The founder of Senscot, a network of Scottish social enterprises, has said he’s astonished at the lack of outrage by leaders in the voluntary sector to the government’s new payment-by-results culture, warning that it will lead to groups of people which no-one will work with.

Since coming to power last year, the government has consistently told charities to expect more statutory contracts with payment-by-results models, such as social impact bonds.

However, Laurence Demarco, founder and director of Senscot has told civilsociety.co.uk that he believes payment-by-results is a totally wrong direction to take:

“When you are paid if you get results, you will be inclined to select people who will give you a result, which will lead to whole groups of people which no-one will work with - it's inevitable,” he warned.  "I'm surprised at the lack of outrage from voluntary sector leaders."

He added that social impact bonds were the “emperor with no clothes” and accused the government of making it up as it went along.

Demarco also criticised Big Society Capital for planning to invest extensively in social impact bonds as it was a “totally unproven mechanism”.