사례 연구 -

2018. 6

홍 우 석

1. 들어가는 글

2008년 세계 금융 위기 이후 국가들은 경기 침체로 인한 경제 성장 둔화와 실업 문제로 어려움을 겪어 왔습니다. 다양한 사회 문제로 인해 복지 수요가 지속적으로 증가하고 있으며 이에 대응하기 위한 정부 예산이 점차적으로 부족해지고 있습니다. 따라서 정부는 예산의 효율성과 효과를 높이고 시민들이 노동 시장에 참여할 수 있는 기회를 늘리기 위한 새로운 패러다임의 필요성을 느끼게 되었습니다. 이러한 맥락에서 SIB는 공적 서비스에 대한 사적 자본의 참여라는 독특한 특성으로 인하여 전 세계적인 주목을 받고 있습니다.

SIB는 2010년에 피터버러市 (Peterborough)에서 재범률 감축이라는 주제로 영국에서 처음 시작되었습니다. 그 이후로 SIB 프로젝트는 전 세계적으로 확대되었습니다. 예산 부족에 직면한 많은 국가에서는 사회 복지 서비스를 제공하기 위한 정책수단으로 SIB를 시범도입하고 있으며, 서울시도 2016년에 그룹홈 아동을 위한 SIB를 아시아 최초로 도입하였습니다.

SIB는 사회복지 서비스의 예산 제약을 해결하고 효율성을 높이기 위한 대안적인 사회복지 정책 수단입니다. 그러나 SIB를 실행하는 방식에 있어서는 개별 국가의 상황에 따라 다르므로 각국의 SIB 운영 구조에는 차이가 있습니다. 본 연구에서는 SIB 도입 초기에 있는 대한민국과 같은 국가가 시행착오를 줄일 수 있도록 SIB가 널리 퍼져 있는 영국 및 유럽 국가들의 개별 사례에 대한 심층 분석을 통하여 정책적 대안을 제시하고자 합니다. 따라서 본 연구의 목적은 아래와 같습니다.

- SIB의 개념, 구조, 이해 관계자, 강점 및 위험성 검토, 전 세계 현황 분석

- 영국, 한국 및 다른 유럽 국가에서 시행중인 SIB 프로젝트 사례 연구

- SIB 시행 초기단계에 있는 한국의 문제분석 및 대안제시

또한 본 연구는 ‘SIB가 영국 등 많은 국가에서 확대되고 있는데 한국에서는 확대되지 않는 이유와, SIB 도입 초기 단계에 있는 한국과 같은 국가들이 어떻게 이런 상황을 개선해 나갈 수 있는가?’ 라는 질문을 가지고 논리를 전개해 나가도록 하겠습니다.

2. 연구방법론

Edmiston (2018)에 따르면 SIB에는 기본적으로 공공 부문 발주기관, 중간 운영자, 사회투자자, 서비스 제공자, 서비스 수혜자의 5가지 참여자가 존재합니다. 또한, 사업성과에 대한 중립적인 평가를 수행하는 평가기관의 역할도 중요합니다. 그러나 SIB 프로젝트는 각국의 환경에 따라 약간 다르게 구현됩니다. 따라서 개별 국가의 법률적 기반을 분석할 필요가 있고, 자금과 투자자에 대하여 살펴볼 필요가 있으며, 마지막으로 성공 기준에 대하여 비교분석도 필요할 것입니다.

본 연구는 영국 및 다른 유럽 국가와 같은 SIB 정책을 기 시행하고 있는 국가를 분석하고, 영국과 대한민국의 실제 SIB를 활용한 정책을 분석하여 SIB를 처음 도입하거나 도입하려고 준비 중인 국가를 위하여 정책 권고안을 제공할 것입니다.

연구를 위한 데이터 수집은, 2018년까지 전 세계적으로 시행되는 SIB 프로젝트 목록은 Social Finance 웹사이트를 기초로 정리하였으며, 개별 SIB 프로젝트의 내용은 관련 기관 및 각국 웹 사이트의 보고서를 기반으로 분석하였습니다. 관련 문헌 검토를 위해 Google 학술 검색을 이용하여 기존 보고서를 수집하고 참고하며, 서울시의 SIB 프로젝트에 대한 정보는 서울시 웹 사이트, 언론 보도 등을 통해 수집 및 분석하였습니다.

3. 문헌분석

3.1. SIB 개념

새로운 정책 프레임 워크가 도입되면 많은 사람들은 기존 정책 프레임 워크와 새로운 정책 프레임 워크의 차이점에 초점을 맞춥니다. 최초의 SIB가 Peterborough市에서 2010년에 시작되었으나, 지금까지는 SIB 개념에 대한 명확한 합의가 이루어지지는 않았습니다. 다만 아래와 같으 여러 기관 및 학자들에 의해서 정의된 내용이 있습니다.

Social Finance (2011)에 따르면 SIB는 투자자 수익률을 사회적 성과와 연계시키는 자금 조달 형태입니다. 투자자는 사회적 결과가 달성되는 경우에만 수익을 얻습니다. 이 개념을 통해 SIB는 정부가 지정한 공공사업 목표 달성에 대한 보상을 위해 정부와 민간 부문 간의 일종의 계약으로 정의 할 수 있습니다. SIB가 채권이라고 불리는 이유는 성공에 비례하여 수익률을 보장하는 '조건부 성공 지불 채권'의 특성을 가지고 있기 때문입니다. 보통 채권의 경우, 발행 기관은 만기일에 채권 보유자에게 원금과 이자를 지불하는 반면, SIB는 사전 계약 조건을 충족하는 경우에만 지급됩니다.

McKinsey (2012)에 따르면 SIB는 자선 사업가 및 영향력 있는 투자자가 가난하고 취약한 사람들을 돕는 예방 프로그램 확대에 대한 재정적 위험을 감수하는 다단계 파트너십입니다. 이 개념에 따르면 SIB는 정부, 투자자 및 민간단체와 같은 프로젝트에 참여한 다양한 이해 관계자가 특정 사회 문제를 협력하고 해결하기 위해 만든 메커니즘이기 때문에 상업적 채권과는 다릅니다. 이것은 다양한 이해 관계자들의 참여로 사회 문제를 해결하는 사회 정책과 유사합니다.

폭스 (2013)는 SIB가 개인 투자를 통한 사회적 성과의 재원 조달을 허용하는 것이라고 정의하였습니다. 이 개념에 따르면 SIB는 사회성과를 이끌어 내기 위한 사회적 투자 중 하나로 정의 될 수 있습니다.

본 연구에서는 위에 정의된 개념을 바탕으로 SIB의 개념을 사회 정책과 사회 투자가 금융을 통해 연결되는 시스템으로 정의할 것입니다.

3.2. SIB 구조

Callanan (2012)에 따르면, SIB는 정부, 투자자, 중개자, 서비스 제공자,  및 수혜자 그룹으로 구성됩니다. 또한 독립적인 평가자 및 자문가는 SIB 프로젝트가 공정하고 올바르게 수행되도록 돕는 보조적인 역할을 수행합니다. 이것을 그림을 나타내면 Figure1과 같습니다.

각 이해 관계자 그룹의 특성은 다음과 같습니다. 첫째, 정부는 복잡한 사회 문제를 해결할 책임이 있습니다. 둘째, 투자자는 사회적으로 의미 있는 일에 돈을 투자하면서 경제적 혜택을 얻고자 합니다. 셋째, 중개자는 전체 프로젝트를 감독하는 역할입니다. 넷째, 서비스 제공 업체는 관련 업무 분야에서 경험이 있는 조직입니다. 다섯째, 수혜집단은 SIB 프로젝트의 정책 대상입니다.

프로젝트의 의도에 공감하는 투자자는 중개자가 발행한 채권을 구입하는 방법으로 자금을 제공합니다. 중개자는 투자자가 제공한 자금을 운영비용으로 서비스 제공 업체에 할당하고 서비스 제공 업체는 이 자금을 기반으로 수혜자에게 서비스를 제공합니다. 프로젝트가 완료된 후 정부는 합의된 기준에 따라 보상을 하고 중개자는 원금과 인센티브를 투자자에게 돌려줍니다.

3.3. SIB의 강점, 약점 분석

SIB의 강점은 사회 문제의 원인에 대한 조기 개입을 통해 사회 경제적 문제를 사전에 예방할 수 있고, 공공 및 민간 부문이 협력을 통해 전문 지식을 갖춘 민간단체가 복잡한 사회 경제적 문제에 효율적으로 대처할 수 있으며, 사회 서비스의 효과를 정확하게 평가하고 효과적인 정책을 시행함으로써 공공 정책의 실패로 인한 납세자 부담을 최소화 할 수 있습니다.

Social Finance (2012)에 따르면 SIB는 다음의 6가지 위험 요소를 가지고 있습니다. 첫 번째는 개입 모델 위험입니다. 부정확한 목표 설정, 목표 그룹에 대한 이해 부족 등으로 인하여 발생하게 됩니다. 두 번째는 집행 위험입니다. 불확실한 권한, 여러 참가자간의 의사소통 부족 등으로 인하여 문제가 발생할 수 있습니다. 세 번째는 중개 위험입니다. 이것은 중개자가 총 관리자로서의 역할을 수행 할 수 없다는 위험입니다. 네 번째는 정치적 위험입니다. SIB와 관련된 정부 정책 변경으로 인해 프로젝트가 취소되거나 프로젝트 목표 달성에도 불구하고 정부가 재정 적자를 보상 할 수 없는 경우입니다. 다섯 번째는 재정적 위험입니다. 이것은 SIB 프로젝트의 실패로 인해 투자자 그룹이 손실을 입을 위험을 말합니다. 마지막으로 평판 위험입니다. 이것은 SIB 프로젝트가 실패하고 시장에서 나쁜 평판과 이미지가 형성되어 향후에 더 많은 프로젝트를 수행하기 어려울 때 발생합니다.

4. 세계 SIB 현황 분석

Social Finance (2018)에 따르면 2018년 2월까지 24개 국가에서 108 개의 SIB 프로젝트가 완료되었거나 진행되고 있으며, 총 투자액이 3억9천2백만 달러였고, 70만명이 넘는 사람들에게 서비스를 제공했습니다. 이것은 2010 년 영국 Peterborough市에서 시작된 최초 SIB 이래로 8년 동안의 결과입니다. Appendix A는 Social Finance의 데이터베이스를 참조하여 2018년 2월까지 전 세계 SIB 목록을 요약한 것입니다.

4.1. 수치분석

2010년에 Peterborough市 교도소 수감자의 재범을 줄이기 위한 첫 번째 SIB가 영국에서 시작되었습니다. 2012년에는 NEET 및 보육원 아동을 위한 13개 프로젝트가 영국에서 시작되었습니다. 2013년에는 뉴욕시에서 재범을 줄이기 위한 2건의 프로젝트, 솔트 레이크 시티 교육을 위한 1건의 프로젝트, 뉴 사우스 웨일즈의 2건의 아동 복지 사업, 네덜란드와 독일의 청년 실업률 감소를 위한 2건의 프로젝트, 영국에서 입양을 주제로 한 프로젝트가 발주되었습니다. 2014년에 미국 3건, 영국 2건, 벨기에 1건, 캐나다 1건이 시작되었습니다. 그 이후로 SIB 프로젝트의 확장 속도는 가속화 되었습니다. 2015년 25개, 2016년 19개, 2017년 34개가 시작되었습니다. Table 1은 전세계 SIB 프로젝트 수치를 정리한 것입니다.

4.2. 국가분석

영국은 SIB 프로젝트가 가장 많은 국가이며 총 40개의 프로젝트가 실행 또는 완료되었습니다. 다음은 미국으로 총 20개의 프로젝트가 있습니다. 호주와 네덜란드에는 각각 8개의 프로젝트가 있고 캐나다와 포르투갈에는 각각 4개의 프로젝트가 있습니다. 총 24개국이 SIB를 도입했으며. 특히 미국은 2016년과 2017년에 12개의 새로운 SIB 프로젝트를 출범 시켰습니다. Table 2는 국가 별 SIB 프로젝트 현황을 보여줍니다.

4.3. 주제 분석

Table 3에서 볼 수 있듯이, SIB 주제의 대부분은 인력 개발을 위한 것입니다. 이것은 영국이 혁신 기금을 기반으로 한 10개의 프로젝트를 시행한 것과 관련이 있습니다. 다음으로 많은 주제는 노숙자 문제 19건, 건강 문제 18건, 아동 및 가족 복지 15건, 형사 사법 11건, 교육 8건, 환경 문제 8건입니다.

전체적으로 노동력 개발, 노숙자, 건강, 아동 및 가족 복지와 같은 사회 복지 분야에서 88가지 프로젝트가 진행되었습니다. 이는 취약 계층을 위한 고용 기회를 촉진하려는 정책 목표가 정부 예산 부담을 줄이기 위한 SIB의 특성과 맞아 떨어졌기 때문입니다. 많은 국가가 Peterborough市 프로젝트의 성공을 벤치마킹하기 위해 동일한 주제를 선택했으므로 형사 관련 11건의 프로젝트가 진행되었습니다.

4.4. 결과 분석

Social Finance (2018)의 발표에 따르면 SIB 결과는 긍정적입니다. 지금까지 108개의 프로젝트가 시작되었고, 총 27개의 프로젝트가 완료되었습니다. 완료된 프로젝트 중 16개 프로젝트가 성공으로 간주되었으며, 10개 프로젝트는 결과가 보고되지 않았습니다. 뉴욕시에서 청소년 재범에 대한 미국 최초의 SIB 프로젝트만 실패로 보고되었습니다. Table 4는 SIB의 결과를 정리한 내용을 보여줍니다.

