New research shows how outcomes contracts can save the NHS


New research released today shows the unrivalled value that outcomes-based commissioning has in keeping UK citizens healthy and reducing strain on the National Health Service (NHS).

The independent report, produced by ATQ Consultants for Better Society Capital, demonstrates that social outcomes contracts – a method of public service delivery which enables prevention – have created nearly £9 of public value for every £1 spent - saving the taxpayer £507 million in fiscal value alone.

You can read a blog and the report on ATQ Consultants' website here.

At a time where NHS resources are stretched and funding is stagnating, the UK’s leading social impact investor is arguing that the adoption of outcomes contracting can help the country spend significantly less on treating preventable conditions, with healthcare currently the single most expensive policy area and at the forefront of voters’ minds.

In health alone, the report shows that outcomes contracts have reduced demand on the health service equating to a total saving of £128.6 million at a corresponding cost to the commissioner of just £26.63m.

This renewed focus comes just a few weeks after former Prime Minister Gordon Brown lent his voice to calling for outcomes-based commissioning, suggesting that the government should announce a £1 billion children’s social impact bond that would be focused on reducing poverty.

The 18 outcomes contracts designed to improve child and family welfare have created even stronger impact with over £10 in public value for every £1 spent by government. This represents a taxpayer saving of £230.7m.

Aman Johal, Managing Director, Better Society Capital said:

“This research proves what we have known from individual projects – these contracts not only deliver meaningful change in communities and prevent social problems where complex needs exist, but also save the taxpayer considerable money

“The next government has the opportunity to safely transform key areas of public services with trustworthy delivery partners, who not only know their local communities but also operate with no up-front cost.

“Furthermore, this is an approach that is highly measured compared to other types of commissioning, which can provide new data and evidence to support overall public service reform.”

The outcomes contract model’s ability to focus on prevention can help to identify those at risk of long-term health conditions and helps them minimise that risk.

This reduces strain on the NHS and other services leading to a healthier population, higher levels of wellbeing and better running services for those who desperately need them.

For example, community-led service Thrive worked with 1,500 people in north-east Lincolnshire, succeeded in reducing hospital attendance and costs by 35 per cent, while also reducing GP usage by 11 per cent.

Wider Impacts

In the largest study of outcomes contracting to date, the ATQ Consultants analysis also looks at the wider impacts of this solution in tackling other issues spanning homelessness to unemployment.

Overall, the report shows that outcomes-commissioned projects have generated £1.9 billion of total value to the taxpayer, including through positive improvements to society like improved health, reduced crime or helping people with mental health issues into work.

This value was generated at a cost to government of £217 million– a cost:benefit ratio of 1:8.59, without compromising service quality and supporting individuals with complex

Outcomes contracts are a method of service delivery which channels socially motivated investment into social sector organisations to provide public services that tackle issues ranging from homelessness to youth unemployment.

In contrast to traditionally run public services, these require no cost to government until pre-agreed delivery outcomes are met, while local expert charities and social enterprises deliver the services.

These contracts regularly implement prevention strategies, which aim to reduce future risk of social problems and lessen the need for future healthcare and other forms of government support.

Neil Stanworth, Director, ATQ Consultants, said:

“We are delighted to have worked with Better Society Capital to update our previous study into the value created by outcomes contracts. Thanks to some improvements to our modelling and helpful review by independent experts we think it provides an even better estimate of the benefit to government and wider society of these contracts.”

Lisa Hilder, Assistant Director for Strategic Planning at North East Lincolnshire Health and Care (which helps deliver Thrive Social Prescribing), said:

“Working with social outcomes contracts enables commissioners to get to the heart of the matter – what is the difference we are making for our communities? It enables us to demonstrate the impact for people, health and care organisations and by extension our local system. It therefore helps us to direct and manage resources as effectively as possible and achieve the best possible results for our residents and the public purse.”


Press Contacts

Ian Young, PR & Media Relations Officer, Better Society Capital

Caroline Hailstone, PR & Media Relations Officer, Better Society Capital

About Better Society Capital

Better Society Capital is the UK’s leading social impact investor. Our mission is to grow the

amount of money invested in tackling social issues and inequalities in the UK. We do this by investing our own capital and helping others invest for impact too.

Since 2012, we have helped build a market that has directed more than £9 billion into social purpose organisations tackling issues from homelessness and mental health to childhood obesity and fuel poverty, a ten-fold increase in ten years