Commodifying misery: The Coalition’s answer to helping ‘troubled’ families

Private investors are to be asked by the Government to fund intensive programmes focused on helping ‘troubled’ families. This scheme will centre on Cameron’s fabled 120,000 families, with ministers hoping philanthropists, charities and a plethora of other private organisations will provide financial backing to the project.

In fact, private investors who put their money into one of these ‘social impact bonds’ are to be paid a dividend for any successful projects they support. Known as ‘payment by results’ (Buzzword alert), success will see benefactors paid by taxpayers. Although all targets will be agreed in advance, this return (on top of initial investment) could range from 2% to as much as 13%. On a more digestible side note, benefactors will not get any of their investment back should targets be missed.

On Friday, Nick Hurd, Civil Society Minister, announced a number of proposed trials of this scheme. Due to commence next year, these will be based in Westminster and Hammersmith and Fulham in London, as well as Birmingham and Leicestershire. Suggesting these trials could raise up to £40m, Hurd added, “Social impact bonds could be one of many Big Society innovations that will build the new partnerships between the state, communities, businesses and charities and focus resources where they are needed.”

Nick Hurd, Civil Society Minister.

Despite Hurd’s faith, it’s hard to envisage how this policy will be practically applied. Even though, perhaps in essence it has a laudable objective in reality the scope for skepticism is just far too high. Tessa Jowell best summed this up when she said, “The devil is in the detail.”

Launching into this ‘detail’ seemingly opens up a Pandora’s Box of stumbling blocks. How will the government ensure they select suitable financial backers? How rigorous will the criteria be to select these investors? How will the Government check these backers have any real interest in tackling the problems affecting these families? When does a project become successful? In fact, when is a ‘troubled’ family turned around? Their first payday? After a few months of work? Two weeks without drugs? These questions go on and on.

This is when the nonsensical and frankly repugnant nature of this scheme is laid bare. In allowing private investors to fund these ‘troubled’ families the government is opening them up to market forces and in many ways commodifying their unfortunate circumstances. It has been said before and I shall heed the warning once more, whenever market forces become involved in any sort of social project the well being of those receiving ‘help’ goes out of the window and instead profit becomes the main focus.

For Cameron to succeed in his ambitious aim of transforming the fortunes of 120,000 families by the 2015 general election, he needs to recognise families aren’t just smoothly and simply ‘turned’ around, on the contrary these projects will be arduous and have to be long-term.

Worryingly, ‘payments by results’ opens the door for the rapid turnover of ‘troubled’ families, with little attention given to fixing the problems encountered by these families beyond short-term profit. This concern grows depending on how success is perceived in this scheme. For example, if to attract financial backers the Government sets low standards for ‘success’ then we could see financiers achieving little but being rewarded handsomely for their short-term efforts. This speculation lends itself to visions of private investors skipping down the road, profits lining their greedy pockets, as the wheels come off their ‘philanthropic’ work mere moments after their turnaround project concludes.

As a result, this is policy making at its laziest with the Government once again shirking its responsibility to aid those most in need of help. This government have gone out of their way to not only continue but speed up this country’s unwavering march towards complete privatisation. In fact, it seems not a day goes by without something new being taken from government control and given to private financiers. But with this scheme, we could see taxpayer’s footing the bill twice. Once for the short term-success of investors, and then perhaps again in the long-term as failed projects result in the same families returning to square one.

Placing this concern to one side, the whole notion of ‘payment by results’ is one that innately lends itself to cherry-picking. Private backers are likely to choose families deemed low risk and easily fixable. Basically, those who guarantee financial gain. This could lead to ‘high risk’ families being left behind with slim chance of being supported. This is the true reality of allowing market forces to interfere with social projects. High risk becomes loss making and illogical, in others words- a bad business decision. For this reason, little good can come from mixing financial profit with morality. The Government should be looking for solutions not on the basis of cost, but in the interest of society as a whole. After all, if these 120,000 families are such a stain on our society then it’s in our collective interest to address their problems efficiently and with great care. Corner cutting is not an option. It will take serious time investment, great patience and pure determination to turn these families around for good. This envisioning of ‘social impact bonds’ fails to provide this.

For more- Nick Hurd on ‘Social Impact Bonds’

Kenneth Way.


1 Comment

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One response to “Commodifying misery: The Coalition’s answer to helping ‘troubled’ families

  1. Nahuel Tunon

    By allowing market forces to dicate social welfare policy, the government is eroding the posibility for the citizens to have a say in the matter creating “democratic deficit”. At a time when the citizens feel most disengaged with the government beliving that they do not represent them effectivly, just to give one example, the majority of the UK population did not support a war in Iraq in 2003.
    This also serves the conservative government who have persistantly put big business interest above national interests, by taking the issue of social security off the election issues as government involvment will be minimized by an ever growing private sector.

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