5. 사례 연구

5.1. 서울시 SIB 프로젝트 - 아동교육

서울시 최초의 SIB 프로젝트는 BIF (Borderline Intellectual Function) 상태의 아동복지시설에 거주하는 100명의 아동을 대상으로 3년간 교육서비스를 제공하는 프로젝트입니다. 동 프로젝트는 인지 능력 향상, 학습 지원, 언어 개발 지원, 심리 치료 및 사회성 향상을 위해 대상 아동에게 프로그램을 제공합니다. 서울시는 프로젝트의 총괄 조정자로 중개자와 계약을 맺고 중개자는 민간 투자자와 서비스 제공 업체를 모집했습니다. 프로젝트가 완료되면 독립 평가 기관이 프로젝트 성과에 대한 전문적이고 객관적인 평가를 내릴 것입니다. 서울시 SIB 프로젝트의 구조는 Figure 2와 같습니다.

프로젝트의 목표은 BIF 아동의 지적 능력과 사회적 능력을 향상시켜 자립을 도와주는 것입니다. 이러한 목표를 달성하기 위해 서울시와 중개자인 팬임팩트코리아는 지적 능력 향상을 측정 할 수 있는 양적 지표인 웩슬러지능검사와, 사회적 능력 향상을 측정할 수 있는 질적 지표인 TRF를 사용합니다.

수익구조를 살펴보면 서울의 SIB 프로젝트는 원칙적으로 원금보장이 되지 않습니다. 성과가 일정 수준 이상이면 인센티브가 주어지지만, 달성되지 않으면 투자된 원금의 전체 금액이 손실 될 수 있습니다. 총 투자 규모는 3년간 약 £ 0.74m이며, 세부적인 수익구조는 Table 5에 요약되어 있습니다.

5.2. 영국 SIB 프로젝트 - 혁신기금을 활용한 NEET 예방

2011년에 영국 정부는 취약 계층의 청소년이 NEET로 떨어지는 것을 막기 위해 10개의 SIB를 설계했습니다. NEET는 현재 교육, 취업 또는 훈련에 종사하지 않고 취업 교육을 받지 않은 사람을 의미합니다. 동 프로젝트는 2012년에 2차례에 걸쳐 발주되어 3년 동안 지속되었습니다. 런던, 버밍햄 등 10개 지역에서 약 16,000명의 취약 청소년에게 서비스가 제공되었습니다. Table 6은 지역별 및 인구별 10개 프로젝트 현황을 정리한 것입니다.

혁신 기금이 조성된 목적은 불우한 환경이나 불우한 환경에 처해질 위험에 처한 청소년을 돕고, 이들의 고용 가능성을 향상시키며, 이를 통하여 자립능력을 높이는 것입니다. 이 목표에 기초하여 계획된 10개의 프로젝트는  취약 청소년이 교육 및 취업 기술 습득을 통해 자립능력을 증진함으로써 장래에 정부 복지 서비스에 대한 의존도를 줄이는 것을 목표로 하고 있습니다. 그러나 각 SIB 프로젝트는 개별 입찰을 통해 업체가 선정되었기 때문에 프로젝트별로 약간 다른 프로그램을 가지고 있었습니다. Table 7은 Thomas (2014)가 작성한 보고서를 참조하여 10개 프로젝트의 주요 프로그램을 재구성한 것입니다.

혁신 기금은 NEET를 지원하기 위해 10개의 SIB 프로젝트에 총 3천만 파운드를 투자했습니다. 투자자는 1차 프로젝트에서는 1인당 최대 8,200 파운드의 수익을 얻을 수 있으며, 2차 프로젝트에서는 최대 11,700 파운드의 수익을 얻을 수 있습니다. 합의된 성과에 대한 최대 지불 비율은 Table 8에 정리되어 있습니다.

프로젝트의 결과를 살펴보면, 10개의 SIB 프로젝트가 이행이 완료되었고 보상도 완료되었습니다. 목표와 성과의 구체적인 수치는 밝혀지지 않았지만 영국 정부는 개별 프로젝트가 목표를 달성했거나 초과했다고 밝혔습니다. 영국 정부가 성과 보상에 대한 세부 사항을 공개하지는 않았지만, 프로젝트의 3년 실행이 효과적인지 여부를 조사하기 위해 2014년 10월과 2015 년 1월에 각각의 프로젝트에 참여한 100명의 젊은이들에 대하여 인터뷰한 보고서를 발표하였는데, 이를 통하여 프로젝트의 효과가 성공적이었음을 짐작할 수 있습니다.

5.3. 유럽국가 SIB 프로젝트 - 난민 지원

현재 중동의 내전과 아프리카 국가들의 정치적 문제가 난민의 주요 원인이 되고 있습니다. 이 난민들의 출현과 이동은 전 세계적인 문제를 야기하고 있습니다. 이민자나 난민이 새로운 국가에 정착하기 위해서는 언어 능력, 직업, 문화적 이해, 법률 지원, 의료, 주택 등과 같은 다양한 요구가 있습니다. 이 중 가장 중요한 문제는 고용입니다. 그들이 직업을 얻고 안정적인 소득을 얻을 때 그들은 자연스럽게 새로운 터전에 동화될 수 있습니다. 그러나 그들은 일자리를 구하는 데 많은 어려움을 겪습니다.

많은 국가에서 이러한 문제를 인지하고 다양한 이민자 고용 지원 정책을 시행하고 있습니다. 영국도 또한 이민자와 난민에게 일대일 면담, 전문가 조언 및 지원, 구직 지원, 직장 경험 기회 등을 제공합니다. 그러나 이러한 노력에도 불구하고 난민이나 이민자들은 자국민보다 취업에 어려움을 겪고 있습니다. 몇몇 국가에서는 이러한 난민과 이주민의 고용 증대라는 정책 목표를 달성하기 위해 SIB 프로젝트를 시작했습니다. 3개의 유럽 국가 사례 (핀란드, 스위스, 벨기에)가 Table 9에 정리되어 있습니다.

6. 국가간 비교 연구 - 영국, 대한민국

6.1. 법률적 기반

영국은 SIB를 직접 정의하는 법을 가지고 있지 않지만 Public Services (Social Value) Act 2012는 SIB의 간접적으로 지원하는 법률적 기반입니다. 이 법은 SIB에 대하여 직접적으로 규정하고 있지는 않지만 정부가 민간 부문에 대하여 공개 모집 및 계약과 같은 SIB 절차를 시행하는 부분을 규정하고 있습니다. 또한 Social Investment Tax Relief Statement는 SIB 투자자에게 세금 혜택을 제공합니다. SIB 투자자는 이 법을 통하여 최대 30%의 세금 감면 혜택을 받을 수 있습니다. 대한민국의 경우 서울시와 경기도는 SIB 사업에 대한 직접적인 조례를 제정하였습니다. 그러나 SIB에 대한 중앙정부 차원에서는 입법은 아직 진행되지 않았습니다.

6.2. 기금 조성

영국은 중앙 및 지방 정부 차원에서 SIB 프로젝트를 지원합니다. 중앙 정부 차원에서 다양한 부서는 SIB를 지원하기 위해 기금을 마련했습니다. 영국 정부 웹 사이트 (2018)에 따르면 Life Chances Fund, The Rough Sleeping SIB Fund, Fair Chance Fund, Youth Engagement Fund, Social Outcomes Fund, Commissioning Better Outcomes Fund and Innovation Fund 등 총 7개의 기금이 SIB를 위해 조성되었습니다. 영국의 SIB중 총 31개가 이 기금의 지원을 받았습니다. (Appendix B 참조). Table 10에 7개의 기금이 정리되어 있습니다. 대한민국은 SIB를 위하여 조성된 기금이 현재까지는 존재하지 않습니다.

6.3. 계약 방법

영국은 40개의 SIB를 발주하였으며, 그 중 23개가 복수 계약을 통해 구현되었고, 17개는 개별 계약을 통해 구현되었습니다. 복수 계약이란 정부가 동일한 기준을 가지고 여러개의 프로젝트를 발주하여 중개자 또는 서비스 공급자를 모집한다는 의미입니다. 많은 프로젝트가 복수 계약으로 구현된 이유는 프로젝트가 정부 기금을 사용하여 수행되었기 때문입니다. SIB 도입 초기에 영국은 이러한 복수 계약을 통해 프로젝트를 확대했으며, 최근에는 Social Outcomes Fund와 Commissioning Better Outcomes Fund에 기반한 개별계약을 통해 많은 프로젝트가 수행되었습니다. 각각의 계약 방법은 Appendix B에 정리되어 있습니다. 대한민국의 경우 서울시와 경기도는 지방 자치 단체의 조례에 의거하여 개별계약을 진행하였습니다. 개별 계약을 맺은 이유는 기금이 존재하지 않고, 프로젝트가 시범사업의 성격을 가졌기 때문입니다.

6.4. 투자자 유형

영국의 SIB 투자자 대부분은 사회적 금융 및 NGO입니다. 세부적으로 살펴보면, 사회적 금융이 32개 프로젝트에 참여하였고, NGO가 17개 프로젝트에 참여하였습니다. Table 11은 영국 SIB 프로젝트의 투자자 유형을 정리한 것입니다. 대한민국의 SIB에는 다양한 투자자가 참여했습니다. 서울시의 경우 NGO, 사회적 기업, 민간 기업이 투자자로서 프로젝트에 참여하였으며, 경기도의 경우 사회적 기업과 개인 투자가가 참여하였습니다. Talbe 12는 대한민국의 SIB 투자자 유형을 정리한 것입니다.

6.5. 프로젝트 주제

영국에서 시행된 40개의 SIB 중 15개가 고용 및 직업능력 향상과 관련된 것이고, 12개는 노숙자와 관련된 것이었습니다. 또한 아동 및 가족 복지와 관련하여 6개, 건강 문제와 관련하여 5개의 프로젝트가 발주되었습니다. 영국 정부는 빈곤에 처한 사람들의 자립과 노숙자 문제에 매우 관심이 있으며, 이러한 문제를 해결하기 위해 민간 부문과의 협력을 중요하게 생각한다고 추론할 수 있습니다. 대한민국의 경우 아동교육 1건, 직업 기회 제공 1건의 프로젝트가 시행되었습니다. 많은 프로젝트가 대한민국에서 시행되지는 않았지만, 정부의 정책 방향은 어려움을 겪고 있는 사람들의 자립을 지원하는 것이라고 추론할 수 있습니다. Table 13은 양국의 SIB 주제를 정리한 것입니다.

6.6. 사회경제적 배경

David Cameron은 2010년에 총리직에 올랐을 때 빅 소사이어티 정책을 발표했습니다. 이 정책의 핵심은 중앙 정부가 모든 사회적 문제를 해결할 수 없으므로 민간 부문이 일정부분 역할을 해야 한다는 것입니다. 이러한 기조아래 영국은 2010년 Peterborough市에서 세계 최초의 SIB 프로젝트를 시행하였으며, 2012년 사회 투자 금융 중개 기관을 돕기 위해 BSC (Big Societal Capital)가 출범했습니다. 또한 SIB를 간접적으로 지원하기 위해 2012년에 Social Value Act가 제정되었으며, 정부는 자금을 조달하기 시작했습니다. 이러한 사회 경제적 기반에서 영국은 SIB 프로젝트를 크게 확대하였습니다. 그러나 대한민국은 사회적 금융시장이 크지 않습니다.

7. 대한민국 문제점 분석 및 정책제언

7.1. 문제점 분석

첫째, 대한민국은  자유 시장 경제 체제를 중심으로 경제시스템이 구성되어 있습니다. 그러나 최근에는 소득 불평등과 청년 실업 등 다양한 사회 문제가 발생하여 정부는 모든 사회적 문제를 스스로 해결할 수 없다는 것을 인식하고, 대안으로 사회적 경제 개념을 접목시키려 하고 있습니다. 그러나 많은 사회 구성원이 아직 그러한 문화를 완벽히 이해하지 못하는 것이 현실입니다.

둘째, 대한민국은 SIB 프로젝트를 전문적으로 지원할 수 있는 조직을 아직 갖추고 있지 않습니다. 우리가 위에서 보았듯이 2017년에 행정안전부에서 지침을 발표했지만, 이 부처는 SIB를 전문적으로 하는 조직이 아닙니다. SIB를 시작한 서울시와 경기도도 시범 프로그램으로 하나의 프로젝트만 시작했기 때문에 아직 SIB 지원 전문 기관을 설립하였다고 볼 수는 없습니다.

셋째, 정부가 SIB를 발주하는 방법에는 두 가지가 있습니다. 정부 예산 또는 기금을 활용하는 것인데, 대한민국은 정부 예산을 기반으로 SIB가 진행되고 있습니다. 그러나 정부는 매년 예산을 반영하는 절차가 복잡하기 때문에 예산 기반으로는 유연하게 프로젝트를 처리하기가 어렵습니다.

넷째, 대한민국은 SIB를 직접 지원하는 중앙 정부 차원의 법률이 없으므로 중앙 정부는 SIB를 적극적으로 도입할 유인이 없습니다. 현재 SIB 프로젝트는 지방 정부 차원의 조례를 통해 시행되었지만 전국적으로 확대하기는 쉽지 않으며 지방 정부의 예산 제약으로 대규모 프로젝트를 수행하기도 어렵습니다.

마지막으로 SIB 투자자들은 프로젝트 실패의 위험을 감수하는 것에 대하여 불안감을 가지고 있습니다. 왜냐하면 프로젝트가 완전히 실패한 것으로 판명되면 모든 투자 원금을 잃을 수 있기 때문입니다. 이러한 투자 위험으로 인해 투자자들은 SIB에 투자하는 것을 주저합니다. 투자를 촉진하기 위해서는 투자자들에게 특정 세금 혜택을 제공할 필요가 있지만, 대한민국에는 아직 이러한 세제 감면제도가 존재하지 않습니다.

7.2. 정책 제언

첫째, 대한민국은 사회적 경제를 확대할 필요가 있으며, 이를 위하여 가장 먼저 할 일은 그것을 지원하는 법을 만드는 것입니다. 현재 사회적 경제 기본법의 입법안은 오랫동안 국회에서 검토 중입니다. 국회는 법률제정에 좀 더 적극적일 필요가 있을 것입니다.

둘째, 전문조직을 설치하는 것입니다. 영국과 대한민국 비교에서 보았듯이 영국 정부는 2012년 사회 투자 금융 기관인 Big Society Capital을 설립했습니다. 또한 SIB 센터에서는 연구, 컨설팅, 기획, 투자, 평가 등 다양한 지원 업무를 수행하고 있습니다.

