Are Social Impact Bonds a good way to invest in public services?

Imagine a contract where private investors are paid by the government if there's a decrease in homelessness or convicts re-offending. It's a an idea that's taking shape in the UK and some US states. And now the Canadian government is considering piloting social impact bonds. Critics say it's a way of governments shirking their responsibilities. Today we make the case for and against social impact bonds, here at home.

---

Are Social Impact Bonds a good way to invest in public services? - Co-Founder, Social Impact Bonds

Belt tightening, cut backs, and austerity are the buzz words of the global economic slowdown. And in the face of those cut backs, the Canadian government announced a plan earlier this month to consider new ways to fund social programs.

The Federal Minister of Human Resources and Skills Development Diane Finley says that one such approach under consideration is Social Impact Bonds. The controversial bonds are designed to leverage private funds to help support social programs. We speak with the Minister in a moment to hear how she envisions it working.

But first, we were joined by Toby Eccles, the man responsible for developing the Social Impact Bond. He's the development director and co-founder of Social Finance in the United Kingdom, and he's behind a pilot project that uses the bond to fund a program aimed at reducing inmate recidivism in Peterborough, UK. Toby Eccles was in London, England.

Are Social Impact Bonds a good way to invest in public services? - Human Resources Minister

As we mentioned, one person anxious to explore the effectiveness of social impact bonds is Canada's Minister of Human Resources and Skills Development.

Earlier this month Diane Finley announced that Ottawa will consider the bonds to help tackle such challenges as homelessness, unemployment and crime. Minister Diane Finley joined us from her office in Ottawa.

Are Social Impact Bonds a good way to invest in public services? - Social Bond Policy

Blending business and charity in the hope of making a bigger societal difference may sound promising.

But our next guest is skeptical. David MacDonald is an economist with the Canadian Centre for Policy Alternatives. And as a policy, he doesn't think social bonds are much of an alternative. David MacDonald joined us from Ottawa.

This segment was produced by The Current's Josh Bloch.

Other segment from today's show:

Study links workplace toxins to breast cancer

Egypt secures $4.8 Billion IMF loan but no relief for Egypt's poor