The New Zealand Government has changed afoot with the current funding arrangement for charitable entities. The new funding direction is being promoted by Hon Bill English as Minister of Finance and is being driven by uncertainties of outcomes achieved with social services spending and which agencies are making a real difference with their public funding.

This initiative was announced at a meeting attended by one of the NZARCT’s honorary trustees, and convened by ANCAD with Mr Ken Allen, Regional Manager – Community Investment of then Ministry of Social Development. Attended by over 30 representatives of community organisations, the purpose of the hui was to outline the Government’s soon-to-be announced changes in funding arrangements. Mr Allen explained the restructure into the three operating units for Community Investment, Youth Development and Work and Income, which will eventually merge into one.

This has prompted a call for more reliable information with the introduction of 16 social sector trials throughout the country with coordinated supervision of local voluntary service providers working together under a joint funding provision. With no new funding being made available, three private commissioning agencies have been appointed to allocate $900M spread over the three designated units of the MSD.

There was an expectation that agencies applying for funding would collaborate with entitlements based on risk profiling and information gathering leading to early intervention. This was seen in the nature of an experiment to arrive at best practice principles to achieve better outcomes.

Simultaneously three longitudinal studies are taking place under the title Growing-up in New Zealand. In these terms Government is looking more and more for good outcomes in the short and long term involving sharing of information between, and with, funded agencies. Hon Anne Tolley, who recently acquired the Social Development portfolio, was concerned to know where her Ministry was going and where funding should be directed to best effect. Ms Tolley also called for greater transparency in the allocation of funding. Her expectations are that the social sector would be much different in twelve months’ time, with evidence of bigger funded service providers already moving towards the collaboration model and greater accountability.

There were also expectations that Government would set performance targets for measurable results. This involved a drive for value for money based on professionalism. It was recognised that in the absense of paid staff many small agencies vying for public money were at a distinct disadvantage, which was further aggravated with inadequate governance and management. To achieve better results the Ministry was advocating collaboration and mergers and will nudge and fund initiatives aimed at achieving greater competencies in these areas.

The NZARCT is interested in hearing feedback from those observing or being involved with such initiatives.


One thought on “Greater Accountability in Social Services Funding

  1. The outworking of the Investment approach has been a financial crippling one, with in our own network of Associated Budgeting Consultant half of our network not receiving contracts ,this occurring in Nov 16 after delays and procrastinating by MSD with contracts under a tender process called Gets. This was well into the financial year 4 months when the good approved providers holding accreditation and provider approval were blind sided by no money and no indication as to stopping ,reducing ,delaying allocation of funds already allocated in the annual Budget Process by Govt , and at present there is $10 m according to Murray Ethridge unallocated but being held for future allocation. simply you cant spend cash in arrears you need certainty and allocation at the beginning of the financial year.
    Our own contract ended up half the previous years amount under the new Investment allocation approach. This had been rolled over at the same base line for 10 years, not keeping up with costs or outputs to contract outcomes.
    The whole process has engendered lack of trust , sleepless nights and stress for all awaiting the outcome of this policy. It has resulted in a lack of open and frank discussion due to fear of being left out of the process if you were outspoken, simply disciplined by not getting invited to meetings or loss of funding.By adopting the tender process CF Contract Grants this has introduced a Quasi Business element to essentially a Not 4 Profit sector which is intrinsically different. What is interesting is that they have forgotten that Govt is subject to Anti competitive legislation- not exempt. and is working outside of legislation . This involves unilaterally price setting of budget services tender payout at a FTE low ball amount rate, area setting of units allocated and restricting contractseg location gets 100 FTEs 80 allocated balance left 20 so that’s all you get under Gets.This may equate at less than received 10 years ago. The next is equal to cartel s when reps are invited from budget service networks to attend meetings to arrange for a new body to be set up ,they are requested to sign and adhere to confidentiality, so feedback to members is denied.The intention is that under the new regime only affiliated members hold contracts for the funds for budget and other non members of new body are excluded. The matter was raised with Mr Allen and he advised that the legal solicitors had looked at it and this was OK. When asked if MSD had applied for an Exemption or been granted from Commerce Commission who administer Trade practice act -said it didnt apply, I think this needs to be tested as this is only one perspective on this matter..
    So whats up- turbulent times, many N4Profits killed off or crippled by fund stream changes, engineering of contracts and allocation reallocation redistribution , restrict use of who you are funded for (Hardship only and less $50k clients-) without looking at working poor sector. So we are experiencing a Glacial shift in Govt Community Responsibility largely unknown or acknowledged by the Public who should be alarmed at this if they were privy to the changes.

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