셋째, SIB 기금을 설치해야 합니다. 국은 SIB 기금을 다수 창설했으며 동 기감을 활용하여 다양한 SIB 프로젝트를 발주하였습니다. 정부 기금을 기반으로 많은 수의 프로젝트를 발주할 수 있으며, 다양한 주제의 프로젝트를 동시에 진행할 수 있을 것입니다.

넷째, SIB 기본법을 제정해야 합니다. 영국은 Public Services (Social Value) Act 2012를 기반으로 중앙 정부 수준의 SIB를 추구하고 있습니다.  중앙 정부 차원의 법적인 토대는 SIB의 지속성을 담보할 수 있으며, 지방 정부가 별도의 조례를 제정하지 않고도 프로젝트를 수행하는 법적 근거가 될 수 있습니다. 기본법을 제정할 때에는 이전에 존재하지 않았던 새로운 계약 유형의 결정, 장기 프로젝트를 가능하게 하는 방법, 새로운 계약 절차, 정부에 의한 자금 지원 등을 고려할 필요가 있습니다.

마지막으로 사회적 투자에 대한 세금 혜택을 부여해야 합니다. 영국은 SIB를 포함한 사회적 투자를 확대하고 SIB 투자자가 30 %까지 세금감면 혜택을 받을 수 있도록 하고 있습니다. 대한민국도 사회적 투자를 촉진하고 새로운 시장을 창출하기 위해 영국과 같은 세제 혜택을 고려할 필요가 있을 것입니다.

8. 마치는 글

본 연구에서는 SIB를 사회 정책과 사회 투자가 융자를 통해 연결되는 시스템으로 정의하고 전 세계 SIB 현황을 분석하고 대한민국에서 SIB를 확대하기 위한 정책 권고안을 제시하였습니다.

전 세계 SIB 프로젝트 현황을 살펴보면 총 108개의 프로젝트가 시작되었습니다. SIB 수가 가장 많은 국가는 영국이었으며, 총 40개의 프로젝트가 있었습니다. 또한 인력 개발, 노숙자, 건강 등과 같은 사회 복지와 관련된 88건의 프로젝트가 있었습니다. 108건의 프로젝트 중 27건이 완료되었으며, 그 중 16건이 성공으로 발표되었고, 10건은 아직 보고되지 않았으며, 1건은 실패로 보고되었습니다.

본 연구에서는 SIB가 많이 운영되고 있는 영국과 SIB의 초기 단계에 있는 대한민국에 대한 비교 분석을 통해 다음과 같은 정책 권고안을 제시하였습니다. 첫째, 대한민국은 사회적 경제를 확대해야 합니다. 이를 위해 국회는 사회적 경제적 기본법을 제정해야 합니다. 둘째, 대한민국은 전문 SIB 조직을 창설해야합니다. 영국의 Big Society Capital과 SIB 센터를 벤치 마크하는 것이 좋을 것입니다. 셋째, 대한민국은 SIB 기금을 조성해야 합니다. 이를 통해 다양한 SIB를 발주하고, 중앙 정부와 지방 정부가 공동으로 추진하는 노력을 해야 합니다. 넷째, 대한민국 정부는 SIB 기본법을 제정해야 합니다. 이는 정부 부처가 SIB를 시행할 법적 기반을 제공할 것이다. 다섯째, 대한민국은 SIB 투자자에게 세금 혜택을 제공해야합니다. 이를 통해 투자자는 위험을 줄일 수 있습니다.

SIB는 역사가 매우 짧습니다. 그러나 전 세계 많은 국가에서는 예산 부족에 대응하고 정책 효과를 극대화하기 위한 정책 수단으로 이것을 도입하고 있습니다. 대한민국뿐만 아니라 많은 국가들이 SIB를 도입하는 초기 단계에 있으며, 이러한 국가들에게 위에 제시된 권고안은 큰 도움이 될 것입니다.

<원본>

Case studies and comparative analysis of Social Impact Bonds (SIBs) in the world

MA

Policy into Practice with Integrated Placement

2018

The University of Birmingham

Department of Social Policy and Social Work

Abstract

Since 2008 when the global financial crisis began, welfare demands have grown steadily worldwide. Because of this, governments become aware of the fact that the budget by itself cannot solve all social problems, and so realise that it is necessary to reduce the social service cost and increase the policy effectiveness simultaneously. According to this socioeconomic environment, the concept of social impact bonds (SIBs), which provide social services by private investment and are paid back from the government budget according to the results after a period, have attracted the attention of policy-makers.

Peterborough in the UK started the world’s first SIB, which aimed to reduce recidivism in 2010, and it turned out to be a success. Encouraged by this result, SIBs are now expanding all over the world. South Korea is also interested in the SIB concept because of budgetary limitations for welfare demand it introduced SIB projects as a pilot programme in local governments such as Seoul City and Gyeonggi Province. However, South Korea has some problems in expanding SIBs because of the lack of awareness of the social economy, lack of specialist organisations, difficulty in obtaining budget and lack of legal basis.

The purpose of this study is to analyse SIB projects implemented around the world and to compare the UK with South Korea. Through analysis and comparison, we will suggest appropriate policy recommendations to countries that are in the early stages of introducing SIBs.

Contents

1. Introduction

2. Methodology

3. Literature Review

4. Status Analysis of SIBs in the World

5. Case Study

6. Comparison Between the UK and South Korea

7. Problems and Recommendations for South Korea

8. Conclusion

Appendix A

Appendix B

Appendix C

Appendix D

References

List of Tables

1. Number of SIBs

2. SIB project status by country

3. Issue area of SIBs

4. Result status of SIBs

5. Revenue structure of the Seoul SIB

6. Regions and population of DWP Innovation Fund SIBs

7. Programmes on Innovation Fund SIBs

8. Maximum payment rates in Innovation Fund SIBs

9. SIBs for migrants and refugees

10. Funds and organisations for SIBs in the UK

11. Investor types of the UK SIBs

12. Investor types of South Korea SIBs

13. Issue areas of UK and South Korea SIBs

List of Figures

1. Structure of SIB

2. Structure of Seoul City Government SIB

1. Introduction

1.1 Background

Since the global financial crisis in 2008, countries have been suffering from slow economic growth and unemployment problems due to the long-term economic downturn. Welfare demand is constantly increasing due to various social problems, and governments’ budgets to cope with this are gradually becoming insufficient. If this problem is not solved, it is difficult to guarantee a sustainable society.

Thus, governments are making various efforts to increase the efficiency and effectiveness of their budgets, to increase opportunities for citizens to participate in labour market and to attract investment to improve the lives of young people. However, even if the efficiency of the budget is increased, the welfare provided by the public sector is limited. The Social Impact Investment Taskforce (2014) said that the financial crash of 2008 highlighted the need for a renewed effort to ensure that finance helps to build a healthy society. It is necessary to shift the paradigm that private funds can be put into the public welfare service area.

In this context, SIBs have attracted worldwide attention due to the unique type of public-private partnership in terms of private capital participation in social services. The SIB is based on a consensus between the government and the private sector to compensate for the excess of investment, if the social service outcomes implemented by the private sector are evaluated to have sufficiently reduced future spending by the government. The SIB is called ‘payment by results’, which ‘has been drawn upon as a reform mechanism intended to stimulate more openness and innovation in public services through new types of providers within the public sector, where this will improve services and give better value to the taxpayers’ (Edmiston, 2018).

In 2010, the SIB was introduced for the first time in the UK with the aim of ‘reducing reoffending by short-sentenced prisoners’ (Disley, 2011) in Peterborough. Since then, SIB projects have expanded globally. Many countries facing budget shortages chose to experiment with SIBs as an alternative policy for providing welfare services. Seoul City Government, the capital of South Korea, introduced the SIB for group home children in 2016, as part of this global trend.

The SIB is an alternative social welfare policy to solve the budgetary limitations of social welfare services. The difference between the SIB and other social welfare policy is its unique operating structure. However, there are differences in the operating structure of SIBs in each country because the way policies are implemented depends on the circumstances of individual countries, even if a SIB has common characteristics. There is also a need for in-depth analysis of individual cases in the UK and Europe, which countries are leading the SIB, So that countries such as South Korea that have introduced the SIB for the first time will be able to reduce errors.

1.2. Aims and research question

The SIB, which is emerging as one of the new financing methods of social welfare policy, has already become a policy structure in the UK, the US and other European countries. However, South Korea has introduced SIB experimentally.

The purpose of this study is to review the SIB concept, structure, stakeholders and to analyse the status of SIB projects around the world. Then, we will look at case studies in the UK, South Korea and other European countries to examine the characteristics of each country, and we will compare the UK and South Korea. In addition, we need to examine the problems as to why SIBs are not expanding widely in South Korea. Through this problem analysis, we will recommend policy-makers who need to apply the SIB in future policy.

The aims of this study are therefore as follows:

-  Review concept, structure, stakeholders, strength and risk of SIBs

-	Analyse the status of SIBs that have started around the world

-	Examine case studies of some SIB projects that have launched already in the UK, South Korea and other European countries

-	Draw problems and recommendations for South Korea, which is in the early stage of using SIBs.

The research question of this report is why doesthe SIB project not in expanding in South Korea, even though the SIB paradigm has become a policy tool in the UK and many countries? Therefore, how can South Korea, which is in the early stage of using SIBs, change this situation?

2. Methodology

2.1. Overview

According to Edmiston (2018), SIBs basically involve five operators: public sector commissioner, social finance intermediary, social investor, third sector provider and service beneficiaries. In addition, the role of the neutral evaluation agency on the success of the contract is also important.

The basic structure of the project is the same as above. However, each SIB project is slightly different depending on the environment of each country. First, it is necessary to have the legal base, and it is necessary to analyse this legal base in each country because it needs to compensate private sector investors for public sector performance.Second, it is necessary to look at funding and investment, because a SIB project carries out public welfare policies with private capital. Third, it is necessary to analyse the criteria for success and the evaluation institute, because aSIB project has a structure to evaluate the success and failure.

2.2. Target countries

This study analyses the leading countries using SIBs, such as the UK and other European countries, so as to give policy recommendations for success in countries that are implementing their first SIB. In addition, we will analyse the SIB project for group home children in Seoul, South Korea.

The UK has been chosen because it is the leading country for SIB projects. The reason for choosing European countries is because there are many projects there that have different themes than the UK. Finally, the reason for choosing South Korea is to analyse the problems occurring in countries where the project is being implemented for the first time, and to give recommendations through this study.

2.3. Data collection

The list of SIB projects implemented worldwide by 2018 is found on the Social Finance website, and the contents of the individual SIB projects are based on the reports of related institutions and websites of each country. For the literature review, we refer to the data retrieved through Google Scholar. Information on the SIB project in Seoul in South Korea is gathered through the Seoul City Government’s website, media coverage and so on. Based on these data, we will analyse status, introduce real SIB projects, compare countries, draw problems and suggest recommendations.

3. Literature Review

3.1. Concept of the social impact bond

When a new policy framework is introduced, many people focus on the differences between existing and new policy framework. Since the Peterborough SIB was launched in the UK in 2010, lots of people have become interested in this new concept. However, so far, there is no clear consensus about the SIB concept.

According to Social Finance (2011), SIBs are a form of financing that aligns investor returns with social outcomes investors only receive a return if the social outcome is achieved. Through this concept, the SIB can be defined as a kind of contract between the government and the private sector to pay compensation for the achievement of government-designated public project goals. The reason why the SIB is called a bond is because it has the character of a ‘conditional success payment bond’ that guarantees a rate of return in proportion to the success. In the case of an ordinary bond, the issuer pays the principal and interest to the bond-holder on expiry of the term, whereas the SIB is payable only if it meets the pre-contracted conditions.

According to McKinsey (2012), the SIB is a multi-stakeholder partnership in which philanthropic funders and impact investors – not governments –take on the financial risk of expanding preventive programmes that help poor and vulnerable people. According to this concept, the SIB is different from a commercial bond for profit, because it is a mechanism created by various stakeholders involved in the project, such as the government, investors and private organisations, to cooperate and solve specific social problems. This is similar to social policy to solve social problems with the participation of various stakeholders.

Fox (2013) said that SIBs are a form of payment by results that allows the financing of social outcomes via private investment. According to this concept, the SIB could be defined as one of social investment that leads social performance for social outcomes.

In this study, based on the concept defined above, we will define the concept of the SIB as the system in which social policy and social investment are connected throughfinancing. It is necessary to understand the relationship between the SIB and social policy, social investment and financing. We will compare and discuss these concepts below.

3.1.1. Social policy and the SIB

It can be seen that most SIB projects are in the social policy field and SIBs have social policy characteristics in terms of government policy executed through a contract between government and private service providers. Titmuss (1974) said that social policy is ‘the policy of governments with regard to action having a direct impact on the welfare of the citizens, by providing them with services or income’. According to the above concept, social policy has three components. The aim is welfare, the target is citizens and the means are service or income.

The SIB has the same components of these three aspects. First, the SIB has a clear government policy aim to achieve through the project, for example, reducing reoffending rates, promoting youth employment, returning children to their home and self-reliance oflow-income families. The SIB clearly targets citizens such as children, youth, immigrants and so on. Moreover, it also has the means to provide services through the private sector. The SIB meets this definition of social policy. Therefore, the SIB can be regarded as an instrument of social policy. However, the funding method of the SIB is social investment, which is different from existing social policy.

3.1.2. Social investment and the SIB

Bruyn (1991) said that social investors are interested in the impact of their investment on people as well as in making a profit. Morel (2012) said that the social investment approach rests on policies that both invest in human capital development and that help to make efficient use of human capital while fostering greater social inclusion. Therefore, social investment should be an investment in human capital, aid social integration and make a profit for investors.In other words, social investment should create social and financial value at the same time. However, the concept of social investment here is different from the concept of social investment by the government as expenditure on human capital and social services.

