The Government is using some of the most vulnerable Kiwis as guinea pigs against official advice and in the absence of international evidence that its ‘experiment’ will achieve the desired results, Labour’s Health spokesperson Annette King says.

“A multi-million mental health initiative, to be bank-rolled by private investors, is a disaster in the making.

“Not only is there a lack of overseas evidence that social impact bonds actually deliver on their contracted outcomes, but there is nothing to show any of the international pilots have provided the expected investment return.

“This is an experiment that’s been instigated behind closed doors. It ignores advice provided to the Department of Internal Affairs which found ‘ there are very real difficulties in assessing what projects have the potential to deliver a net benefit for the government, and even greater difficulty in evaluating whether contracts are being successful or not’.

“It went on to say: ‘The overall strategy suggested for New Zealand is not to engage in trials or implementation of a social impact bond.’

“Social bonds add another layer of bureaucracy between Government and the NGO providing the service. They offload responsibility on to private funders who are being asked to gamble on outcomes-based social contracting, in this case New Zealanders’ mental health.

“The programme is likely to undermine existing NGOs and may force them to work with private equity investors in future.

“The risks associated with this are huge. In order to meet targets the focus is likely to be on the ‘easier-to-help’, not the more ‘difficult’ - read expensive - clients. When it goes wrong it will be the taxpayer once again picking up the tab.”

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