Social bond collapse blamed on 'tedious bureaucratic processes'

By The Mandarin

July 14, 2016

New Zealand’s first social bond pilot has collapsed, with the government unable or unwilling to keep the sole provider, Wise Group, in negotiations.

The Ministry of Health NZ began working on the pilot program three years ago. The first bond was aimed at helping those with mental health problems enter the workforce by funding employment consultants in GP practices.

Radio New Zealand is reporting that the government was offering to prop up investor contributions in the bonds to get them over the line. Deputy Prime Minister Bill English (pictured) is now looking to begin negotiations on the next bond:

“I understand [the first bond] negotiations have stopped and it looks like the parties have pulled back, so clearly it wasn’t a successful conclusion to that, and we’ve learnt a lot and we’ll now get on with the next one.”

An after action report is expected to be released in August to provide lessons for the team working on the second bond pilot.

The Labour opposition has little faith in the social bond model, despite successful examples in New South Wales, South Australia and the United Kingdom. Labour’s health spokesperson Annette King reportedly said the whole thing was nonsensical as social bonds had failed in other countries:

“It was never going to fly because there was no need for them to put in another funder. All the government needs to do is to fund a group like the Wise Group direct and cut out the middle man.”

“I think it’s absolutely indicative of the cost to the community sector of doing business with government.”

Platform Trust, the peak network of addiction and mental health community organisations that includes Wise Group, however, had a different interpretation for the collapse. Chief executive Marion Blake was quoted by RNZ:

“I think it’s absolutely indicative of the cost to the community sector of doing business with government. We’re seeing this over and over again.

“The government is inviting innovation, inviting propositions that will change the way that we do things, but yet we go through what appears to us, from the community sector, as tedious bureaucratic slow processes that kill things before they’re even born.”

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