Government’s new social investment approach puts cost ahead of quality

The PSA says the Government’s intention to focus on cost ahead of quality in social funding is a retrograde step that could destabilise the sector and make it harder for providers to deliver better services to all who need them.

The new policy of “social investment” using cost-benefit analysis to allocate funding was announced yesterday in a speech by Finance Minister Bill English.

Richard Wagstaff, PSA National Secretary said, “This looks like a 1990s policy where the Government retreats into funding and leaves provision to others. It didn’t work then and it won’t work now.

“This approach could be disruptive as funding is switched from one provider to another and will incur extra costs. There’s also the danger that targets and outcomes will be set too narrowly and vulnerable people will fall between the cracks.”

“The sector needs a stable environment where restructuring is minimised and there is real investment in improving social services, not the lottery of contestable funding.

“The public sector already has the people with the skills, knowledge and relationships to improve upon an already good performance,” said Mr. Wagstaff.

“What we need is a commitment from the government and from chief executives to listen to their frontline to improve outcomes for the public, instead of more structural change.

“ The emphasis on cost-benefit analysis will not address the often complex messy problems that our public services face and it looks like yet another attempt to reduce government spending on social services and contract out services to private providers.”

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