The second article reviewed, published by Edmiston and Nichols on 2018, analyse the impact of the presence of private capitals on the SIB’ functioning.
The second article reviewed, published by Edmiston and Nichols on 2018, analyse the impact of the presence of private capitals on the SIB’ functioning. They propose a deep description of the development and functioning of four Uk SIB’s. The findings of the authors suggest that the introduction of private capital in outcome-based commissioning has some positive effects, especially by shifting the financial risk from the service provider to the investors. Nevertheless, SIBs seem to have a number of unintended effects on service providers. For example, some third sector stakeholders, interviewed by the authors, felt that the degree of micro-management built into the SIB was actually reducing their flexibility to autonomously pursue their social mission. The paper concludes by some general consideration about the risks and the opportunities related to the social impact bonds for the public service reform in the UK. They point out that without an effort to understand the effects of this mechanism of private financing of social service, the public authorities risk to pay high financial costs, without any certainty of achieving the benefits supposedly attached to the Social Impact Bond model.