Meet the other Nicola Willis, Minister for Social Investment

Friday, 8 March 2024

Nicola Willis says the Government will focus on “the first 1000 days” of each child’s life and give more responsibility to non-government agencies as it tries to get more bang for each buck it spends on social assistance.

Willis, who doubles as Finance Minister and Minister for Social Investment, previously announced that next year’s Budget, in 2025, would be branded the country’s first “social investment Budget”.

By then she wants agencies to have a common way of assessing the social impact of initiatives they undertake, so they can be better held to account for their performance.

“That's about coming up with common tools and approaches and giving people some frameworks to work in.

“Demonstrably, we haven't met New Zealanders’ expectations of the effect government interventions will have, particularly for vulnerable New Zealanders, for those at risk and those who come into our community with disadvantages.”

The National Party’s centrist former leader Sir Bill English championed a social investment approach to welfare interventions and said in his 2018 valedictory speech he would have “put a lot of time into it as a prime minister”.

“Government looks after the weakest worst. It does the worst job for the weakest, and I’ve never understood the argument that the structure of delivering a service matters more than the people to whom you deliver it,” he said in that speech.

Public servant Dorothy Adams headed the Social Investment Unit that was established in 2016 during English’s tenure as finance minister and which Labour later rebranded as the Social Wellbeing Agency, before she was seconded to the OECD in Paris 2021.

Speaking from there, Adams said social investment was a term that could mean different things to different people.

“That suits some politicians and academics, I suspect,” she says.

But proponents are generally passionate about the value of measuring the long-term effects of social welfare interventions, assume they should be tailored to individuals, and often argue assistance may not be best delivered by central government agencies.

Another theme running through social investment is the old adage that a stitch in time saves nine.

Adams says there is plenty of evidence that if you can provide children with a good start in life, they have a much greater chance of developing characteristics such as “emotional regulation and positive self-esteem” that will enable them to deal more effectively with stressful events that crop up during their lives.

Anton Hemerijck, professor of political science and sociology at the European University Institute, has demonstrated a “multiplier effect” of ever greater wellbeing, higher educational achievement and employment outcomes that reduce the transmission of poverty from one generation to the next, she says.

Explaining the potential of social investment at a Waikato University conference last month, Maria English, the chief executive of Impact Labs — a company chaired by her father, Bill English — said it had worked with a community housing provider that housed people with severe mental health needs.

“We saw that in the five years before they got tailored and appropriate housing, those tenants spent an average of 100 nights a year in hospital, many of them in forensic units because they’d committed crimes related to their mental health.

“After people got appropriate housing, the average number of nights spent in hospital in the next year was 10, and it stayed low for the next five years, so we were able to calculate that saved a district health board $5 million.”

Overall, Impact Lab estimated every $1 spent on better housing that group yielded a return of $4 in terms of broader benefits and avoided costs.

But Adams says “all the evidence” in Europe is that social investment does involve spending more dollars upfront, given that governments still need to provide universal benefits and the pay-back of social investment is often long-term.

“If you spend some more money on social housing, eventually you are likely to free up some money in Corrections, but that is over time.

“You're not going to do that immediately, so you can't just say to Corrections, ‘right, give us back $10m and we are going put that into housing’.”

For that reason, social investment is a term that — in Europe at least — has tended to be bandied about by left-of-centre governments in better times, Adams says.

More recently that has often been as part of a conversation about finding new ways to support people through a new world of work that involved more frequent career shifts, she says.

Adams says social investment has “lost momentum” in Europe in the current tougher times.

“In Europe, you see very clear patterns; when a crisis hits, countries move away from social investment back to policies of austerity.

“Universal services are obviously the easiest, and quite frankly, cheapest way of working out who needs less and more.”

Despite Bill English’s focus on the “most vulnerable”, Adams says some commentators argue there is emerging evidence that “old” social spending is more redistributive than “new” social provisions.

Their concern appears to be that if social investment policies focus help on “middle class” recipients who are best able to make a case for tailored help or demonstrate progress from receiving it, or both, that could increase poverty and inequalities.

On balance, it might seem an enigma that it is the National Party championing social investment in New Zealand, and at a time when the squeeze is on public spending.

So is the Government prepared to make upfront investments over and above its current spending on social welfare to get long-term returns? Does the fiscal environment even allow for a social investment programme?

Willis says “yes, we can make additional investments”, but describes that as the tip of an iceberg and quickly moves on to stressing that social investment requires “examining much harder the investment we already make across government”.

“We are already spending tens of billions of dollars on interventions that successive governments, National and Labour, have begun with the good intention of making a positive difference to people’s lives.

“We have numerous programmes that were started to attempt to break cycles of disadvantage, to take people out of poverty to give people a better chance.”

The task that no government has been particularly effective at is saying “well, of that spending, what’s making the biggest difference? What does the evidence tell us is working?”she says.

