Speech to the Otago University Symposium on Social Enterprises Performance

E nga mana, e nga reo, e te iwi o te motu, tena koutou, tena koutou, tena koutou katoa

Thank you for the opportunity to speak with you today.

There are things non-government organisations can do that government just can’t.

NGOs move faster and get alongside families and communities in a way Government can’t.

They often know their communities best.

The Government still has a role to play, by providing a framework, direction and support

Sometimes though, the best thing the Government can do is get out of the way

The Ministry of Social Development funds around 2,400 NGOs, to a total of $530 million a year through just under 4,400 contracts.

The Government is responsible to taxpayers for that spend and we have to assess ‘outcomes’ and results to know what works and what doesn’t.

It’s not about money, it’s about making a difference for communities.

While government spending on social enterprises has increased over the years, it would be fair to say that results vary.

What is important is taking the opportunity to evaluate, question, challenge ourselves and each other about spend.

We can’t expect to keep doing the same things and expecting to get different results.

The Community Response Fund is one example of where we needed to step in and do things differently.

When this Government took office, the Global Financial Crisis hit. We had to respond quickly and did in a number of ways.

In terms of the NGO sector, we launched the Community Response Fund in 2009 to support the sector through the worst of the recession.

It was basically to help those dealing with increased demand at a time when budgets were tighter – with a decreasing availability of grants, and donations for other sources.

It was a short-term, time-limited fund, and grants were provided for up to twelve months.

In total 823 organisations received just under $80 million in funding through the CRF.

There were two key components to the CRF. Firstly, Financial Crisis Funding was provided for social service providers who were experiencing severe financial difficulty.

Secondly, Demand Funding was made available to support an increased demand for services, including innovative responses to pressures due to the economic downturn.

Collaboration between organisations is key. Overlaps and inefficiency that were prohibiting the delivery of services can be addressed through good collaboration.

We know that three providers offering the same service in the same community doesn’t necessarily mean a better service from each – often it means overlaps.

What the CRF did was encourage NGOs to work collaboratively and share resources.

Regional and National Panels, made up of key government, community, philanthropic, Māori, Pacific and ethnic representatives assessed the applications.

When the GFC hit, we had to change the way we did things – the Community Response Fund was an example.

Contract Mapping was another initiative pioneered by MSD and launched in 2010.

Contract mapping started from a simple question: how do we know the effectiveness of government spend without knowing what and where it is being spent?

Communities and organisations don’t exist in silos, although sometimes things operate that way.

Wouldn’t NGOs like to know what other services are being funded in their area?

Contract mapping does that by literally mapping out government funding in a particular area, showing where funding goes and to whom.

The Contract Mapping site holds info from Education, Health, Justice, Social Development and Te Puni Kokiri.

If you were to look on the contract mapping website you’d see just over $15m is going into social services in Dunedin.

That boils down to about $125 per person.

That’s not a small amount. $125 a week will get you a room to rent in Stoke, or a night’s accommodation in the Coromandel (in the winter).

Contract mapping was never intended to be a silver bullet.

It was a significant step in terms of transparency and really being able to examine what’s going on in our communities.

Funding going directly into communities has the potential to make a real difference.

But that’s the key. It has to go to the right places and make a difference.

The Christchurch Earthquakes meant government and NGOs had to completely re-evaluate the way they operate.

Before the earthquakes NGOs in Christchurch already had high levels of relationships, connections and networking between services.

This enabled a rapid and innovative response following both the September 2010 and February 2011 earthquakes.

The Earthquake Support Coordination Service is a good example of this.

Initially set up to support displaced families and households after the September 2010 earthquake, it built on the “Right Services, Right Time” approach.

This simply means families and individuals needing support can access the services they need, no matter which organisation they approach for help.

The Earthquake Support Coordination Service developed this to ensure wrap-around services and a triaging process was put in place following the earthquakes.

This ranges from “light touch” support for people who are managing their own situations through to intensive wrap-around support for those needing it.

After the Christchurch earthquake in February 2011 agencies responded in innovative ways to continue to provide services to their clients.

With unsafe or damaged buildings many NGOs co-located with other services.

For example, Nga Maata Waka opened up Nga Hau E Wha Marae to a range of displaced services and agencies.

These include Te Puna Whaiora, St John’s Ambulance, Fletchers Hub, Child, Youth and Family, the District Court, Probation Services, Corrections and Earthquake Coordinators.

This co-location has fostered a more connected working environment for agencies and services and provided a one-stop-shop approach for locals.

We can apply this way of working in other parts of the country.

High Trust Contracts were first implemented in 2009 and are a simpler, smarter way of funding and contracting.

At the end of February 2013 there were 166 High Trust Contracts in place.

Essentially, I wanted to make sure we didn’t slow down the good work that trusted NGOs do with multiple contracts and audits.

This funding model allows high-performing providers in the social sector get on with delivering effective services to communities.

Families and communities don’t benefit from community providers spending hours ticking boxes and filing endless paperwork.

Under High Trust Contracting there is a short and simple funding agreement, and up-front annual payments.

We focus on meaningful outcomes, with results that are agreed-on and well-defined.

Each contract is different - a customised approach recognising the unique needs of families and ensuring that the contract reflects this.

We’ve identified the 30 providers with the most funding across government.