The history of social investment is difficult to find clearly, but according to Bruyn (1991), in 1967 the Ford Foundation, stimulated by a concern already being expressed by church and university leaders, announced that social investments would become part of its philanthropic programme. It hoped to increase the impact of its giving by making higher-risk, lower-return investments in minority businesses, housing and conservation project. Since then, social investment has grown a little in developed countries such as the US and the UK. In addition, the terms social investment and impact investment are used as having a similar meaning.

Until recently, almost all investments have been understood to be purely financial and the social sectors, such as NGOs and international development organisations, have been largely sustained by charity and government subsidy. However, social and impact investment starts with the perception that these funding method share difficult to sustain.

The participation of the private sector in social issues has been done by company charitiesand donations from individuals. However, impact investors have begun to pay attention to the social purpose of investment, and thus to the nature of SIBs’ social investment. Impact investors are given the opportunity to invest in certain social policies and if these policies produce certain social outcomes, they can earn a profit as the financial investors. Therefore, a SIB can be regarded as an area of social investment that simultaneously pursues financial profit and social performance.

3.1.3. Project financing and the SIB

We will discuss financing– the SIB’s financing method– as the link between the two SIB characteristics of social policy and social investment. A SIB’s financing method is not exactly the same as general project financing, but there are considerable similarities.

Project financing can be defined as the raising of funds on a limited-recourse or non-recourse basis to finance an economically separable capital investment project in which the providers of the funds look primarily to the cash flow from the project as the source of funds to service their loans and provide the return of and a return on their equity invested in the project (Finnerty, 2013). The SIB is similar to project financing in funding and rewarding the execution of a specific project. However, there is a difference in compensation. The SIB is based on the government’s compensation contract, but project financing, on the other hand, is based on future cash flows.

In the case of project financing, a legal and economically independent special purpose corporation is established. This is to isolate the stakeholders involved in the project from the cash flow or other responsibilities created by the project. Many SIB projects currently being implemented are established through contracts by establishing special purpose corporations.

The SIB’s funding method is similar to the concept and structure of general project financing, but it can be viewed as ‘social project financing’ because of the difference between the social purpose and the compensation method of the SIB. The nature of a SIB’s project financing needs to be understood as a benchmarking of the private sector’s market principles in funding for social policy implementation.

As we have seen above, the SIB is described as a social policy instrument in which the government gathers private investments that pursue social and financial revenues for the social services.

3.2. Structure of a social impact bond

3.2.1. Stakeholders of a SIB

Callanan (2012) wrote a review report for the US introduction of SIBs and summarised the operating structure of a SIB as shown in Figure 1. According to this report, the SIB consists of five stakeholder groups: government, investors, intermediary, non-profit service providers and constituents. The independent assessor and evaluation adviser play a subsidiary role in helping the SIB project be implemented fairly and correctly.

Figure 1. Structure of a SIB

Source: Callanan (2012), From potential to action: Bringing social impact bonds to the US

The characteristics of each stakeholder group are as follows. First, the government has a responsibility to solve complex social problems. Second, investors want to earn economic benefits while investing money in socially meaningful work. The intermediary is the delivery agency that oversees the entire project. Fourth, the service provider is an organisation with experience in the relevant work field. Fifth, constituents are the target population of a SIB project.

Investors who are sympathetic to the intent of the project provide funds in a way to purchase bonds issued by the intermediary. The intermediary allocates the funds provided by investors to the service provider as an operating expense, and the service provider provides the necessary services to the constituents with this fund. After the project is completed, the government makes the compensation according to the agreed standards, and the intermediary returns the principal and incentives to the investors.

3.2.2. Relationship between stakeholders

The relationship between the stakeholders involved in the SIB includes the relationship between the government and the intermediary, the relationship between the intermediary and the investors, the relationship between the intermediary and the service provider, the relationship between the service provider and the beneficiaries(constituents), and the relationship between the government and evaluation agencies (independent assessor). Most of the relationships between stakeholders are legal contracts.

The SIB is a way for the intermediary to contract with the government about the project, to attract investment from outside and to conduct the project with that fund. Therefore, the core of the contract between the government and the intermediary is the goal of the task to be performed by the intermediary and the standard of the refund provided by the government when it achieves that goal. The government can increase the budget efficiency because it does not have to immediately inject financial resources. Investors and the intermediary perform their duties faithfully to improve profitability, so high performance can be expected. On the other hand, it is difficult to attract investors because it transfers all or part of the risk to the intermediary and investors. It is good to be successful, but if it fails, investors can lose all of their funds.

The relationship between the intermediary and the investors is also contracted. The main content of the contract is that the investors provide project funding to the intermediary and receive the principal and incentive according to the performance achievement standard. It is necessary to clarify performance achievement standards and methods because the reward is dependent on the project achievement result.

The intermediary and service providers are also involved in contracts. It is the core content of the contract that the intermediary provides the service provider with the expenses for the project implementation, and the service providers deliver the service to the beneficiaries. Service providers are generally selected through an open recruitment process, and the intermediary has supervisory rights to the service providers.

Since the relationship between the service provider and the beneficiary is not a legal contract, it is not possible to impose a constraint on service provision. Therefore, generally, volunteer beneficiaries are recruited for the project. It is the service provider’s ability to make substantial changes by providing services to the beneficiaries.

The government contracts with an independent assessor to provide an objective assessment of the outcome of the project, which must obtain the consent of the intermediary. Since the assessment is directly related to the monetary compensation and is the most sensitive part of the SIB project, the assessor body should be composed of institutions or experts who can guarantee independence and fairness.

In addition, the government cannot interfere with the investors without the consent of the intermediary, because the government and investors have no legal relationship. It is also difficult for the government to interfere with service providers for the same reason. However, since the government has an interest in investor recruitment and compensation standards, it indirectly engages investors and service providers through the intermediary. For example, if a problem arises such as a fear of increasing social costs in the service provision process or the possibility of undermining the credibility of the government, it may include in the contract authority to require the intermediary to replace the service provider.

As we have seen above, the SIB is characterised by the involvement of various stakeholders. This characteristic of the SIB structure says that the government takes part in an innovative paradigm in which it is working with the private sector to solve social problems. However, if harmony and balance among stakeholders are not maintained because of conflicts of interest, the SIB may not have a good outcome. This means that the ability to share and collaborate on goals among stakeholders involved in the SIB project plays an important role in its success.

3.3. Strengths and weaknesses of the social impact bond

3.3.1. Strength of the social impact bond

It is necessary to expand welfare for the vulnerable people, but the government has problems such as lack of budget, insufficient efficiency, difficulty in evaluating policy performance and so on. SIBs have some capability to solve these problems, so they have been launched in many countries in the past few years. Kim (2012) said the strength of SIBs is as follows.

First, early intervention in the causes of social problems can prevent social and economic problems in advance. Looking at early intervention services through SIBs, there are lots of public services that can prevent social problems in advance, such as the prevention of criminal recidivism, workforce development, joblessness support, reduction in homelessness and so on.

Second, private organisations with expertise can be used to cope efficiently with complex social and economic problems, and the public and private sectors can expand cooperation. For example, if a SIB is applied to early childhood education policies and there is collaboration with private educational institutions, the efficiency of educational policies can be improved by using the educational know-how of private institutions, and effective policy implementation is possible through governance.

Third, it is possible to accurately evaluate social services and to implement effective policies, thus minimising the taxpayer burden due to the failure of public policy. The SIB has a structure that sets measurable indicators and provides principal and incentives according to the degree of indicator improvement after providing services for a certain period of time. Therefore, it is possible to carry out the policy through accurate result evaluation.

3.3.2. Risk or weakness of the social impact bond

SIBs also have several weaknesses in terms of structure. Social Finance (2012) presents the six risk factors that may arise during the execution of a SIB as follows.

First is the intervention model risk. If the selected intervention is not carefully designed, it may fail to produce the expected social outcomes, for example, inaccurate goal-setting, lack of understanding of the target group, lack of budget, inappropriate selection of service provider and so on.

Second is the execution risk. Problems can occur if there are unclear lines of authority, poor communication among multiple participants, lack of follow-through by one or more partners, or failure to capture timely and reliable data on progress.

Third is the intermediary risk. This is a risk that the intermediary cannot play its role as a general manager. The intermediary that failsto commit to SIBs over the long term, either due to changing internal priorities or weak financials or governance, exposes SIBs to greater risk.

Fourth is the political risk. This is the case where the project is cancelled due to change of government policy related to the SIB, or the government cannot compensate the financial deficit despite the successful achievement of the project’s goals.

Fifth is the financial risk. This is the risk that the investor group suffers losses due to failure of the SIB project.

Lastly is reputational risk. This occurs when the SIB project has failed and a bad reputation and image is formed in the market, which makes it difficult to carry out further projects in the future.

These risks are fundamental elements inherent in the SIB, and they are fundamental risks that cannot be avoided even if the project is promoted in any certain area.

4. Status Analysis of SIBs in the World

According to Social Finance (2018), 108 SIB projects had been implemented or completed in 24 countries by February 2018, had attracted a total of $392m investment and provided services to more than 700,000 people. This is the result eight years since the first SIB, which was launched in Peterborough, England in 2010. Appendix A summarises the list of SIBs around the world by February 2018, referencing Social Finance’s database.

4.1. Numerical analysis

In 2010, the first SIB, to reduce the recidivism of prisoners leaving Peterborough prison, was launched in the UK. In 2012, 13 SIB projects for NEETs and children in care were launched in the UK. In 2013, there were eight SIBs in the world: two projects for reducing recidivism in New York City, one project for education in Salt Lake City, two projects for child welfare in New South Wales, two projects for youth unemployment in the Netherlands and Germany, and one project for the theme of adoption in the UK. In 2014, three projects in the US, two in the UK, one in Belgium and one in Canada were launched.

Since then, the rate of expansion of SIB projects has accelerated: 25 new projects in 2015, 19 new projects in 2016, and 34 new projects in 2017. In addition, 17 countries have introduced the first SIB projects in their countries since 2015. Table 1 summarises the number of SIB projects.

Table 1. Number of SIBs

	2010	2011	2012	2013	2014	2015	2016	2017	2018.2
Number of SIBs	1	0	13	8	7	25	19	34	1
Number of countries	1	0	1	5	4	10	8	15	1
Number of new countries	1	0	0	4	2	7	2	8	0

4.2. Country analysis

The UK is the country with the largest number of SIB projects, with a total of 40 projects implemented or completed. Next is the US, with a total of 20 projects. Australia and the Netherlands have eight projects, respectively, and Canada and Portugal have four projects respectively. SIBs were introduced in the remaining 18 countries, and a total of 24 countries have introduced SIBs. In particular, the US, the fastest-growing country, launched 12 new SIB projects in 2016 and 2017. Table 2 shows the SIB project status by country.

Table 2. SIB project status by country

	2010	2011	2012	2013	2014	2015	2016	2017	2018	Total
UK	1	0	13	1	2	13	1	8	1	40
US	0	0	0	3	3	2	7	5	0	20
Australia	0	0	0	2	0	0	2	4	0	8
Netherlands	0	0	0	1	0	3	3	1	0	8
Germany	0	0	0	1	0	0	0	1	0	2
Canada	0	0	0	0	1	0	3	0	0	4
Belgium	0	0	0	0	1	0	0	0	0	1
Portugal	0	0	0	0	0	1	0	3	0	4
Peru	0	0	0	0	0	1	0	0	0	1
Switzerland	0	0	0	0	0	1	0	0	0	1
India	0	0	0	0	0	1	0	1	0	2
Austria	0	0	0	0	0	1	0	0	0	1
Israel	0	0	0	0	0	1	1	0	0	2
Finland	0	0	0	0	0	1	0	1	0	2
Sweden	0	0	0	0	0	0	1	0	0	1
South Korea	0	0	0	0	0	0	1	1	0	2
France	0	0	0	0	0	0	0	2	0	2
New Zealand	0	0	0	0	0	0	0	1	0	1
Colombia	0	0	0	0	0	0	0	1	0	1
Japan	0	0	0	0	0	0	0	3	0	3
Congo	0	0	0	0	0	0	0	1	0	1
Cameroon	0	0	0	0	0	0	0	1	0	1
Total	1	0	13	8	7	25	19	34	1	108

The UK launched a number of SIB projects in 2012 and 2015, via the Department for Work and Pensions (DWP), which introduced 10 projects related to NEETs based on the Innovation Fund (Burrowes, 2017), and the Department for Communities and Local Government (DCLG) and the Cabinet Office, which introduced seven projects related to homelessness based on the Fair Chance Fund (Tsukamoto, 2017).

The regional scope is also expanding. In the past, many SIB projects were implemented in Europe, North America and Australia. However, Asian countries such as Korea in 2016 and Japan in 2017 have introduced SIBs, and African countries such as Congo and Cameroon introduced SIBs in 2017. South American countries such as Peru and Colombia also launched SIBs in 2015 and 2017. According to Social Finance (2018), a number of South American countries, such as Brazil, Chile and so on, are planning to start the first SIBs in their countries.

4.3. Issue analysis

As shown in Table 3, the majority of SIB issues are for workforce development: a total of 36 projects. This is the reason why, as we mentioned above, the UK’s DWP implemented 10 projects based on the Innovation Fund. The next largest number is 19 issues for homelessness, 18 for health, 15 for child and family welfare, 11 for criminal justice, eight cases for education and one for the environment.

On the whole, there have been 88 issues in the areas of social welfare, such as workforce development, homelessness, health, and child and family welfare. This would be because the policy goal of promoting employment opportunities for vulnerable groups is to meet the SIB goal of reducing the government budget burden. There are also 11 cases related to criminal justice because many countries would have chosen the same theme to benchmark the success of the Peterborough project.

Table 3. Issue area of SIBs

Issue Area	Number of SIBs
Workforce development	36
Homelessness	19
Health	18
Child and family welfare	15
Criminal justice	11
Education	8
Environment	1
Total	108

4.4. Result analysis

According to Social Finance’s (2018) presentation, the results of performance are positive. So far, 108 projects have been launched and a total of 27 projects were completed. Among those that were completed, 16 projects were deemed to be a success, and 10 projects were not reported. Just one project was reported to be a failure: the US’s first SIB project for juvenile recidivism in New York City. Success here means that investors have been financially rewarded for achieving certain goals. According to GlobeNewswire (2018), 10 SIBs have reported a full capital return following successful positive outcomes. Table 4 shows the result status of SIBs.

