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“Social bonds” fail – blame the officials!

Written By: - Date published: 3:09 pm, December 16th, 2016 - 31 comments
Categories: accountability, national, public services, spin, useless - Tags: , ,

Remember “social bonds”? From the Ministry of Health:

Social bonds are an innovative way for private and not-for-profit organisations to partner in delivering better social outcomes – and be rewarded by Government. The Ministry of Health is leading cross-government work to pilot social bonds in New Zealand.

Last year MS wrote here:

The stupidest idea this Government has had yet

This is the sort of thing that only a Merchant Banker would think was a good idea. The Government is planning to issue “Social Bonds” to corporations and individuals investing in social services with the expectation that market forces will produce a superior result.

This belief that the invisible hand of the market will always deliver verges on cultism. It will also ensure that existing levels of inequality will only get worse. Perhaps that is the real motivation. …

Internationally the experiment is still underway, with plenty of failures (of various kinds) stacking up. In July this year NZ added its own failure to the list:

Government’s first social bond collapses

The government’s first social bond has collapsed, with negotiations breaking down and the provider walking away.

Last year nearly $29 million was put aside for the rollout of four bonds. The first was to be a programme to help people with mental health problems get into the workforce, and the plan was to put employment consultants in GP practices. But the provider, Wise Group, confirmed yesterday that it had withdrawn from the scheme. It would not make any further comment saying it had been directed to refer inquiries to the Ministry of Health. …

Today it seems that a scapegoat for this failure has been found:

Report on NZ social bonds pilot cites lack of commercial expertise by public officials

A report on failures within the government’s first social bonds pilot blames them on a lack of commercial expertise from the bureaucrats involved.

Work started in 2013 on social impact bonds where typically a central or local government pays private investors a return based on achieving agreed social outcomes.

The government earmarked nearly $29 million in 2015 for the rollout of four bonds but the first one aimed at helping people with mental health problems get into the workforce failed to get off the ground mid-year when the provider, Wise Group, withdrew from the scheme. It won’t comment on why.

A joint Treasury, Ministry of Health release on the report, made public with redactions, said the main problem was a lack of commercial financial expertise within their pilot team. That led to a heavy focus on “process diligence” as opposed to achieving a successful outcome.

Government officials by their nature are not expected to have “commercial financial expertise” and “process diligence” is what they do. The “successful outcome” was the responsibility of the contracting organisation, that’s the whole point of “social bonds”.

Other issues included a lack of visible senior sponsorship of the pilot within the agencies and the need to include investors earlier in the process and provide them with clearer information upfront on the basic commercial and financial parameters the Crown is willing to contract at. …

Or in other words, it was a risky idea that was poorly implemented by an incompetent minister. But you can’t say that, so sure, whatever, blame the officials.

31 comments on ““Social bonds” fail – blame the officials!”

  1. Vaughn 1

    Another example of minister Coleman blowing smoke in the face of his opponents.

  2. Rosemary McDonald 2

    This is exactly the outcome one can expect when one endeavours to profit from the misery of others.

    Wise Group was a perfect contender for this scheme, being what they are, and I have no sympathy for the wasted effort they must have put in in their failed bid to attract an investor for their program.

    “The first was to be a programme to help people with mental health problems get into the workforce, and the plan was to put employment consultants in GP practices.”

    Hah! The ‘arbeit macht frei’ initiative, aka, ‘Daniel Blake’s mental illness cured by Hard Work.’

    Oh, and it’s not entirely Coleman’s fault either…this is a Bill ‘the Lizard’ English ‘reduce the liability of the big hard lump of wasted human potential’ scheme…enthusiastically embraced by Tony “I ‘ll just talk through a hole in my arse and maybe no one will notice” Ryall.

    • millsy 2.1

      To be honest, were I an employer, I wouldn’t hire someone who needed a case manager to hold their hand while they worked.

      • Rosemary McDonald 2.1.1

        Sometimes people living with mental illness are really keen to work, they just need an employer who is sensitive to their needs…like not subjecting them to unnecessary stress, and considering workplace stress for all is an actual thing…http://www.stuff.co.nz/business/industries/9859149/Focus-on-stress-at-work-to-grow it is not unreasonable to expect a little more consideration for a person less robust.

        The case manager works with the employer too…or would have done if the scheme had got off the ground…because some employers are, frankly, arseholes.

        The impression given in the hype when this social bond idea was launched was that only keen and willing patients would be recruited via the GP. In actual fact, GPs were going to be ‘encouraged’ to promote the scheme to patients.

        There was, some of us suspected, going to be the facility for an ‘independent’ doctor (a la ACC) to give the patient a push in the right direction if their own GP failed to do this.

        Shitty idea, better dead.

    • KJT 2.2

      We already have a totally effective, and cost effective as well, scheme for getting people back to work. ACC.

      Extending it to illness would be a much better “social investment”.

      It would stop private profit from Nationals dodgy privatisation schemes, though.

      • Rosemary McDonald 2.2.1

        “We already have a totally effective, and cost effective as well, scheme for getting people back to work. ACC.”

