Tag Archives: Privatisation

The Immorality of Innovation – the Tale of Social Impact Bonds

meghan-joy-john-shieldsMeghan Joy and Dr. John Shields

In a post sub-prime mortgage induced financial crisis, another financial tool that risks increasing precarity for those most vulnerable is becoming increasingly popular in a political climate of austerity.

 

Social Impact Bonds (SIBs) are a social policy tool that claims to solve complex policy problems, such as homelessness, unemployment, and recidivism, through the scientific methods of financial modelling. Actively supported by several governments worldwide – there are currently 54 projects in 13 countries – SIBs provide a mechanism to turn the risky behaviours of vulnerable individuals into a form of profit making for private impact investors. SIB projects target population groups, such as the homeless, troubled youth, and obese, whose problems result in costly use of emergency-oriented public services such as shelters, prisons, and hospitals. In this way, SIBs are positioned as preventative, allowing future savings on costly public programs. These savings, also known as impacts, outcomes, or results are measured for their social value created (Dowling & Harvie, 2014). The SIB instrument places a current price on anticipated social value based on the assessed future risk that participants will not be reformed. Risks become a reward as investors bet on the extent to which vulnerable people will be transformed.

Continue reading The Immorality of Innovation – the Tale of Social Impact Bonds

Create Social Wealth Funds! It’s Time To Halt The Great Public Asset Boot Sale

Stewart Lansley
Stewart Lansley

Britain’s public assets are now the subject of a giant boot sale. The great rolling privatisation juggernaut not only includes the £4bn Green Investment Bank, and the bailed-out Lloyds Bank but is now eyeing up assets like Channel 4 and the Met Office. The government hopes that together they will deliver £32bn in revenue this year alone from the sell-off.

Privatisation was originally sold as the route to Mrs Thatcher’s much vaunted ‘popular capitalism’. Yet shares bought by the public through privatisation have mostly been sold immediately. Far from spreading wealth, decades of sell-offs have merely skewed the economy even more heavily in favour of a few private owners helping to fuel Britain’s widening wealth and income gap.

No longer able to claim it will spread popular capitalism – always a myth – the government has a new defence: sales will help pay down the deficit. Yet it makes little sense to use long term capital assets to finance a temporary revenue gap. Continue reading Create Social Wealth Funds! It’s Time To Halt The Great Public Asset Boot Sale