Mr Maude denied the bond scheme was a way of shifting the cost of public sector projects on to private investors and philanthropists – but acknowledged the model is a useful way of delaying payment. “When the results are delivered that triggers a payment . . . and this payment will come from the public sector,” Mr Maude said. “It’s a way of funding the work in advance”.
Social enterprise and social impact bonds are evolving concepts to describe new ways applying market models and solutions to social problems along with new ways of financing these projects. Contracting for outcomes, while well-understood in business-based contracts is still fairly new in the application to social programs. These are distinct but related approaches that are being touted as a way for government contract for public services and reduce expenditures on social programs.