Based on the idea that loneliness and social isolation are recognised as key determinants of health and well-being, but have historically not attracted much investment, Social Finance, an economic think tank, conducted a study into the feasibility of social impact bonds.

What are social impact bonds?

Social impact bonds are an approach to commissioning local services whereby investors receive returns only if measurable social outcomes are achieved, which in this instance is the reduction in loneliness.

On the back of this study, Social Finance has launched a trial project in Worcestershire implementing the social impact bond concept in practice, the Reconnections Social Impact Bond.

In the study, they highlight the fact that there is a lack of clarity around what has an impact on the reduction of loneliness at scale.  There is also difficulty in determining how much loneliness costs the public sector.

Social Finance has therefore developed a model to test the impact of a service on loneliness and public sector expenditure while minimising the financial risk to the local authority. While the trial project goes on in Worcestershire, academics at the LSE will be evaluating the project to add to the existing knowledge base around loneliness and service design, and loneliness and health service usage.

What did the trial find?

The model developed by Social Finance indicates that, based on direct and indirect costs of loneliness, loneliness could be responsible for up to £12,000 per lonely individual over that person’s older lifetime.

Therefore, if there is a reduction in loneliness of between 6% and 17% of the participants, the savings, per person could be between £720 to £2,040. Social Finance stress that these are merely estimates and these assumptions will be tested and refined based on the results of the LSE evaluation of the service impact on health and social care. Up to this point, these figures are merely illustrative.

In the initial overview of the research, Social Finance determined that any service offered under the banner of a social impact bond should do the following things:

  • Engage the right people at the right time
  • Support older people to feel confident interacting with their community
  • Progress participants to entirely informal care

With this in mind, an intervention model was developed in Worcestershire which seeks to connect people who feel lonely to community-based interventions and to help them overcome barriers through engaging personal support.  It seeks to intervene at critical times when a person is most likely to become lonely and help them liaise across organisations, and it will help the participants to build support networks within the community.   Consultations with individuals are carried out by locally trained volunteers, who will prescribe activities based on each particular situation.  For example, support includes:

  • Peer support groups
  • Group exercise and activities
  • Outreach for the most severely isolated
  • Support for bereavement and mental distress

What does this mean for the sector?

The service model in Worcestershire is being tested by measuring loneliness before, during and after the intervention. They are measuring the prescription of the services rather than the individual activities.

The Worcestershire service commenced in August and they are now taking their first referrals, with an aim to take a total of 5000 referrals over 18 months.  They are in the process of building partnerships with local older age charities and mapping activity and service providers.

As of now, they have found the main operational challenges to be:

  • actually finding those who are lonely
  • working with volunteers and the community to support the clients
  • enabling the clients to give back and share skills
  • ensuring that there is continuous learning and improvement as the project progresses

At the Campaign, we applaud the innovative work being done by Social Finance; they have been mindful of ensuring the research is incorporated into the process.  We very much look forward to seeing positive results from this project and to sharing the learning with our network.