The Ministry of Health is seeking groups interested in social bond pilots:
A new and innovative alternative to the way social services are delivered has come a step closer, Minister of Finance Bill English and Health Minister Tony Ryall say.
The Government last year agreed to a social bonds pilot and people are now able to register their interest in becoming an intermediary in the pilot programme.
An intermediary is a person or group who brings investors and service providers together. The intermediary uses their skills in project management and finance to raise funds and drive performance to achieve agreed outcomes.
“The Government does not have all the answers to our communities’ problems and social bonds are one new way to involve investors and private or not-for-profit organisations in improving social outcomes, while achieving value for taxpayers,” Mr English says.
Mr Ryall says social bonds give service providers greater freedom and flexibility to use private capital and expertise to deliver services to their communities – with the Government paying a return depending on achievement of agreed outcomes.
“This shifts risk from the taxpayer and provides an incentive for our investment community to use its expertise for generating results in the social sector,” Mr Ryall says.
Social bonds trials are underway in the United Kingdom, United States, and Australia where examples of their use include targets of reducing reoffending, increasing employment, improving outcomes for children in care, and improving management of chronic health conditions.
In New Zealand, service providers have submitted their ideas and a shortlist is being compiled by the Ministry of Health, which is leading cross-agency work on the pilot.
“We’re still in the early stages here but progress from the overseas pilots is encouraging,” says Mr Ryall.
“We see potential for social bonds to deliver better results and attract investment to preventative services and we think the time is right to pilot this model here.”
Mr English says there is a strong alignment between the social bonds model and many of the other initiatives being put in place across government like Better Public Services where the focus is on achieving results for the investment New Zealanders make in public services through their taxes.
“If successful, the social bonds pilot might attract investment and offer lessons that could be used for contracting in future, including further social bonds,” Mr English says.
How refreshing, and encouraging, to have a government which admits it doesn’t have all the answers and is willing to try a different approach to solve problems.
Rewarding achievement puts the risk with the provider while giving them a strong incentive to succeed.
This isn’t just throwing money at problems, it’s aimed at getting solutions.
More information of Social Bond Pilots is here.