Budget 2024 is premised on all New Zealanders having better outcomes in the face of major public sector budget cuts. The Government has held up their Social Investment approach as the way to achieve this, using data-driven, targeted investments in our most vulnerable communities.
The establishment of the Social Investment Agency and the initial Social Investment Fund are the flagships for leading this approach. All indications are that this will significantly ramp up in 2025. We’ve seen the first signs of intent through the recent Kainga Ora review with the promise of increased use of private equity and community housing providers to achieve better housing outcomes for state tenants.
The Social Investment approach has enormous potential but, without the necessary foundations, could become a unicorn, a mythical creation to solve deep-seated issues through the power of data, devolution, and accountability. Data and evidence will be critical in supporting this, but, success will be highly dependent on truly understanding the needs of those communities, and the solutions, from their perspective and in their context.
Bill English's original Social Investment model built the data foundations to identify the people who require the greatest investment and which social services they engage with most. It didn’t, however, go on to define the outcomes and interventions that matter the most for those people and who is best to deliver them.
Data is critical, and is more powerful when combined with real world experiences. Both understanding people in their context and gaining buy-in when defining outcomes will have greater impact.
Devolution is also an important tool because it gives mandate and agency to the organisations best placed to deliver and closest to the people who need them. These organisations also need the investment to build the necessary capacity, capability and resilience to assume this greater responsibility.
From our experiences working with iwi and community-based providers, there are some critical lessons for social investment to be successful at the flax roots:
1. Be clear about who the investment is for.
Government agencies, with the best intentions, are very good at asking communities to help solve their problems and to work with them on solutions that will meet their performance measures. We’ve learned that it’s much more important to start by asking people/communities/iwi what they need, and what good looks like, and translating that back into the language of public servants.
Actuarial approaches will tell us the names of individuals and which public services they will use the most, but people don’t live in isolation as unique data points. People are part of families, communities, hapu. The real power will come from using the data we hold and placing it in the real-world context people live in. This will help to shift the mindset from designing more or better solutions to understanding barriers and how to remove them.
Actuarial approaches will tell us the names of individuals and which public services they will use the most, but people don’t live in isolation as unique data points. People are part of families, communities, hapu. The real power will come from using the data we hold and placing it in the real-world context people live in. This will help to shift the mindset from designing more or better solutions to understanding barriers and how to remove them.
2. Be open minded about who is best to deliver.
Usually, the default is to expect more from the same government agencies or their NGO delivery partners.
Who is best placed equally applies to funding approaches. The best impact will be achieved when different funding with the same objectives is pooled together. Large philanthropic organisations can play the role of venture capitalists and private funders can be attracted through the use of incentives like Social Bonds.
This sounds obvious but comes unstuck quickly when attribution is needed. Funders need to be able to show the direct impact their contribution has made to what it was provided for. The attribution barrier can be resolved by outcomes frameworks that are designed around the impact they have for people and whānau and not around the target’s governments have imposed.
Which leads to point three...
3. Be clear about what success looks like - how people will know it is working for them.
People don’t easily fit to the rules of physics and there isn’t a guaranteed equal and opposite reaction to the investment being made. New measures of success will need to be developed with those people they are intended to benefit. This will help create a nuanced mix of social and financial measures that show the true impact over time.
James Poskitt
Director
KPMG in New Zealand