        And ACC get a mention in Bill “the Lizard” English’s 2010 declaration of war ….
        http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10644993

        “”English says the MSD is not set up to deal with them.

        Rather, it is set up to deal with “the easy stuff” – the unemployment and the domestic purposes benefits.

        “They do the easy stuff and they do it very well, but they don’t worry about these guys. If they were ACC customers, we would be spending a lot of money on trying to move them. They cost a bit less on sickness and invalids [benefits], not a hell of a lot less, but we do nothing and we are actually doing nothing to reduce this very large long-term liability.””

        Well…for a start, English was wrong when he said sickness and invalids benefits cost ‘a bit’ less than ACC. 2013 research from Massey uni…http://www.massey.ac.nz/massey/about-massey/news/article.cfm?mnarticle_uuid=50F8BDD8-B17D-4C92-956F-827C617A0FA1

        “For the non-ACC group, median income declined by 45 per cent over 30 months (from $36,500 to $19,900) while the median income of the ACC group increased from $40,000 to $45,900.”

        This is about those with permanent spinal impairment….

        This social bond thing is under Misery Of Health, not the Ministry of Social Disintegration

        The Miserly of Health has an almost loathing of the permanently disabled and treats them accordingly. In 2012 there was a joint MOH/ACC study into people with spinal impairments, and although there was, I believe, a deliberate attempt to exclude MOH spinal impaired (which make up about 40% of the sci population) the Situational Analysis presented a very good comparison twixt the two levels of support between the two government agencies.

        http://www.acc.co.nz/PRD_EXT_CSMP/groups/external_providers/documents/project/wpc119428.pdf

        …although you’ll have to scroll to about page 80 to find it.

  3. greywarshark 3

    Bart wants it known that – He didn’t do it.
    (https://www.youtube.com/watch?v=P_iiXWzqHRw

    • Rosemary McDonald 3.1

      “Bart wants it known that – He didn’t do it.”

      Maybe…but its the kinda plan the little yellow guy would come up with….

  4. ” Or in other words, it was a risky idea that was poorly implemented by an incompetent minister. ”

    Yet despite this…

    Have a happy Christmas !!

    Twas the night before Christmas , …
    ………………………………………………………

    Twas the night before Christmas
    When Jonkey shot through
    And left National feeling ,
    Divided and blue.

    The voters were all nestled
    snug in their beds
    Sleeping more soundly ,
    that the TTPA is dead

    And Bennett in her kerchief ,
    spouting off crap
    And Bill English too ,
    giving Judith the slap

    When from the backbenches , there arose such a clatter
    both Paula and Bill looked to see what was the matter
    away to the Speaker , Bill flew like a flash ,
    to head off some factions, that threatened to clash

    The vote was the test of their new-fallen foes
    Gave the lustre of power to the vanquished below.
    When, what to Bills wondering eyes should appear,
    But Winston and Little , and Metiria showing no fear.

    With a house bubble bursting, so lively and quick,
    Bill knew in a moment that National was nicked.
    More rapid than eagles his problems they came,
    And he screamed, and he shouted, and called them by name!

    Now, Crusher! now, Bridges! now, McCully and Brexit!
    On, Coleman! On, Joyce! – who else will try vex it!
    We’re the top of the pack! the top of the wall!
    Now dash away! Dash away! Dash away all!”

    As dry leaves that before the wild hurricane fly,
    Unaffordable rents, mount to the sky.
    So up to the house-top speculators they flew,
    Denying first time buyers,and all the homeless too.

    And then, in a twinkling, Bill heard on the roof
    The prancing and pawing of Paula’s great hoof.
    As Bill pulled in his head, and was turning around,
    Down the chimney Auckland’s housing came with a bound.

    She was dressed all in fur, from her head to her foot,
    And her clothes were all tarnished like leopards in soot.
    A bundle of cash she had flung on her back,
    To leave Auckland $5000 , $2000 to come back.

    Bills eyes-how they twinkled! he was not feeling merry!
    His cheeks were like roses, his nose like a cherry!
    His droll little budget was drawn up like a bow,
    This Deputy ! This Paula ! – kept me out of the know !.

    The stump of a pen he held tight in his teeth,
    And problems with forecasts encircled his head like a wreath.
    He had a broad plan and surplus with a little round belly,
    That scuppered his tax cuts ,when Kaikoura shook like a bowlful of jelly!

    He was grumpy and thin, a shadow of his old self,
    And we laughed when we saw him, in spite of ourselves!
    A wink of his eye and a twist of his head,
    Soon let NZ to know we had everything to dread.

    He spoke not a word, but went straight to his work,
    Destroyed all state housing, then turned like a jerk.
    Then gave us the fingers , aside of his nose,
    And giving a nod, up the Beehive he rose!

    He sprang to his office , to his team gave a whistle,
    And away they all flew like the down of a thistle.
    But I heard him exclaim, ‘ere he drove out of sight,
    ” We’re meeting at Keys place for piss ups –

    And to all a good-night !

  5. DH 5

    I want to know what the hell is process diligence. I’ve heard of the ministry of silly walks, is there another one for useless phrases. Where do they get this stuff from?

