Steps in place for social bond pilot

Sunday 13 Apr 2014 3:24 p.m.

Finance Minister Bill English

Finance Minister Bill English

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The Government is pushing ahead with a pilot of so-called social bonds.

Social bonds have been launched in the UK, US and Australia as a way of raising money for a range of government services, including health and prison services.

The structure varies but generally investors provide upfront funding to service providers and if they achieve agreed results the Government pays the investors back their investment plus a return.

Finance Minister Bill English and Health Minister Tony Ryall today called for people to register an interest in becoming an intermediary for a previously announced social bond pilot programme in New Zealand.

Service providers have submitted ideas and a shortlist is being compiled by the Ministry of Health, which is leading cross-agency work on the pilot.

"We see potential for social bonds to deliver better results and attract investment to preventative services and we think the time is right to pilot this model here," Mr Ryall said.

The intermediary role has been undertaken internationally by banking, financial advisory services, consultancies, or venture capital firms.

It could be taken on by any service providers or investors with financial and program management capabilities.

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