Backers banking on social bonds cash?

The Government is refusing to say what the $29 million it has set aside for its controversial social bonds programme is for, raising suspicions it is an upfront payment to the project backers, Labour’s Health spokesperson Annette King says.

A briefing paper to Jonathan Coleman and Cabinet committee members notes a key component of the Government’s social bonds model is ‘payment by results’, meaning the Government – or taxpayers – only pays out cash for successful outcomes ‘once they have been delivered and measured’.

“Dr Coleman has previously said the $29 million is for four projects. The paper talks about a tagged contingency of the same amount for just two pilots.

“Questioned today on exactly where the money would be going and whether it was a ‘carrot’ for the backers who aren’t expected to see the required results for up to seven years, Dr Coleman turned inexplicably coy.

“That only raises suspicions the cash is being used to grease the wheels in an attempt to get this dubious policy underway.

“The paper also reveals the Red Cross withdrew from the Dragon’s Den pitching process citing lack of ‘data availability’. They are now the second reputable provider to turn their back on the Government’s dodgy social experiments, following the Salvation Army’s snubbing of its social housing plans.

“There is very little overseas evidence to show social impact bonds deliver on their contracted outcomes, and the Department of Internal Affairs has warned against introducing them here.

“It is time Dr Coleman told Kiwis exactly what the Government is spending their money on,” Annette King says.