Nicola Willis eyes overhaul of social service contracting

Thursday, 24 October 2024

The Government is looking to overhaul the way it contracts social services, to replace “the current set of criss-crossing and overlapping outputs-focused contracts”, Social Investment Minister Nicola Willis said on Thursday.

“It's not about elaborate evaluations and literature reviews – it’s about real-time insights into what’s working, what’s not working and what to do next to get the result that matter for the people we serve,” Willis said in Parliament during a speech to the Institute of Public Administration.

Willis has asked the Social Investment Agency to “develop prototype outcomes contracts”.

“Doing that will provide a blueprint for other commissioners and providers of services to follow. But also proof to ourselves we can scale that over time.“

It would mean once contracts have been negotiated, “providers can choose how best to achieve the outcomes everyone wants … To move away from a focus on serving the needs of a government department and instead take radical accountability for the results they deliver for the people they serve”.

Willis said changing the way that social services are commissioned “will be a critical component of the social investment approach”.

“Contracting in this way has the potential to raise the bar for investment decisions across the public service. Not only does it require agencies to understand the needs of different groups, it requires them to assess the impact of the services they have delivered by measuring and comparing results.”

Willis said it would need agreement and consultation between funders and providers about data.

“What outcomes will be measured? How will those outcomes be measured? How will providers demonstrate that they are learning what works and doing more of it? How will funders use this data to inform decisions about future investments?”

The Auditor-General recently launched an inquiry into Oranga Tamariki/Ministry of Children’s funding decisions for providers that roll out services to vulnerable children and youth.

“Concerns have been raised with our Office about the processes Oranga Tamariki has followed to manage its contracts with social service providers, particularly its decision-making process for the 2024/25 contracting round,” a statement on Parliament’s website stated.

Oranga Tamariki has come under the microscope after The Post first revealed in June the start of a saga of funding issues across the country, as the ministry overhauled its funding structure which saw many contracts reduced and payments withheld.

Willis also said the Government was continuing work to create a Social Investment Fund “that will directly commission outcomes for vulnerable New Zealanders and work with community, non-government organisations and iwi providers”.

The fund will be managed by the Social Investment Agency and may be able to be applied more broadly to the social sector.

“Initially the fund will be small and targeted, but I anticipate it will grow over time,” she said.

Willis envisioned it could also be a “home for funding from philanthropists, investors and anyone who wants to deploy their money in service of social good”.

Budget 2024 noted there was “some commitments that are yet to be progressed and funded by the Government”, which included future funding for the Social Investment Fund.

Earlier in May, Willis announced the fund would begin investing in 2025.

“Over time I would expect to grow in partnership with other funders to deliver at a significant scale with a wide portfolio of investments in social services,” Willis said at the time.

“The fund will be expected to measure its investments and adapt them if they are not returning results.”