What are Partnerships Addressing Disadvantage (PADs)?
- PADs present the opportunity to develop innovative services that generate better social outcomes.
- PADs bring together capital and expertise from public, private and not-for-profit sectors to achieve improved social outcomes.
- Payments are based on achieving agreed social outcomes rather than focusing on inputs or activities.
- Improved social outcomes means improving quality of life for individuals. This can reduce their need to access government services such as hospitals, police, and crisis accommodation. This also has the benefit of providing long-term savings for government, and these savings can be used to provide a return on investment to reward proponents.
- PADs complement other State Government programs and will not replace existing services.
How are PADs different to Social Impact Bonds (SIBs) or Social Benefit Bonds (SBBs)?
- PADs emphasise the partnerships that are needed to tackle complex social problems by combining insights from service providers with resources from the public and private sectors to deliver innovative solutions.
- PADs build on the Social Impact Bonds Pilot program and recognise the opportunity to develop new investment mechanisms in addition to bonds. For example, this may include investments that are financed through debt, equity and/or philanthropy.
- Government is interested in new approaches to achieve improved social outcomes in partnership with the public, private and not-for-profit sectors and is open to discussion about how to achieve better outcomes using different social impact mechanisms.
- Like SIBs, PADs are expected to have a focus on providing measurable social outcomes and risk sharing across partners.
What opportunities do PADs present?
- PADs can encourage innovation and provide service providers with the opportunity to develop holistic programs that have more impact in the longer term.
- Accountability and transparency are improved by measuring outcomes and ensuring there is clarity about what public funding is achieving.
Where do PADs fit in?
- PADs can be a useful way to tackle some of the most difficult problems that are faced by governments by allowing service providers to explore new approaches to achieve the outcomes agreed with government.
- PADs support outcomes-based service delivery approaches and have a particularly strong element of measurement and evaluation of the effectiveness of the services delivered.
- PADs can be a tool that complements other reforms, and are in addition to universal service delivery programs and new forms of program delivery.
- Creating an outcomes framework around PADs also allows the success of the intervention to be measured and therefore replicated across other related or similar government services to ensure better individual outcomes.
Are PADs being used in other jurisdictions?
- Partnerships between government, service providers and investors are increasingly being used around the world to solve complex programs and address compounded disadvantage.
- These include SIBs and SBBs, of which there are more than 100 globally.
- Many SIBs have been implemented in the United Kingdom and the United States in particular. There are currently SIBs in place in New South Wales, Queensland and South Australia.
- The evidence base for partnerships that deliver social impact will continue to develop and emerge over time, as a large number of investments continue to be actively implemented and monitored.
What kinds of investors are attracted to PADs?
- Banks and other financial institutions are looking for positive financial and social benefit returns. Many are actively considering their corporate social responsibilities.
- There is also interest from trusts, foundations and philanthropists as well as individuals.
What are the key stages involved in PADs?
There are five key stages for Partnerships Addressing Disadvantage.
1. Market sounding
- Feedback from the market is sought on the preferred policy area/s for the new partnerships and interest in participating.
A Statement of Intent may be released to seek feedback from the market on interest in partnerships relating to the preferred policy area/s.
Specifically, views from the sector may be sought on the barriers to participation and issues of uncertainty or ambiguity and may reflect this feedback in the final RFP documentation.
The market sounding process will not inform proposal evaluation.
2. Request for Proposals
- Interested parties submit proposals in accordance with a formal Request for Proposal (RFP).
3. Evaluation
- Government evaluates the proposals against the key selection criteria.
Once the RFP has closed, government will evaluate the proposals submitted against the key selection criteria.
During this stage, government may seek clarification or further information from respondents regarding their proposals.
Once the formal evaluation is complete and the successful consortia announced, government and the preferred proponents will proceed to the Joint Development Phase (JDP).
4. Joint Development Phase
- Successful parties negotiate a detailed partnership proposal to be considered by government.
The JDP will allow the successful parties and government to work together and negotiate the detailed proposal underpinning the PADs.
The proposal will proceed if it can be demonstrated to achieve positive outcomes for individuals participating in the intervention and value for money for government.
5. Implementation
- Program delivery can commence once all contractual and partnership arrangements are finalised.
After the JDP has concluded and the final partnership arrangements and interventions publicly announced, the negotiated PAD is able to be implemented and commence service delivery.
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