Social investment is "over-hyped", Navca chief executive Kevin Curley told an audience of voluntary and public sector representatives this morning.
Curley, who retires as chief of the infrastructure body early next year, said social investment offered interesting ideas, but initiatives such as community share issues and social investment bonds were at an early stage.
Speaking to members of the Cornwall Voluntary and Community Sector Commissioning Board, a group of public and voluntary sector staff who help voluntary sector organisations deliver public services in Cornwall, Curley said initial programmes such as the first social impact bond had not attracted widespread interest and investment had predominantly come from not-for-profit organisations.
"It is vital that the development of new funding models does not distract commissioners and the government from the actual services being delivered and the outcomes to be achieved," he said. "The understandable desire to identify new funding methods must not be confused with a need for new, untried providers at the expense of existing local providers with established track records.
"Generally, I fear social investment is being over-hyped. I hope your commissioning board will take a sceptical view."
Curley said he was sceptical about the practical use of measures in the Open Public Services White Paper and the Localism Act to increase the powers of local bodies, and about the right to challenge, which will allow local organisations to bid to run services currently being carried out in-house by councils.
"Our overriding concerns with these plans are the scale of the proposals and their dependence on the local approach to implementation," he said.
"While we strongly support the principle of localism, we do not want to see central government absolve itself of its responsibility to ensure good local services."
Curley said he was doubtful about payment by results as a tool for commissioning, because of the difficulty in raising working capital for charities to fund their activities.