The Top 30 receive over $400 hundred million in government funding.

The largest of these groups receives over $200m in funding, mostly from Health.

The second largest receives under $50m, while more than half of the Top 30 receive under $5m.
Work will follow the principles of High Trust Contracts by bringing together multiple contracts to free up time and money so providers can focus on their core services.

It makes sense to start with the Top 30 Providers who receive the most government support.

These providers represent a significant proportion of our social spend.

A lead agency from the Ministry of Social Development, Health, Education or Justice will be identified for each.

They’ll work through a phased process to move to the ‘one on one’ contract and audit approach.

Over two-thirds of the Top 30 providers will also see changes through the ISO programme, which I’ll discuss shortly.

The White Paper for Vulnerable Children represents a seismic shift in the way we’ve previously done things.

The White Paper directly targets resources, interventions and support to children who are currently being abused or seriously neglected, but also crucially to those at risk.

The Children’s Action Plan is now underway and much is happening.

Children’s Teams are being set up in Rotorua and Whangarei.

They’ll take responsibility for vulnerable children in their area, creating individual plans to better protect each child that comes to their attention.

One person – the lead professional - will make sure everyone sticks to the plan.

Regional Children’s Directors will coordinate funding and services – they have that power.

I recently visited the team in Whangarei and was hugely impressed by the speed they’re progressing with, and how their whole of community approach is working.

Each team will be different. And each team will feature a unique collaboration between agencies and NGOs depending on the needs of the community.

The Government won’t decide how they operate.

Communities themselves will adapt their Children’s Teams to work best for them.

Children’s Teams illustrate our collaborative, community focused approach.

The people who work for NGOs are on the frontlines in our towns and cities, dealing with vulnerable families every day.

The feedback we received, informing the key components of the White Paper, was overwhelming. I toured the country with the Green Paper.

We received 9,985 submissions from New Zealanders including over 2,000 from children. Many of those thousands of submissions were from the NGO sector.

Social Sector Trials involve getting social service providers working together better.

It involves MSD, Health, Education, Justice and the Police working with communities.

Multiple contracts are pulled together, and managed through a local Trial Lead.

We’re primarily focused on young people – combating youth offending, alcohol and drug use, preventing truancy, and supporting them into work, training or employment.

In 2010 Levin was selected as a Trial location.

Three contracts totalling around $350,000 were pulled together and transferred to the Trial lead – local NGO Life to the Max

Youth Coordinators have been working in schools and the community, identifying what young people need to help them reach their potential.

Coordinators working in colleges have become part of the staffing team.

They’re getting involved coaching sports team and helping out with after school groups.

Because of this they’re doing something small but significant - they’re learning the names of each young person they work with.

They’re earning trust, and they’re making a difference.

Since April last year the Activating Youth Fund has helped 147 young people in Levin take part in cultural, sporting, and recreational activities.

This sort of meaningful involvement is getting the attention of the town – as Life to the Max have said, it’s “pleasing to hear our community talking positively about our young people.”

We know long-term change is best driven by people who know their communities.

That’s why the key to the success of these trials is getting local people involved and working together.

Invaluable lessons have been learnt through initiatives like the Community Response Fund, contract mapping, and the experience of the Canterbury Earthquakes.

All of this has gone into developing the Investing in Services for Outcomes initiative, known as ISO, which was unveiled last year.

ISO will contain some of the most significant changes we have made to the way we work with NGOs and social sector providers.

These include introducing a single contract, and a streamlined approval, monitoring and report framework.

We’re calling this ‘one and one’, and will also build on the work already done with High Trust and Integrated contracting.

By July this year we will introduce a single approval process for all providers, and move the 79 providers receiving more than $1 million from MSD to ‘one and one.’

The small number of organisations receiving more than $4 million will be increasingly funded as they achieve results for clients.

We’re also looking at options to reduce compliance and increase efficiency for those organisations receiving less than $1 million a year.

Like the joined-up contracting approach, we’re working to reduce the burden of contract management administration.

We’ll also be shifting funding to results-focused services that can make a proven difference and requiring results to be demonstrated in order for providers to receive on-going funding.

As the Global Financial Crisis taught us, increasing the capability of support providers is essential to building resilient, successful organisations.

The Capability Investment Resource has been established to support a stronger, more adaptable and joined up sector

Over time this will encourage and support providers to collaborate more effectively and efficiently, to create better outcomes for communities.

Another hugely exciting development for the future is the restructuring of the Families Commission, to form the new Social Policy Evaluation and Research Unit, SuPERU.

We will be reprioritising at least $14.2 million over four years to set up SuPERU.

SuPERU will enable the Families Commission to take on a new role as a place of best practise, independent monitoring, evaluation, and research.

The Prime Minister’s Chief Science Advisor Professor, Sir Peter Gluckman, had identified a gap in monitoring, evaluation and research in the social sector.

We want NGOs to be able to get good, reliable and independent advice and research – from an organisation, that doesn’t also fund them

The Families Commission to better measure how effective government, NGO and corporate initiatives have been, and will be, for families.

These are the initiatives we have put in place to support the NGO sector to do what it does best – get in alongside communities to make a difference for New Zealanders.

I’m now very happy to take questions on what I’ve talked about, or what your vision is for the social enterprises sector.