Table 4. Result status of SIBs

	Completed				Implemented	Total
	Success	Failure	Unreported	Subtotal
Number of SIBs	16	1	10	27	81	108

5. Case Study

5.1. South Korea –Seoul City Government SIB

5.1.1. Target group

The first SIB project in Seoul is an education project for 100 children who have Borderline Intellectual Function (BIF) and who live in child welfare facilities (group homes). Karande (2008) said that children with BIF (‘slow learners’) have an intelligence quotient (IQ) in the range of 71 to 84. BIF children are not classified as intellectual disabled. However, BIF children are 15 times more likely to be on welfare payment than normal children when they leave child welfare facilities and if they are neglected without appropriate measures, they are more likely to have mental health problems, which could lead to significant social costs throughout their lifetime as well as a deterioration in their quality of life (Seoul City Government, 2016). The more serious problem is that the number of such children is estimated to be about 800,000 in South Korea however, there is no accurate investigation and no legal or institutional support (EBS, 2014). Many children with BIF experience emotional anxiety, bullying, poor learning and social maladjustment. However, these are not recognised as disabilities, so they are left in a blind spot without special education or programmes for them.

The child welfare facilities that are the object of the SIB project in Seoul are the homes that provide shelter for children who need social protection. They consist of two care teachers and five to seven children per house. In the case of children with BIF living in child welfare facilities, they are alienated from family support. Seoul City Government’s plan is to provide them with appropriate intervention programmes to improve their social and intellectual abilities during the three years of the SIB project.

There were two reasons why the Seoul City Government selected the SIB subject as an educational project for children with BIF who live in welfare facilities. The first is to pursue the proactive public interest value concerning the high future social cost if such children are neglected. The second is to pursue the private interest value –the revenue in the company –that could measure the result quantitatively and objectively, so that it could be compensated according to the result level.

There were many discussions during the introduction of the SIB project by the Seoul City Government, and it had been pointed out that testing the IQ of children in welfare facilities is a violation of their human rights. In order to overcome these problems, the Seoul City Government promoted the project with the human rights watchdog.

5.1.2. Programmes for children

The SIB project in Seoul provides five programmes for children with BIF: improving cognitive ability, learning support, language development support, psychotherapy and sociability improvement (Seoul City Government, 2015).

First, the cognitive ability improvement programme enhances intellectual ability and basic learning abilities such as memory, attention, expression of thoughts and so on. This programme will provide training or treatment that can promote the development of cognitive function. Through this programme, children could live a normal life when they become an adult.

Second, the learning support programme provides children sufficient time to practise repeatedly, and it could help children who are slow to learn to attain academic success. BIF children need to be taught in a slow and repetitive manner, different from normal children and students, and teachers need to learn one-to-one.

Third, the language development support programme provides listening and speaking skills training in the real situations such as at school, at home and so on. BIF children tend to have poor language abilities compared with other children, so they find it difficult to make friends and can sometimes experience bullying. They will learn conversational skills according to individual situations, so that they can make good relationships with friends and others.

Fourth, the psychotherapy programme provides basic emotional needs and factors affecting emotional development, and it could provide an opportunity to adequately fulfil such basic needs. BIF children often receive emotional hurt from the people around them, and it is necessary for them to receive psychological support because they sometimes are traumatised as a result of such bad experiences.

Fifth, the sociability improvement programme introduces various group activities such as camps, recreational activities in order to make interactions among people and to recover their problem-solving skills. Through this programme, children can explore the strengths and interests in their mind. This programmedoes not teach the child individually, but is carried out together with other children in the group home.

5.1.3. Project structure

The Seoul City Government made a contract with the intermediary as a general coordinator for the project, and the intermediary recruited the private investors and selected service providers. When the project is finished, the independent evaluation agency will make a professional and objective assessment of the project’s performance. If the project is successful, Seoul City Government will pay back the project fund and incentives. The SIB structure in Seoul City Government is shown in Figure 2.

The Seoul City Government planned to select the intermediary through open recruitment in order to ensure fairness. As a result, Pan-Impact Korea (PIK) was selected as the intermediary and there is a contract between the Seoul City Government and PIK.

Figure 2. Structure of the Seoul City Government SIB

Source: Pan-Impact Korea(2018),①Seoul Launches the First Social Impact Bond in Asia via Pan-Impact Korea

PIK gathered investors through open recruitment after signing the contract with Seoul City Government and three funders are participating in this project: People & Peace Link (non-profit organisation), UBS Bank in Seoul and Merry Year Social Company. Uniquely, the bank, a profit-making company, has participated in the project as an investor. South Korea had not introduced the SIB as a government policy paradigm at that time. Therefore, many people often understood the SIB as a donation, rather than an investment. Despite this, the commercial company UBS Bank decided to participate in the project as an investor for economic profit.

PIK also selected DAEKYO Consortium as the service provider this company is famous for its child education programme in South Korea. Sunkyunkwan University was selected as an independent evaluator. The selection of an evaluation institution was jointly promoted by the Seoul City Government and PIK because it required an independent organisation to fairly evaluate the success of the project.

5.1.4. Agreed goals

Seoul City Government (2015) announced that the aims of the SIB are to improve the intellectual and social ability of BIF children, so that they can be self-reliant, and to reduce social maltreatment.

For these aims, the Seoul City Government and PIK agreed two indicators: first the IQ level, as a quantitative indicator to check intellectual ability improvement, and second the Teacher’s Report Form (TRF) level, which is a qualitative indicator to check social ability improvement. The Korean Wechsler Intelligence Scale for Children-IV (K-WISC-IV) was used to measure the IQ level.

The conditions for success were that the IQ level of target children should rise above 84 and the post-TRF level should have improved abovethe pre-TRF level. The principal and incentives will bepaid differently depending on the success rate.

The Wechsler Intelligence Scale for Children (WISC) was created by David Wechsler in 1949 and it is famous for testing the intelligence of children aged from six to 16. Flanagan (2017) said that despite all the innovations and exemplary quantitative and qualitative characteristics of new and recently revised intelligence tests, the Wechsler scale continues to reign supreme. K-WISC-IV is a Korean intelligence testing tool based on the child intelligence test produced by David Wechsler and standardised by Kwak et al in South Korea in 2001.

Kwak (2011) said that K-WISC-IV is composed of two indexes: the Verbal Comprehension Index (VCI) and the Perceptual Reasoning Index (PRI). The VCI is related to the language ability of the child and measures the similarity of words, vocabulary, comprehension andso on. The PRI is related to the behaviour of the child and measures block design, matrix reasoning, picture completion and so on. K-WISC-IV provides the IQ score that represents the overall cognitive ability of the child.

The TRF is a standardised tool for teachers to assess the student’s adjustment status and problem behaviours, to understand how a child behaves in a place other than home. Achenbach (2001) said that the TRF is a teacher-reporting measure that assesses problem behaviour and can identify eight syndromes. It also assesses academic performance and adaptive functioning.

The TRF can be useful to assess how a child’s problem behaviours look at the school, to identify problems early and to understand patterns of behaviour seen in children in various settings. This is the indicator that actively reflects the opinion of the evaluator, who can widely evaluate the problem behaviour, the adaptation status and the social ability of the child, so it could be an appropriate tool to match up with the Seoul City Government’s SIB aim – the social ability improvement of children.

5.1.5. Revenue structure

The SIB project in Seoul is promoted with no principal guarantee. In principle, the incentive is given if the performance is above a certain level, but if thatis not achieved, the entire amount of the principal invested can be lost. Private investors are investing 1.11bn Korean won – approximately £0.74m– in this project for three years to educate children with BIF to improve their social and intellectual ability.

If the number of children with an IQ above 84 is more than 42%, the project will be regarded as a success. In this case, the Seoul City Government will pay back the principal and 30% incentives to the private investors. However, if the number of children with an IQ above 84 is less than 10%, it will be regarded as a failure and no principal will be paid at all. If the number of children with an IQ above 84 is between 11% and 41%, the Seoul City Government will return a certain percentage of the principal and incentive proportionally. This can be summarised in Table 5 below.

Table 5. Revenue structure of the Seoul SIB

Success %	Revenue rate on principal	Reference
x ≦10%	- 100%	100% loss of principal
10% < x < 31%	-68.8% ~ -3.1%	Loss of principal proportionally
31% ≦x ≦33%	0%	100% return of principal
33% < x < 42%	3.1% ~ 30%	100% return of principal, Proportional return of incentive
42% ≦x	30%	100% return of principal, 30% return of incentive

Source: Seoul City Government (2015).The Seoul City Government introduced the first welfare business model ‘pre-private investment, post-public compensation’

5.2. The UK–Innovation Fund SIBs for NEETs

5.2.1. Target group

In 2011, the UK Government noticed a steady increase in the proportion of NEETs (youth unemployed and unwilling to seek employment) among young people up to the age of 24, and it has designed 10 SIBs to prevent youths from vulnerable classes from falling into NEETs through the Innovation Fund. NEET is an acronym for Not currently engaged in Education, Employment or Training, which refers to a person who does not have any job training, even if they have completed compulsory education. According to Kraus (2008), the acronym originated in the UK and first emerged in Bridging the Gap (1999), a Cabinet report.

Ten projects, called the DWP Innovation Fund SIBs, were launched in two rounds in 2012 and lasted for a three-year period. Services were provided for approximately 16,000 vulnerable youth in 10 regions, including London, Birmingham and so on. Table 6 shows the status of 10 projects by region and population.

Table 6. Regions and population of DWP Innovation Fund SIBs

	Project name	Regions	Target populations
Round 1 (April 2012)	Living Balance	Perth and Kinross, Scotland	300
	The Advance Programme	Birmingham and West Midlands	2,897
	Think Forward	Shoreditch, East London	740
	New Horizons	Greater Merseyside	3,900
	Links for Life	Stratford and Newham, East London	1,050
	Nottingham Futures	Nottingham	3,000
Round 2 (November 2012)	Prevista	West London	800
	Capitalise	Cardiff and Newport	720
	Teens & Toddlers	Greater Manchester	1,100
	Energise	Thames Valley and South East England	1,500

Source: Social Finance (2018). Impact Bond Global Database

5.2.2. Objectives and programmes

According to the DWP (2012), the Innovation Fund had three overall objectives. The first one was to ‘deliver support to help young people who are disadvantaged or at risk of becoming disadvantaged, in order to improve their employ ability and therefore reduce their longer term dependency on benefits’. Based on this objective, the 10 SIBs planned were designed for vulnerable youth to reduce their dependency on government welfare services in the future by increasing self-reliance through education and employment skills.

However, as each SIB service provider was selected through individual bidding, the 10 SIBs had slightly different programmes. Table 7 reconstructs the major programmes of the 10 projects by referring to the report that was made by Thomas (2014).

Table 7. Programmes of Innovation Fund SIBs

Project Name	Programmes
Living Balance	Confidence building, employment placement in social enterprise, link to employer
The Advance Programme	Link to Birmingham Employment Skills and Training (BEST) network members
Think Forward	Intensive coaching and employment mentoring in groups and one-to-one, activities and links to training and to employers
New Horizons	One-to-one coaching, mental toughness training, signposting to provision, access to ring fenced job interviews and links to employers
Links for Life	Crisis support, intense coaching, signposting and brokerage using community hubs
Nottingham Futures	Advice, coaching/signposting to specialist services/apprenticeships agency
Prevista	For young people with offending history and involving in gang activity: social skills, prison reality workshops, education and work integration programmes
Capitalise	Cognitive behavioural approach, three levels of intensity of intervention,mentoring, study skills, literacy support, small group motivational work
Teens & Toddlers	QCF entry-level qualification for 14 and 15-year-olds with toddlers in a nursery, participants meet facilitators monthly and focus on their work in school
Energise	One-to-one mentoring at motivational residential

Source: Thomas (2014), Innovation Fund Pilots Qualitative Evaluation: Early Implementation Findings

Even though there was a difference in the programme for each individual project due to the different service providers, we could find some similarities.

The first was to improve the confidence of the youth in the programme. NEETs are often depressed because of their experience of failure, so it was necessary to heal them psychologically and increase their confidence in social relations. The confidence building programme in the Living Balance project, mental toughness training in New Horizons and the cognitive behavioural approach in Capitalise were representative examples.

The second was to link jobs. Service providers gave opportunities for young people to work in local communities and businesses, and provided advice and mentoring to support their job search. The employment placement in social enterprise programme in Living Balance and the link to Birmingham Employment Skills and Training (BEST) network members’ in the Advance Programme were representative examples.

5.2.3. Revenue structure

According to a report released by the DWP(2012), the Innovation Fund invested a total of £30 million in 10 SIB projects to support NEETs. Investors could receive a payback of up to £8,200 per person in the Round 1 projects and £11,700 in the Round 2 projects if they achieved a certain number of goals. The maximum payment rates for agreed outcomes are shown in Table 8.

Table 8. Maximum payment rates in Innovation Fund SIBs

Maximum outcome payment (£)
Outcome measure (indicator)	Round 1	Round 2
Improved attitude to school/education	none	700
Improved school attendance	1,300	1,400
Improved school behaviour	800	1,300
Qualifications and Credit Framework-accredited Entry Level Qualification	none	900
Basic skills	none	900
First Level 1 National Qualifications Framework (NQF) Qualification	700	1,100
First Level 2 NQF Qualification	2,200	3,300
First Level 3 NQF Qualification	3,300	5,100
First Level 4 NQF Qualification or above	2,000	none
English for Speakers of Other Languages	1,200	none
Entry to first employment (13 weeks)	2,600	3,500
Entry to first employment (26 weeks)	1,000	2,000
Cap per individual young person	8,200	11,700

Source: Thomas (2014), Innovation Fund Pilots Qualitative Evaluation: Early Implementation Findings

We can analyse the indicators in three different ways. The first are the school-related indicators. By improving school attendance and school behaviour, young people could be provided with opportunities to receive an education and increase their possibility of finding a job in the future.

