Government to issue social bonds for mental health services

Private investors are about be given the opportunity to invest in and make money from the provision of social services.

Last week, the government let Relationships Aotearoa fail, saying there was no more money for a vital (contracted out) social service. Then over the weekend, it announced a $28 million pile of cash for investors in "social bonds". What's a social bond? financialised misery:

Social bonds involve private and non-profit organisations partnering with the Government to fund and deliver services to improve social outcomes. If the contracts achieve agreed results, investors get paid back their investment plus a return.
The return depends on the level of results, up to an agreed amount.

So, the government is going to take a vital social service - e.g. caring for the mentally ill - financialise it, then bet on failure to provide an "incentive" for companies to "innovate" and "find solutions" to serious mental illness.

Driving social change through profit?: Financial institutions and banks keen to partner with non-government organisations will be targeted by the Government for its first social bond programme. The Government is set to give private investors the opportunity to invest in and make money from social services, beginning with mental health services.

It has set aside $28.8m in this year's budget for paying out on social bonds which will first focus on getting people with mental health conditions into employment.

Social service providers will be asked to team up with investors to carry out the work. Later, that money is reimbursed to the investor by the Government, with interest, if the organisation meets specified performance targets.

Advocates say issuing social bonds for mental health services risks being an unfortunate experiment undertaken with society's most vulnerable.