That suggests the bulk of Willis’ focus will be on doing social investment “better” rather than doing more of it, by reallocating current funding to programmes and organisations that are most able to demonstrate that what they are doing is effective.

There would seem to be a couple of conundrums.

On the one hand, social investment espouses the benefits of evidence-based interventions, but on the other it tends to accept the best interventions will be tailored to individuals, which may mean evidence of their efficacy is hard to transfer.

Merepeka Raukawa-Tait, chair of Whānau Ora, says that in her experience the most effective social investments involve a trusted individual sitting down with people and listening to what they say are the three things they need most.

“Then you might get a picture that is not the ‘housing’ perhaps; it's that ‘I need to get to my oncology appointment every second week and my eldest daughter has to stay home and now the school is on top of me’.”

Willis says social investment anticipates that a broad-brush solution is “never the best approach” because individuals have different perspectives and challenges “and to the extent that we can cater to those we can probably have a bigger impact on lives“.

Somewhat discouragingly, perhaps, Adams struggles to point to tangible ways in which the Social Investment Unit changed people’s lives during its first iteration.

Its initial focus was on trying to improve the way in which government and non-governmental agencies could exchange information about the interventions they were making and the benefits they were delivering, she says.

“We worked on what we call the data exchange. That sucked up a lot of our energy, resources, and quite frankly, money.

“I think that was the right place to get started, but you don't see a lot of return from that investment for a very long time. Occasionally, I write home and ask how that's all going and I get a mixed bag of answers.”

Willis says she takes the point that the Government could get “bogged down in the data collection and evidence collection”.

“That would be the wrong thing to do,” she says.

But she says the Government already has a lot of information that it could and should be learning better from.

“We collect all sorts of information about people; when they go on a benefit, when they go off a benefit, when their children interact with the police, their attendance at school, government programmes they may be part of, whether they're immunised.

“What is the point of collecting all that information if we don't do a better job of harnessing it to work out what’s working, what’s not working, and how can we do better for the individual child and family at the centre of that information?”

The other conundrum is that social investment is associated with a readiness to do things differently, but it is only possible to have strong evidence that an intervention pays for itself over the long term, if it’s already been done for a long time.

What if it turned out the very best social investment was to offer all 10-12-year-olds a few child counselling sessions and a follow-up helpline to help them with any issues that might stop them reaching their full potential?

“I don’t think you can let the perfect be the enemy of the good, which is to say, there will always be something that we can do better, or new evidence; that’s the nature of human progress,” Willis responds.

“But the real questions are what do we already know and how can we apply that knowledge better?

“We already know that we do broad programmes of activity with mixed effect and we have an obligation to vulnerable people, each other and the taxpayer to say ‘what are the things that are really working that we should dial up and what should we dial down?’”

Willis says the Government doesn’t need new scientific evidence to tell it that it’s helpful if children grow up in a warm, dry, stable home.

“But what is interesting to know is what are the risk factors that mean a family is likely to end up in emergency housing?

“How could we intervene earlier so that instead of picking up a family after they’ve spent 28 weeks living in a motel room, we can stop them getting into that particular downward spiral?”

She has sought advice on whether the Social Wellbeing Agency remains the vehicle through which the Government will spearhead social investment policies.

“I’m considering advice on how we beef up the existing entity because what I want to deliver is a system that can be applied across government that gives all agencies access to a common set of data and ways of evaluating the effectiveness of spending.”

It is perhaps to Bill English’s credit that, up to now, National’s interest in social investment hasn’t become much of a political football.

Adams says that in its early days under the John Key government, the Social Investment Unit had to address considerable confusion among government agencies about its motives, including questions over whether it was just interested in “numbers”.

But she recalls that when she first met Labour’s former social development minister, Carmel Sepuloni, in the wake of the 2017 election, “one of the first things she said to me was, ‘I actually get social investment’.”

“She said she did want to have a look at it and didn’t want to throw it away, but that she saw it as an investment in people.”

Adams says the former government rebranded the Social Investment Unit as the Social Wellbeing Agency to make clear that its goal was to improve people’s “lived experiences”, and not only to save taxpayers’ dollars over the long term.

But she says that shift in perspective didn’t make much of a material difference in practice.

“Put it this way, we didn't stop a work programme and start a whole brand new programme.”

At this stage, Willis is talking about social investment in terms that appear unlikely to get the Opposition’s hackles up.

Some people who are highly politically charged might suspect the Government’s motives, she says.

“But I think we have to remember that at the heart of all of this are individuals whose lives we want to be lived better, whose potential we believe is unfulfilled,” she says.

“I think most New Zealanders come at this with a common-sense perspective, which is no political party comes to Parliament with anything other than a motivation to make New Zealand a better place and to improve the lives of New Zealanders.”