Hudak proposes ‘bond’ to raise money for social services

Cash-strapped Ontario should let public-private partnerships raise money privately to deliver social services that are now the responsibility of the province, Tory Leader Tim Hudak says.

Hudak said Thursday that one way to achieve this is through “social impact” bonds or “pay for success” bonds popular in other jurisdictions such as the United Kingdom, Australia, Italy, Massachusetts and New York City.

Hudak is proposing raising money privately by selling these bonds, where the dividend paid to investors depends on the success of the programs offered. These programs could be run by not-for-profit groups, charities and even for-profit agencies.

“What’s good about social impact bonds (is) they are paid for success. They reward outcomes, they reward results . . . for vulnerable people like at-risk youth,” Hudak said, adding that it was an idea actually floated in the Liberal government-commissioned Drummond Report on streamlining government.

“You are paying for success and taxpayers don’t have any upfront risks,” he said.

The social impact bonds are part of a package of proposals the Tories are to offer up Friday in the form of a discussion paper, a Fresh Start for Children and Youth, which is also expected to make some recommendations on streamlining the adoption system in Ontario.

Hudak explained the government would work with a social entrepreneur, whether it’s a charity, not-for-profit agency or for-profit agency “who have bold and innovative idea to help at-risk populations to get a head despite the tremendous challenges they face.”

This private-public partnership, he said, would work with a financing agency to raise a bond from investors, whose money would pay for the programs being offered.

“And at the end of the day the government will pay back the investors in that bond based on the results. If they don’t deliver, they don’t get paid. But if they deliver — and the better success they have — the higher rate of returns on the bond,” Hudak said.

Hudak made his announcement at Turnaround Couriers, a bike courier business that only hires at-risk youth.

“We have 12,000 young people at risk on waiting lists despite spending billions of dollars more. We got to try bold new ideas . . . it’s high time we tried this in the province of Ontario,” he said.

Hudak said he knows the public sector “union bosses” won’t like the idea because “they measure how much money you throw at a problem, they’ll measure how many union members are on the payroll (whereas) I think we need to measure results.”

“I think a little healthy competition makes the world go around,” he told the only two reporters who showed up for his announcement.

Original Article
Source: the star
Author: Richard J. Brennan