The second is the achievement-related indicators. These are represented by National Qualifications Framework (NQF) or Qualifications and Credit Framework. The NQF is a credit transfer system developed for qualifications in England, Wales and Northern Ireland (UNESCO-UNEVOC, 2018). They are assessment tools that encourage young people to achieve a certain level of academic achievement beyond simply participating in the programme.

The third is employment-related indicators. These are directly related to the final goal of the project: to reduce dependency on government welfare services in the future. In particular, these were designed with two different amounts of compensation that divided the period into 13 weeks and 26 weeks to encourage continuous employment.

5.2.4. Project results

The implementation of 10 SIB projects was completed and compensations were also completed. The specific figures of goals and achievement were not revealed, but the UK Government said that individual projects had met or exceeded their goals. Griffiths (2016) said that project deliverers, investors and intermediaries perceived the pilots to have been a great success, with targeted numbers of outcomes met or exceeded and investments largely repaid to social investors.

Although the UK Government did not disclose details of performance compensation, in order to investigate whether the three-year implementation of the project has been effective, a total of 100 young people who joined each project were interviewed in October 2014 and January 2015, so we can guess the effect of the projects through these interviews.

At the time of the projects’ start, all interviewees had learning difficulties due to dyslexia or autism, or had behavioural problems due to attention deficit disorder (ADD) and Asperger’s syndrome. Some were also suffering from various problems such as alcoholism, drug addiction, criminal participation and single parenting.

However, at the end of the project, about 70% said that they were attending secondary or higher education, and the rest said they were working in full-time or part-time jobs, or working as interns. This response showed that they had entered a much better environment than before the projects started.

In addition, most of those interviewed evaluated the SIB projects of the Innovation Fund positively, and said that they had experienced major changes in their attitudes towards problems, interpersonal relations, family relations and employment opportunities through the projects. This means that not only self-reliance but also mental health improvements had been achieved.

5.3. Other European countries – SIBs for migrants and refugees

The current civil war in the Middle East and the political problems in African countries are becoming major causes of refugees. The emergence and movement of these refugees is causing global problems. According to a report by the United Nations High Commissioner for Refugees (UNHCR, 2016) on 19 June 2017, over the past two decades the global population of forcibly displaced people has grown substantially from 33.9 million in 1997 to 65.6 million in 2016. According to a Eurostat news release (2016), 1,255,600 first-time asylum seekers applied for international protection in the member states of the European Union (EU) in 2015, a number more than double that of the previous year.

In order for immigrants or refugees to be settled in new countries, they have various needs such as language skills, a job, cultural understanding, legal support, healthcare, housing and so on. Among these, the most important issue is employment. When they get a job and earn a stable income, they can settle down naturally. However, they have a lot of trouble getting a job. The UK Refugee Council (2018) said:

We understand the barriers refugees face in trying to access work in the UK. Despite having full permission to work, issues like a lack of understanding of the systems and working culture in the UK, as well as a lack of experience and networks can present a huge obstacle in progressing towards paid work.

Many countries are aware of this problem and are implementing various immigrant employment support policies. The UK also gives support for migrants and refugees to get a job: one-to-one meeting, expert advice and support, help with job search, work experience opportunities and so on(Refugee Council, 2018).

Despite these efforts, refugees or immigrants face more difficulties in their employment than native people. Several countries have launched SIB projects to meet the policy objective of increasing employment for these refugees and migrants. We will introduce three European country cases – Finland, Switzerland, Belgium – based on the Social Finance Database to provide an idea for countries that are experiencing difficulties with migrant and refugee unemployment. Table 9 shows the SIBs for migrants and refugees.

Table 9. SIBs for migrants and refugees

	Finland	Bern	Brussels
Launch date	June 2017	June 2015	April 2014
Duration	7 years	5 years	3 years
Target group	2,500 - 3,700 people	120 people	180 people
Investment	€10m	CHF0.27m	€0.23m
Max return	€11m	CHF0.29m	€0.29m
Investors	The European Investment Fund (EIF)	Unreported	Unreported
Intermediary	SITRA	Invethos AG	Kois Invest
Service provider	Epiqus Ltd	Caritas Bern	Duo for a Job

Source: Social Finance (2018). Impact Bond Global Database

5.3.1. Finland

According to the Ministry of Economic Affairs and Employment in Finland (2017), unemployment of immigrants has been two to five times higher than that of the native population, and it takes much longer for them to enter the labour market. To ensure steady economic growth in Finland, the government introduced the SIB project to support immigrant employment in 2017. This project is aimed at over 2,500 immigrants over seven years.

The main content of this project is that immigrants acquire specific skills and stable jobs. Therefore, target industries are defined: manufacturing, building, trade and services. Immigrants will receive customised training in each area. The maximum return on the project is set at 10%. The detailed revenue structure was not announced.

5.3.2. Bern, Switzerland

During 10 years living in Switzerland, 50% of refugees and 70% of temporary permit holders were in receipt of state social benefits. They also had difficulty adapting to society and the labour market. To overcome this problem, the Bern Department of Health and Welfare launched the first Swiss SIB project for their employment and social integration in 2015. The target group was 120 migrants and refugees who lived in Bern.

The current employment rate of these people is 20-40%, so the project aimed to increase the employment rate to 50-60% over the next five years (Heiko, 2015). Service providers give them career coaching, language training, a conflict resolution service and so on. If the aim is achieved after five years, investors will receive an incentive up to 1.5%, and if it fails, they will receive a penalty up to 1.5%.

5.3.3. Brussels, Belgium

Brussels had pursued a policy of attracting many immigrants. However, the employment rate in this area was not very good. According to the Brussels Institute for Statistics and Analysis (BISA, 2012), the city showed a high unemployment rate of 17.4% in 2012. Moreover, a social integration policy for immigrants was also needed. To solve these problems, the Brussels Employment Agency started the SIB project for 180 migrants who live in Brussels in 2014.

Service providers helped them connect with local networks and find suitable employment opportunities. This SIB’s aim is that the employment rate improvement of the intervention group is higher than another group who did not receive any other services. If the improvement of employment rate is 0-10% more than another group, the principal will be paid back from 0-100% proportionally. If this rate is more than 10%, an additional incentive will be given of up to 6%. The project ended in 2017, but the results have not been announced yet.

6. Comparison Between the UK and South Korea

6.1. Legal basis

6.1.1. The UK

The UK does not have a law directly defining SIBs, but the Public Services (Social Value) Act 2012 is the indirect basis of the SIB. The Act regulates that the authority must consider how what is proposed to be procured might improve the economic, social and environmental wellbeing of the relevant area (The National Archives, 2018). The Act is not a SIB-specific measure, but it has a legal basis and support role when the government implements the SIB process, such as open recruitment and contracts within theprivate sector.

Moreover, the Social Investment Tax Relief Statement, a tax benefit measure for social investors, is being implemented to provide tax benefits to SIB investors in 2016. Under the Statement, SIB investors can receive 30% tax relief benefit if they continue to invest for more than three years. (UK Government, 2016).

6.1.2. South Korea

In the case of South Korea, the Seoul City Government and Gyeonggi Province Government enacted direct ordinances for SIB projects. The Seoul City Government enacted the Social Impact Bond Operation Ordinance in 2014 and Gyeonggi Province Government enacted a similar ordinance in 2015. However, while legislation for SIBs has been enacted at the local government level, but no legislation has yet been enacted at the central government level.

There is no legal basis yet at the central government level. However, the Ministry of the Interior and Safety, the central government organisation, issued the SIB Implementation Guide in 2017. The main content of the guide is how local governments should implement SIB projects.

6.2. Government organisations and funds

6.2.1. The UK

The UK promotes and supports SIB projects at the level of central and local government. At the central government level, various departments raised funds to support the SIBs. According to the UK Government’s website (2018), a total of seven funds were raised for SIBs: Life Chances Fund, The Rough Sleeping SIB Fund, Fair Chance Fund, Youth Engagement Fund, Social Outcomes Fund, Commissioning Better Outcomes Fund and Innovation Fund. A total of 31 SIBs in the UK were supported by these funds (see Appendix B). The status of funds and organisations is shown in Table 10.

Table 10. Funds and organisations for SIBs in the UK

Fund name	Objective	Operating organisation	Amount	Launch date	No of SIBS (duplicate included)
Life Chances Fund	To help people who face the most significant barriers to leading happy and productive lives	Department for Digital, Culture, Media and Sport	£80m	July 2016	-
The Rough Sleeping SIB Fund	To help long-term rough sleepers with the most complex needs	Department for Communities and Local Government	£10m	October 2016	-
Fair Chance Fund	To improve outcomes for young homeless people	Department for Communities and Local Government and Cabinet Office	£15m	February 2014	7
Youth Engagement Fund	To prevent young people aged 14 to 17 from becoming NEETs	Department for Work and Pensions	£16m	July 2014	4
Social Outcomes Fund	To support the development of SIBs in a range of policy areas	Cabinet Office	£20m	July 2013	13
Commissioning Better Outcomes Fund	To support the development of SIBs in a range of policy areas	Big Lottery Fund	£40m	July 2013	6
Innovation Fund	To support disadvantaged young people, and those at risk of disadvantage, aged 14 years and over	Department for Work and Pensions	-	-	10

Sources: UK Government website (2018). Guidance, Social Impact Bonds.

Appendix B. Outcomes Funders of the UK SIBs

In the UK, SIBs have been actively carried out at the local authority level. Some projects, such as in Brent and Essex, were conducted by local authorities. In particular, the projects that were implemented using the Social Outcomes Fund were planned to be carried out by local authorities and central government. Ainsworth (2012) described the relationship between central and local governments on the Social Outcomes Fund: ‘The fund will offer a matching element to allow bodies such as local authorities and health trusts to commission a payment-by-results contract in partnership with government.’

The UK Government also established the Centre for SIBs in 2012 as part of the Office for Civil Society at the Department for Digital, Culture, Media and Sport to facilitate large-scale SIB projects and launched the Government Outcomes Lab with Oxford University in 2016 to support academic research and practitioner engagement (UK Government website, 2018).

6.2.2. South Korea

No SIB projects are presently being carried out by the central government in South Korea. Therefore, there is no central government fund for SIBs. The Ministry of the Interior and Safety (MOI) could simply be understood as an organisation of central government for managing SIBs because it issued the SIB Implementation Guide in 2017. However, according to Article 34 of the National Government Organisation Act in South Korea, the function of this ministry is to support the local government, so it does not implement any SIB projects on its own (see http://www.law.go.kr/lsInfoP.do?lsiSeq=193440&efYd=20171019 # 0000). In addition, the contents of this guide only focus on the implementation of SIB projects at the local government level.

At the local government level, there has been an active movement about SIBs. There are two SIB projects currently implemented at the local government level in South Korea. One is the Seoul City SIB related to child education, launched in 2016, and another is Gyeonggi Province’s SIB related to escaping life on welfare benefits, launched in 2017. There are also organisations related to SIBs in two local governments. According to PIK LLC (2018), the Seoul City Government formed a local government council in 2016 to spread the SIB paradigm to other local governments. The Gyeonggi Province Government also has a SIB-supporting organisation – Gyeonggi Welfare Foundation – which planned its SIB project in 2015. However, the projects of these two local governments are guaranteed through their budget, because they did not raise sufficient funds.

6.3. Contract Method

6.3.1. The UK

The UK has launched 40 SIBs, of which 23 were implemented through multiple contracts and 17 were implemented with individual contracts. Multiple contracts mean that the government commissioner launches several projects and recruits intermediary or service provider on the basis of the same standards.

The reason why many projects have been implemented with multiple contracts was because the projects had been carried out using government funds. In detail, 10 SIBs were done by the Innovation Fund, seven by the Fair Chance Fund, and four by the Youth Engagement Fund. In addition, two SIBs were launched with multiple contracts to support rough sleepers in London.

In the early years of SIB implementation, the UK expanded the project through these multiple contracts and, recently, many projects have been conducted through individual contracts based on the Social Outcomes Fund or the Commissioning Better Outcomes Fund. The contract methods of each are summarised in Appendix B.

6.3.2. South Korea

In the case of South Korea, both Seoul City and Gyeonggi Province started SIBs on the basis of ordinance by local government, and signed a contract with an intermediary by individual contract. The reason for the individual contract was that there were no funds for SIBs and two projects had the characteristic of pilot projects. In addition, the regional scope was limited to the local government level rather than at the central government level.

6.4. Investor Types

6.4.1. The UK

Most of the SIB investors in the UK were social finance and NGOs. By investor type, social finance participated in 32 SIBs as investors and NGOs participated in 17 projects as   investors. Individuals, public bodies and private companies were also involved in the projects as investors. As shown in Table 11, most of the investment funds came from social financial institutions and NGOs.

Table 11. Investor types of UK SIBs

	Social finance	NGO	Individual	Public body	Social enterprise	Private company	N/A
Number of SIBs (duplicate included)	32	17	5	4	3	2	1

Source: Social Finance (2018). Impact Bond Global Database/each investor’s website (see Appendix C)

6.4.2. South Korea

A variety of investors participated in South Korea SIBs. In the case of Seoul, an NGO, a social enterprise and a private company were involved in the project as investors. In the case of the Gyeonggi SIB, a social enterprise and individual investors participated in the project. In particular, it is interesting that a foreign securities company was participated in the Seoul project as an investor. Table 12 shows the investor types of South Korean SIBs.

Table 12. Investor types of South Korea SIBs

Launch date	Location	Project name	Investors	Investor type
2017	Gyeonggi Province	HaeBom Project	-Dasomi Foundation -Individual investors -Crowd-funding	-Social enterprise -Individual -Individual
2016	SeoulCity	Children’s Group Home SIB	- People & Peace Link -UBS Securities Pte. Ltd, Seoul branch -Merry Year Social Company	-NGO -Private company -Social enterprise

Source: Pan-Impact Korea LLC. (2018) ① / Gyeonggi Daily. (2017).