    • peterlepaysan 5.1

      It is a bureaucratic example of spin. It is a variant of “nothing to see here, look over there, where (party of choice) did it too.”

    • ‘ Process diligence ‘…

      Ill agree,… between the global fetish for Americanized jargon and acronyms and Politically Correct ‘speak’ we get inundated with …. it seems its more like the ramblings garnered from a bunch of bored failed linguistics teachers recovering from a recent stroke … or this :

    • Thinkerr 5.4

      I thought it must mean that the ministry wasn’t monitoring properly or often enough. Just another new, vague term that serves to support the accompanying statement that the ministry, not the minister, is responsible.

      As in, the ministry took the Minister’s brilliant new policy and ruined it by poor implementation.

      Of all there is to be angry about this government, this really riles me. If ministers aren’t accountable for their ministries, then maybe they should be paid at a backbencher’s rate.

      • Draco T Bastard 5.4.1

        As in, the ministry took the Minister’s brilliant new policy and ruined it by poor implementation.

        I get the feeling it was more that the ministry did their job properly thus preventing a general rort by the private provider but the minister can’t say that.

  6. the pigman 6

    Why do I get the feeling that the much-touted “social investment” the B team are talking about will just end up being more of this shit?

  7. UncookedSelachimorpha 7

    And a lot of the real reasons for problems and failures can all be hidden behind “commercial sensitivity”, with private profit being the divine principle in all of this.

    The whole concept of this bond (force the sick into low paid vulnerable work, while giving private interests a bite at the public purse) was vile from the very start.

  8. millsy 8

    You want to get the mentally ill into work? Treat their illness. Simple. Then wean them onto voluntary or part time work.

    • KJT 8.1

      If their illness is successfully fully treated, then they are no different from someone, who has, say, recovered fully from a broken leg.
      Their previous health problems are no business of their employer, whose only responsibility is that they are fit for work, now.

      From observation, however, expecting someone in the middle of an episode, to work, is an exercise in cruelty. As well as ensuring they lose credibility with workmates, customers and employers.
      I watched an excellent tradesman, a good friend, try and work through an episode of depression, because he couldn’t afford to go on the sickness benefit. The difficulty of even getting treatment for him.
      I saw him lose customers and reputation due to the effects of the illness. His struggles prolonged the depression for years.
      A few months off and proper treatment at the beginning, without financial worries, would have seen him right. And paying taxes again!

      Contrast it to my broken leg. ACC, so no money problems, considerable sympathy from all around. Job held until I was healed, plenty of help from phsio to occupational therapy.

      • Robertina 8.1.1

        You might want to check out ACC’s well-documented record with long-term claimants, including those who have illness caused by workplace accidents, before blithely giving that Crown entity a whole lot more claimants and financial clout.

        • KJT 8.1.1.1

          That is a consequence of Nationals attempts to stuff ACC, so the private sector can compete.

          Worked fine when it wasn’t pretending to be a private insurance company.

          • Draco T Bastard 8.1.1.1.1

            Yep, ACC worked fine – until the politicians, for ideological reasons, decided to change it from a pay-go system to a fully funded model and that it was too much of a good example that the private sector simply cannot compete against.

          • Robertina 8.1.1.1.2

            No that’s wrong, it got worse under National with its manufactured crisis and affected a much larger group of claimants, but long-term claimants had been persecuted under Labour’s watch.
            It’s amazing how people deny (or just don’t know) stuff that’s been in the public domain.

            • michelle 8.1.1.1.2.1

              Actually Robertina have you dealt with ACC recently as I have and so has my partner we both had problems with ACC and had to go to John Miller the ACC lawyer who has a reputation for taking ACC to the cleaners since the Tories have been in power and have denied peoples entitlements by trying to say our injuries were degenerative. If you goggle John Miller and ACC his cases will come up and ACC has been paying out heaps but we don’t hear about it thanks to our biased media. Our claims go back to 2003 and are sports related and we didn’t have any problems under the Labs only when gnats took over they employed clinicians to write favorable reports against the claimants.

              • Robertina

                LOL. So ACC specialist lawyers like Miller and Dunedin’s Peter Sara took no appeal cases during the Labour years. As if.
                My comment said National’s manufactured crisis led to ACC playing hardball with a larger group of claimants. Thus it’s unclear why you think your personal experience is relevant, let alone illustrative of the entire situation.

  9. KJT 9

    A true social bond approach would be to extend ACC to illness.

    Taking a lot of stress off sick people.

    ACC is a proven, cost effective way of getting people back to work, when they are capable.
    However it has the proven fault of keeping money from private insurance and providers.

    • Draco T Bastard 9.1

      The whole point of privatisation is to shift government money into private profit. When the government provides services for free then there’s far less profit available but when the government not only provides it for free but does it through private investment then the profits go really high and become guaranteed because the government can’t allow the service to fail. That’s actually what we saw with the UFB roll out – the service was failing because of all the profits being withdrawn from the it and so the government had to step in and guarantee more profits for the new private owners.

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