Productivity Commission on social services

The has published a draft finding and recommendations on how to improve outcomes for NZers from social services. The Commission’s job is to constantly look at how to improve productivity (better outcomes for the money spent) in various sectors, and is modeled on the Australian Productivity Commission which has strong bi-partisan support,

It is a weighty tome at over 300 pages plus many appendices.

Some of their findings are:

  • As a percentage of GDP, public expenditure on social services is currently higher in New Zealand than the OECD average. Expenditure is also higher than common comparator countries such as Australia and Canada, but lower than the United Kingdom.
  • From a client’s perspective, government processes for delivering social services can seem confusing, fragmented, overly directive and unhelpful.
  • Existing social services are not well placed to deal with multiple and inter-dependent problems encountered by many of New Zealand’s most vulnerable individuals and families.
  • The social services system fails to create and share information about which services and interventions work well and those that do not.

So we spend more than most countries, but the services are fragmented and we don’t do well in evaluating which interventions work well, and which do not.

  • Strong evidence exists that early intervention in social problems can significantly improve outcomes for individuals and the return on government expenditure. Yet, the social services system’s investments in early intervention are piecemeal and patchy.
  • Ministers and government agencies tend to focus on the flow of new social services initiatives. Relatively little attention is given to actively managing the large stock of social service programmes that account for the majority of public expenditure.

So the solution is not necessarily new programmes, but reviewing the current ones.

  • Contracting models that give a service provider a geographic monopoly for the duration of a contract deny clients a choice of services and providers, and create a poor incentive for providers to deliver good services to clients.
  • The organisational cultures of providers and government agencies tend to be resistant to change and can be paternalistic towards clients.

And the recommendations:

  • The Government should take account of the role and value of volunteers as an important part of social services in drafting new legislation to ensure that volunteers are not crowded out by new regulation. The Government should pay particular attention to this issue when finalising the Health and Safety Reform Bill.

  • Formal contracts between an agency and its in-house service delivery arm make costs and expectations explicit. They should be mandatory when that delivery arm competes with non-government providers, and are desirable in other cases.

  • Commissioning organisations should ensure that in-house provision is treated on a neutral basis when compared to contracting out and other service models. This requires independence in decision-making processes. In-house provision should be subject to the same transparency, performance monitoring and reporting requirements as would apply to an external provider.

So only go with in house provision if it is independently verified to be the best choice.

  • The Investment Approach could usefully be applied more widely. Future welfare liability – its underlying proxy for social return – should be further refined to better reflect the wider costs and benefits of interventions.

  • The Investment Approach should be extended to operate at a cross-programme, crossagency level.

The Investment Approach has to date been very successful in with MSD.

The Commission considered a couple of hundred submissions and met with over 100 organisations in formulating the paper. It’s only a draft, but the recommendations to date look worthy and hopefully people will engage with the draft, and not just defend the status quo.

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