6.5. Issue Area

6.5.1. The UK

Of the 40 SIBs implemented in the UK, 15 were related to workforce development and 12 were related to homelessness. Six cases of child/family welfare and five cases of health issues followed. These were due to multiple contracts made through government funds: Innovation Fund, Fair Chance Fund and so on. We can also infer that the UK Government is very interested in the self-reliance and homelessness problems of people living in poverty and it regards cooperation with the private sector as important for solving these problems.

6.5.2. South Korea

In the case of Korea, the Seoul SIB was to carry out an education programme for group home children to improve social and intellectual abilities, so that it makes them have a confidence and self-reliance. Gyeonggi SIB was a programme to provide stable job opportunities to basic living recipients through job training. Although many projects have not been implemented in South Korea, it could be inferred that the policy direction of the government is to support the independence of people with difficulties. Table 13 shows the SIB issue areas of the two countries.

Table 13. Issue areas of UK and South Korean SIBs

	Workforce development	Homelessness	Child and family welfare	Health	Criminal justice	Education	Total
The UK	15	12	6	5	1	1	40
South Korea	1	-	-	-	-	1	2

Source: Social Finance (2018). Impact Bond Global Database

6.6. Socioeconomic background

6.6.1. The UK

David Cameron announced the Big Society policy when he took office as prime minister in 2010. The point of this policy was that central government cannot solve all social problems, so that private sector must play its role. He gave a speech on 19 July 2010 as follows:

We’ve got to get rid of the centralised bureaucracy that wastes money and undermines morale. And in its place we’ve got to give professionals much more freedom, and open up public services to new providers like charities, social enterprises and private companies so we get more innovation, diversity and responsiveness to public need.

(See https://www.gov.uk/government/speeches/big-society-speech)

Based on this trend, the world’s first SIB project was launched in Peterborough in 2010 and Big Societal Capital (BSC) was launched to help social investment finance intermediaries in 2012. According to BBC News (2012), Big Society Capital has £600m, of which the majority comes from unused cash in bank accounts that had been dormant for more than 15 years. The size of BSC’s funding continues to grow. In addition, the Social Value Act was established in 2012 to indirectly support SIBs and the government had started to raise funds. As a result, on this socioeconomic basis, the UK could significantly expand its SIB projects.

6.6.2. South Korea

Compared to the UK, where the social financial market was established, the South Korean market does not form a large scale. According to the Ministry of Strategy and Finance in South Korea (2018), social finance in South Korea is at an early stage. It is carried out by small/medium-sized companies and supporting poor people little by little.

7. Problems and Recommendations for South Korea

7.1. Problems of South Korea

7.1.1. Lack of socio-cultural understanding

South Korea has been developing a free market economy system since the Second World War. However, recently, various social problems, such as income disparity and youth unemployment and so on, have arisen and the government has faced the realisation that it cannot solve all social problems on its own. In order to overcome these problems, the proposed alternative is the social economy concept.

According to the European Commission (2018), social economies include cooperatives, mutual societies, non-profit associations, foundations and social enterprises. In particular, the development of social finance to promote such a social economy is important to expand SIBs.

The South Korea Government has made a lot of efforts, such as the announcement of the Social Finance Activation Plan, as we saw above, but it is a reality that many members of society do not understand such cultures yet. Even, according to the Pressian (2018), the Conservative party in South Korea distorted the concept of the social economy as socialism. Moreover, there is no law related to social economy.

7.1.2. Absence of professional organisations

South Korea does not yet have an organisation that can support SIB projects professionally. As we have seen above, although the Ministry of the Interior and Safety published the guide in 2017, it is merely to regulate the procedures for local government to launch SIBs. According to the guide published by the Ministry of the Interior and Safety (2017), SIB projects are only set up at the level of local government and public institution, and it just introduces the procedures for intermediary recruitment, local committee establishment and so on. As a result, the Ministry of the Interior and Safety is not a professional organisation for SIBs. Seoul City and Gyeonggi Province governments, which have launched SIBs, have still not established a specialist SIB support organisation, because they each started only one project as a pilot programme.

7.1.3. Difficulty in obtaining budgets

There are two ways for the government to launch SIBs. The first is to reflect on the government budget to start the project. The second is to raise funds for the project. South Korea is using the first method to reflect the government budget. In the Social Impact Bond Operation Ordinance of the Seoul City Government (2017), the city mayor should reflect the budget for the SIB payments, followed by the contract between the city and intermediary. However, it is difficult for the government to flexibly deal with the project on the basis of the budget because there is a complicated procedure to reflect a budget every year.

7.1.4. Absence of law at central government level

South Korea is a country in which policies are implemented based on laws. However, there is no central government level law to directly support SIBs, so the departments of the central government have no basis for introducing them. Currently, SIB projects have been implemented through local government ordinances at the local government level, but it is not easy to expand nationwide and it is also difficult to carry out large-scale projects due to local government budget limitations.

7.1.5. No tax cuts for SIB investors

SIB investors are proud to be doing social work, but they have difficulty in taking the risk of project failures. If a project is proved to be a complete failure, they may lose all of  their investment principal. This investment risk is why investors are hesitant to invest in SIBs. In order to stimulate investment, it is necessary to provide investors with certain tax benefits, but South Korea still does not have such a benefit.

7.2. Recommendations for South Korea

7.2.1. Promote understanding of the social economy

The South Korean economic system is based on the free market economy. However, since these systems have their limitations, it is necessary to introduce the concept of the social economy, and the first thing to do is to create laws to support it. According to Asia Economy (2018), the Social and Economic Basic Law legislative bill has been under review for a long time at the National Assembly. The National Assembly needs to understand the changing social environment and pass the bill.

Various economic and social actors should carry out activities to raise understanding of the social economy. The government needs to create various support policies for the social economy and social finance, NGOs need to share opinions among stakeholders, and companies need to pursue profit with social value.

7.2.2. Make professional organisations

As we have seen above when comparing the UK and South Korea, the UK Government established Big Society Capital, a social investment banking institution, in 2012. In the same year, it also established the Centre for Social Impact Bonds, a support organisation for social impact bonds, to support the expansion of SIB programmes. The centre is carrying out various support tasks such as research, consultation, planning, investment, evaluation and so on.

The Government of South Korea needs to establish a social investment banking institution based on the example of Big Society Capital. This organisation could play an important role, especially to support investors who are worried about the loss of their investment due to the uncertainty. The Government also could support the expansion of SIBs by establishing SIB centres at the central and local government level that are related closely to each other.

7.2.3. SIB fund creation

As we have seen in the above comparisons, the UK has created a number of SIB funds and launched many projects on the basis of those funds, such as NEET prevention SIBs based on the Innovation Fund, homelessness prevention SIBs based on the Fair Chance Fund and so on. The South Korea Government will also be able to promote more flexible and efficient SIB projects by creating a SIB fund.

With government funds, it is possible to launch a large number of projects with the same themes and compensation standards. In addition, by benchmarking the Social Outcomes Fund in the UK, it is also necessary for the central government to raise funds and jointly promote SIB with local governments. Moreover, various SIBs by subject could be launched supported by the funds such as immigrants, NEETs, homelessness, old people living in poverty and so on.

7.2.4. Enact a basic law for SIBs at central government level

The UK is pursuing SIBs at the central government level based on the Public Services (Social Value) Act 2012. South Korea, like the UK, needs to establish a basic SIBs law. The legal basis at the central government level could be a sustained basis for the settlement and proliferation of the SIBs in South Korea and could be a legal basis for local governments to carry out projects without enacting separate ordinances. When enacting the basic law, the following should be considered: defining the type of new contract that did not previously exist, methods for enabling long-term projects, new contract procedures, funding by government and so on.

7.2.5. Tax benefits for investors

The UK announced the Social Investment Tax Relief Statement in 2016, to expand social investment including SIBs and which allows SIB investors to receive tax reductions of up to 30%. South Korea, like the UK, needs to pursue a policy of cutting taxes for SIB investors in order to stimulate investment and create a new market. With such a policy, we also need to consider tax cuts for the SIB investment principal and SIB investment loss, respectively.

8. Conclusion

In this study, we defined the SIB as the system in which social policy and social investment are connected by financing, then we analysed the status of SIBs around the world and tried to draw up policy recommendations for expanding SIBs in South Korea by comparison with the UK.

Looking at the status of SIB projects globally, beginning with the Peterborough SIB project that aimed to reduce recidivism in 2010, 108 SIB projects were launched around the world. The country that had implemented the largest number of SIBs was the UK, with 40 projects in total. In addition, 88 projects were related to social welfare such as workforce development, homelessness, health and so on. The results were also very encouraging. Of the 108 projects, 27 were completed, 16 of which were announced as successful, 10 of which are as yet unreported and one case was reported as failed.

We have been able to draw up the following policy recommendations from a comparative analysis of the UK, where SIBs have become a policy tool, and South Korea, which is at an early stage of SIBs. First, South Korea needs to improve the understanding of the social economy concept. To do this, the National Assembly should pass the Social and Economic Basic Law legislative bill. Second, South Korea needs to create professional SIB organisations. It would be good to benchmark Big Society Capital and the SIB Centre in the UK. Third, South Korea needs to create SIB funds. Through this, various SIB projects should be created and the central government and local government should jointly implement them. Fourth, South Korea needs to enact the SIB Basic Law at the central government level. This would provide a legal basis for government ministries to implement SIBs. Fifth, South Korea needs to provide tax benefits for SIB investors. This will enable investors to reduce their risk even further.

SIBs do not have a long history. However, many countries around the world are introducing them as a policy tool for responding to budget shortages and maximising policy effectiveness. Not only South Korea, but many countries are still in the early stages of introducing SIBs. The recommendations presented above would be of great help to these countries.

Appendix A

World SIB Status

Launch date	Country	Location	Social issue	Duration (year)	Stage
2018	The UK	London	Children on the edge of care	4	Implement
2017	Australia	Victoria	Homelessness	3	Implement
2017	The UK	London	HIV prevention & treatment	-	Implement
2017	Netherlands	Netherlands	Cancer and work	3	Implement
2017	India	Rajasthan	Maternal and neonatal mortality rates	5	Implement
2017	The UK	Bradford	Learning disabilities in children	6	Implement
2017	The US	Ventura	Recidivism	4	Implement
2017	The UK	Manchester	Entrenched rough sleeping	3	Implement
2017	The US	LA	Homelessness and recidivism	4	Implement
2017	The UK	Manchester	Youth homelessness	3	Implement
2017	Cameroon	Cameroon	Eye care	-	Implement
2017	Congo	Congo	Physical disability	5	Implement
2017	Germany	Osnabrück	Family assistance	3	Implement
2017	The UK	London	Single homelessness	2	Implement
2017	Australia	Queensland	Youth homelessness	6.5	Implement
2017	The US	Alameda	Juvenile justice	-	Implement
2017	Portugal	Fundao	Youth unemployment	3	Implement
2017	Portugal	Porto	Youth unemployment	3	Implement
2017	Portugal	Porto	Children on the edge of care	3	Implement
2017	Australia	New South Wales	Severe mental health issues	8	Implement
2017	Finland	Finland	Migrant and refugee employment	7	Implement
2017	Australia	Queensland	Children reunifying with their parents	7	Implement
2017	Japan	Japan	Cancer screening	-	Implement
2017	Japan	Japan	Dementia prevention	-	Implement
2017	The UK	West London	Children’ssocial care	5	Implement
2017	The US	Oklahoma	Female incarceration	5	Implement
2017	Japan	Japan	Diabetes prevention	-	Implement
2017	Colombia	Colombia	Workforce	5	Implement
2017	The US	Massachusetts	Immigrant and refugee employment	6	Implement
2017	The UK	North Somerset	Children on the edge of care	4	Implement
2017	South Korea	Gyeonggi	Education and employment	-	Implement
2017	NewZealand	Auckland	Mental health and employment	5	Implement
2017	The UK	Lambeth	Special educational needs	-	Implement
2017	France	France	Rural unemployment	6	Implement
2017	France	France	Job creation in deprived areas	10	Implement
2016	The US	Salt Lake	Homelessness	6	Implement
2016	The US	Salt Lake	Recidivism	6	Implement
2016	Canada	British Columbia	Essential job skills	5	Implement
2016	Canada	Toronto	Hypertension	3.5	Implement
2016	Canada	Saskatchewan	School performance and graduation	5	Implement
2016	Netherlands	Enschede	Regional unemployment	2.5	Implement
2016	The US	Washington	Green infrastructure	30	Implement
2016	The US	Connecticut	Family stability	4	Implement
2016	The US	Kent	Reducing preterm birth	5.5	Implement
2016	South Korea	Seoul	Education and care	3	Implement
2016	Australia	New South Wales	Parolee reoffending	5	Implement
2016	Netherlands	Eindhoven	Youth unemployment	3	Implement
2016	Australia	Adelaide	Homelessness	8	Implement
2016	Netherlands	Netherlands	Recidivism and employment	2.5	Implement
2016	Sweden	Norrkšping	Education and care	4	Implement
2016	Israel	Israel	Diabetes prevention	3	Implement
2016	The US	Denver	Homelessness	5	Implement
2016	The US	South Carolina	Early childhood development	4	Implement
2016	The UK	Haringey	Mental health and employment	3	Implement
2015	Netherlands	Utrecht	Youth unemployment	6	Implement
2015	Finland	Helsinki	Occupational wellness	3	Implement
2015	Israel	Haifa &Tel Aviv	University dropouts	8	Implement
2015	Netherlands	Rotterdam	Youth unemployment	5	Implement
2015	The US	Santa Clara	Homelessness	6	Implement
2015	Austria	Upper Austria	Women, domestic violence	3	Implement
2015	The UK	Worcestershire	Older people social isolation	4.5	Implement
2015	India	Rajasthan	Girls’ education	3	Implement
2015	Switzerland	Bern	Migrant and refugee unemployment	5	Implement
2015	The UK	Sheffield	Youth engagement	3	Implement
2015	The UK	Manchester	Youth engagement	3	Implement
2015	The UK	London	Youth engagement	3	Implement
2015	Netherlands	Utrecht	Youth unemployment	4	Implement
2015	The UK	Merseyside	Youth engagement	3	Implement
2015	The UK	Newcastle	Young adult housing/homelessness	3	Completed
2015	The UK	Newcastle	Health	7	Implement
2015	Peru	Peru	Cocoa and coffee production	1	Success
2015	The UK	West Yorkshire	Young adult housing/homelessness	3	Completed
2015	The UK	Gloucestershire	Young adult housing/homelessness	3	Completed
2015	The UK	Greenwich	Young adult housing/homelessness	3	Success
2015	The UK	Leicestershire	Young adult housing/homelessness	3	Completed
2015	The US	Ohio	Child welfare, family homelessness	6	Implement
2015	Portugal	Lisbon	Computer literacy for children	1	Success
2015	The UK	Birmingham	Young adult housing/homelessness	3.5	Implement
2015	The UK	Liverpool	Young adult housing/homelessness	3	Success
2014	The US	Massachusetts	Homelessness	6	Implement
2014	The US	Chicago	Pre-school education	4	Success
2014	The UK	Birmingham	Children in care	4	Implement
2014	The UK	Manchester	Children in care	8	Implement
2014	Canada	Saskatoon	Vulnerable mothers	5	Implement
2014	Belgium	Brussels	Migrant unemployment	3	Completed
2014	The US	Massachusetts	Juvenile recidivism	7	Implement
2013	Netherlands	Rotterdam	Youth unemployment	2	Success
2013	The US	New York	Recidivism and employment	5.5	Implement
2013	Germany	Augsburg	Youth unemployment	2	Completed
2013	The US	Salt Lake	Education and early years	7	Implement
2013	The UK	The UK	Adoption	10	Implement
2013	Australia	New South Wales	Children in care	7	Implement
2013	Australia	New South Wales	Children in care	7	Implement
2013	The US	New York	Juvenile recidivism	3	Failure
2012	The UK	Essex	Children in care	8	Success
2012	The UK	Manchester	NEETs	3.5	Success
2012	The UK	London	Rough sleepers	3	Success
2012	The UK	West London	NEETs	3.5	Completed
2012	The UK	Cardiff&Newport	NEETs	3.5	Completed
2012	The UK	London	Rough sleepers	3	Success
2012	The UK	Thames Valley	NEETs	3.5	Success
2012	The UK	East London	NEETs	3.5	Success
2012	The UK	East London	NEETs	3.5	Completed
2012	The UK	West Midlands	NEETs	3.5	Completed
2012	The UK	Nottingham	NEETs	3.5	Success
2012	The UK	Merseyside	NEETs	3.5	Success
2012	The UK	Scotland	NEETs	3.5	Success
2010	The UK	Peterborough	Short-sentenced offenders	7	Success

Source: Social Finance (2018). Impact Bond Global Database

Appendix B

Outcomes Funders and Contract Methods of UK SIBs

Launch date	Location	Projectname	Social issue	Outcomes funders	Contractmethod
2018	London	Positive Family Partnership	Children on the edge of care	Tower Hamlets Bexley Merton Newham and Sutton Councils Commissioning Better Outcomes Fund	Individual
2017	London	Voluntary and Community Sector Organisations	HIV prevention &treatment	Big Lottery Fund Lambeth Southwark Lewisham Councils CCGs and Public Health	Individual
2017	Bradford	Affinity Trust	Learning disabilities in children	Bradford City Council Big Lottery Fund	Individual
2017	Manchester	Shelter Great Places The Brick One Manchester Trafford Housing Trust	Entrenched rough sleeping	Shelter Great Places The Brick One Manchester Trafford Housing Trust	Individual
2017	Manchester	Mayday Trust	Youth homelessness	First for Wellbeing CIC Big Lottery Fund	Individual
2017	London	Crisis Thames Reach	Single homelessness	Brent Council	Individual
2017	West London	West London Zone	Child social care	London Borough of Hammersmith and Fulham Schools Private philanthropy Commissioning Better Outcomes Fund(Big Lottery Fund)	Individual
2017	North Somerset	Core Assets	Children on the edge of care	Big Lottery Commissioning Better Outcomes Fund North Somerset Council	Individual
2017	Lambeth	HCT Group	Special educational needs	Lambeth Council Big Lottery Commissioning Better Outcomes Fund	Individual
2016	Haringey	Health and Employment Partnership	Mental health and employment	Cabinet Office Social Outcomes Fund Haringey Council and CCG Tower Hamlets CCG Staffordshire County Council and CCGs	Individual
2015	Worcestershire	Age UK	Older people social isolation	Cabinet Office Social Outcomes Fund Redditch & Bromsgrove CCG South Worcestershire CCG Worcestershire County Council Wyre Forest CCG	Individual
2015	Sheffield	Futureshapers Sheffield	Youth engagement	Cabinet Office Youth Engagement Fund Ministry of Justice	Multiple
2015	Manchester	Teens and Toddlers	Youth engagement	Cabinet Office Youth Engagement Fund Ministry of Justice	Multiple
2015	London	Prevista Ltd	Youth engagement	Cabinet Office Youth Engagement Fund Ministry of Justice	Multiple
2015	Merseyside	Career Connect	Youth engagement	Cabinet Office Youth Engagement Fund Ministry of Justice Wirral Council	Multiple
2015	Newcastle	Home Group	Young adult housing/homelessness	Fair Chance Fund Cabinet Office Social Outcomes Fund	Multiple
2015	Newcastle	Social prescribing	Health	Big Lottery Commissioning Better Outcomes Fund Cabinet Office Social Outcomes Fund Newcastle West Clinical Commissioning Group	Individual
2015	West Yorkshire	Fusion Housing	Young adult housing/homelessness	Fair Chance Fund Cabinet Office Social Outcomes Fund	Multiple
2015	Gloucestershire	Aspire	Young adult housing/homelessness	Fair Chance Fund Cabinet Office Social Outcomes Fund	Multiple
2015	Greenwich	Depaul	Young adult housing/homelessness	Fair Chance Fund Cabinet Office Social Outcomes Fund	Multiple
2015	Leicestershire	Ambition	Young adult housing/homelessness	Fair Chance Fund Cabinet Office Social Outcomes Fund	Multiple
2015	Birmingham	St Basil’s (Rewriting Futures)	Young adult housing/homelessness	Fair Chance Fund Cabinet Office Social Outcomes Fund	Multiple
2015	Liverpool	Local Solutions	Young adult housing/homelessness	Fair Chance Fund Cabinet Office Social Outcomes Fund	Multiple
2014	Birmingham	Outcomes for Children Birmingham	Children in care	Birmingham City Council Big Lottery Fund Commissioning Better Outcomes Fund Cabinet Office Social Outcomes Fund	Individual
2014	Manchester	Manchester City Council Vulnerable Children	Children in care	Manchester City Council Cabinet Office Social Outcomes Fund	Individual
2013	The UK	It’s All about Me	Adoption	11 local authorities Cabinet Office Social Outcomes Fund	Individual
2012	Essex	Essex Family Therapy	Children in care	Essex County Council	Individual
2012	Manchester	Teens & Toddlers	NEETs	Innovation Fund	Multiple
2012	London	Thames Reach Ace	Rough sleepers	Department for Communities and Local Government Greater London Authority	Multiple
2012	West London	Prevista	NEETs	Innovation Fund	Multiple
2012	Cardiff&Newport	Capitalise	NEETs	Innovation Fund	Multiple
2012	London	Street Impact	Rough sleepers	Department for Communities and Local Government Greater London Authority	Multiple
2012	Thames Valley	Energise	NEETs	Innovation Fund	Multiple
2012	East London	Think Forward	NEETs	Innovation Fund	Multiple
2012	East London	Links for Life	NEETs	Innovation Fund	Multiple
2012	West Midlands	The Advance Programme	NEETs	Innovation Fund	Multiple
2012	Nottingham	Nottingham Futures	NEETs	Innovation Fund	Multiple
2012	Merseyside	New Horizons	NEETs	Innovation Fund	Multiple
2012	Scotland	Living Balance	NEETs	Innovation Fund	Multiple
2010	Peterborough	One Service	Short-sentenced offenders	Ministry of Justice Big Lottery Fund	Individual

Sources: UK Government website (2018). Guidance, Social Impact Bonds.

Thomas (2014), Innovation Fund Pilots Qualitative Evaluation: Early Implementation Findings

Department for Communities and Local Government in the UK. (2017). Fair Chance Fund Evaluation

* In the case of unreported project names, the service provider is written in the table.

Appendix C

Investors in UK SIBs

Launch date	Location	Project name	Investors	Investor type
2018	London	Positive Family Partnership	Big Lottery Fund Bridges Fund Management	Public body Social finance
2017	London	Voluntary and Community Sector Organisations	Private investors Elton John AIDS Foundation	N/A NGO
2017	Bradford	Affinity Trust	Social and Sustainable Capital	Social finance
2017	Manchester	Shelter Great Places The Brick One Manchester Trafford Housing Trust	Bridges Fund Management	Social finance
2017	Manchester	Mayday Trust	Bridges Fund Management	Social finance
2017	London	Crisis Thames Reach	Bridges Fund Management	Social finance
2017	West London	West London Zone	Bridges Fund Management	Social finance
2017	North Somerset	Core Assets	Bridges Ventures	Social finance
2017	Lambeth	HCT Group	Bridges Social Impact Bond Fund	Social Finance
2016	Haringey	Health and Employment Partnership	Big Issue Invest	Social finance
2015	Worcestershire	Age UK	Care and Wellbeing Fund Nesta Impact Investments Age UK	Social finance Social finance NGO
2015	Sheffield	Futureshapers Sheffield	The Key Fund	Social finance
2015	Manchester	Teens and Toddlers	Bridges Ventures Esme Fairbairn Foundation ImpetusPrivate Equity Foundation	Social finance NGO NGO
2015	London	Prevista Ltd	Undisclosed private investors	N/A
2015	Merseyside	Career Connect	Bridges Ventures	Social finance
2015	Newcastle	Home Group	Northstar Ventures	Private company
2015	Newcastle	Social prescribing	Bridges Ventures	Social finance
2015	West Yorkshire	Fusion Housing	Bridges Ventures The Key Fund	Social finance Social finance
2015	Gloucestershire	Aspire	CAF Venturesome Retail Investors	NGO Individual
2015	Greenwich	Depaul	Big Issue Invest Bridges Ventures Montpelier Foundation	Social finance Social finance NGO
2015	Leicestershire	Ambition	Big Issue Invest The Key Fund Retail Investors	Social finance Social finance Individual
2015	Birmingham	St Basil’s (Rewriting Futures)	Big Issue Invest Bridges Ventures CAF Venturesome Barrow Cadbury Trust The Key Fund	Social finance Social finance NGO NGO Social finance
2015	Liverpool	Local Solutions	Big Issue Invest Big Society Capital The Key Fund	Social finance Social finance Social finance
2014	Birmingham	Outcomes for Children Birmingham	Bridges Ventures	Social finance
2014	Manchester	Manchester City Council Vulnerable Children	Bridges Ventures	Social finance
2013	The UK	It’s All about Me	Big Society Capital Bridges Ventures	Social finance Social finance
2012	Essex	Essex Family Therapy	Big Society Capital Bridges Ventures The Social Venture Fund Charities Aid Foundation The King Badouin Foundation Tudor Trust Barrow Cadbury Trust Esme Fairbairn Foundation	Social finance Social finance Social finance NGO NGO NGO NGO NGO
2012	Manchester	Teens & Toddlers	Barrow Cadbury Trust Bridges Ventures Esme Fairbairn Foundation CAF Venturesome Impetus-PEF	NGO Social finance NGO NGO NGO
2012	London	Thames Reach Ace	Thames Reach CAF Venturesome Department of Health Social Enterprise Investment Bond Orp Foundation Big Issue Invest Other individual investors	NGO NGO Public body NGO Social finance Individual
2012	West London	Prevista	Prevista	Social enterprise
2012	Cardiff&Newport	Capitalise	3SC Big Society Capital	NGO Social finance
2012	London	Street Impact	St Mungo’s Broadway CAF Venturesome Department of Health Social Enterprise Investment Fund Orp Foundation Big Issue Invest Other individual investors	NGO NGO Public body NGO Social finance Individual
2012	Thames Valley	Energise	Barrow Cadbury Trust Berkshire Community Foundation Big Society Capital Bracknell Forest Homes Buckinghamshire County Council Esme Fairbairn Foundation	NGO NGO Social finance NGO Public body NGO
2012	East London	Think Forward	Big Society Capital Impetus-PEF	Social finance NGO
2012	East London	Links for Life	Bridges Ventures Stratford Development Partnerships	Social finance Private company
2012	West Midlands	The Advance Programme	Advance Personnel Management(APM) UK Ltd	Social enterprise
2012	Nottingham	Nottingham Futures	Big Society Capital Impetus-PEF	Social finance NGO
2012	Merseyside	New Horizons	Bridges Ventures Big Society Capital Esme Fairbairn Foundation Charities Aid Foundation Knowsley Housing Trust Helena Partnerships Liverpool Mutual Homes Wirral Partnership Homes	Social finance Social finance NGO NGO NGO Social Enterprise NGO NGO
2012	Scotland	Living Balance	10 local businesses and individuals Alocal church Alocal funding body	Individual NGO N/A
2010	Peterborough	One Service	Barrow Cadbury Trust Esme Fairbairn Foundation Friends Provident Foundation The Henry Smith Charity Johansson Family Foundation LankellyChase Foundation The Monument Trust Panaphur Charitable Trust Paul Hamlyn Foundation Tudor Trust Rockefeller Foundation Sainsbury’s Charitable Trust J Paul Getty Charitable Trust	NGO NGO NGO NGO NGO NGO NGO NGO NGO NGO NGO NGO NGO

Source: Social Finance (2018). Impact Bond Global Database/Each investor’s website

* In the case of unreported project names, the service provider is written in the table.

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