How New Zealand plans to spend $61bn on social services
By Medha Basu
Exclusive interview with Dorothy Adams, Lead of the Social Investment Unit of New Zealand.
The New Zealand Government spends $61 billion (~US$42.5bn) on social services annually, and it wants to ensure that this money is spent right. Ministries have started using more rigorous evidence to decide what policies they make and which services they deliver.
But “we need to be far more data-informed than we are at the moment,” believes Dorothy Adams. It’s her job to make this happen.
A lawyer by training, Adams leads the country’s new Social Investment Unit (SIU), a team of data scientists, economists and ICT experts. She shares with GovInsider how she is advocating for greater use of data in New Zealand’s social services.
Do social housing programmes work?
Despite the billions spent on social support, there is still a small but “very vulnerable” group of New Zealanders, for whom “outcomes really aren’t improving”, she says.
SIU was set up to ensure the government can improve the lives of these and other citizens using objective and accurate data, rather than qualitative views.
The unit will help the government understand the needs of these people, and measure the effectiveness of services and the long-term impact of current investment.
Ministers will be able to determine whether the government is delivering on expected results. Meanwhile, NGOs and frontline staff will be able to fine-tune their services and make them better targeted.
One of the key questions the unit has set out to answer is: “can you measure the fiscal return on investment of any social services expenditure or programme?” Adams says.
“Now, we think you can, but we needed to test that,” she adds. The unit tested this idea on New Zealand’s social housing programme. Under this scheme, the government rents out subsidised public housing to residents who are not able to find or afford their own home.
Is this helping improve the quality of their lives? SIU’s evidence shows that it does. People spend less time in prison as a result of living in social housing instead of on the streets.
It also leads to fewer school dropouts. “We can see that education costs go up, but that’s a good thing because kids are staying in school longer,” Adams says.
The unit is also working with the Ministry of Justice, which has been an early advocate of using data to cut crime. The ministry has built a model that predicts how many times every resident in New Zealand is likely to commit a crime or be a victim over the course of their lives.
It also revealed that crimes are the result of deeper social problems - which means the ministry must work closely with others to cut crime.
The next area of work for Adams’ unit will be mental health and addiction. Helping people recover from mental illnesses and drug addiction can have a long-term impact across government sectors.
The unit will look into who is receiving mental health services; what the costs are; how much demand is unmet; and opportunities for further investment, she says. Increasingly, the unit will focus on these kinds of programmes, where there is a cross-government impact.
This is something that “traditionally, we haven’t been very good at doing before,” Adams says, but are now changing. “Ministers will expect us to look at the impact of interventions not just in one place, but across different agencies, populations and domains,” she says.
Data and tech
Adams will influence agencies to change their thinking by making it easier for them to do so. A key role of the unit is to set up the infrastructure and analytics tools governments and NGOs need to use.
“In order to do good social investment analysis, you have to have good data,” she says. The “most critical piece of infrastructure we’re building” is a data exchange to share data across government and non-government agencies in the social sector.
This will allow private sector partners to share their data automatically and safely with the government, and vice versa, for the first time.
“The key in all of this is of course the security and privacy,” Adams says. Government and private organisations must get licenced and approved to share and receive through the data exchange.
They are legally bound to securely hold and appropriately use any information they access. “The key in all of this is of course the security and privacy.”
Currently, the government is testing the data service with anonymised data, and Adams is confident that this will prove successful.
Once it does, SIU will move to sharing identifiable data, and more agencies and NGOs will be phased into the system. SIU is also building analytics tools for ministries and agencies to use.
One that it has just completed is the “investment tool” that allows agencies to measure the return on investment for different variations of a service.
Another tool it has built is the Social Investment Analysis Tool. This helps policymakers understand how spending on one programme affects outcomes in another. Civil servants without a data specialisation will be able to use these. After all, not every agency and unit will have officials with specialist data skills like SIU.
“We want to get to a place where more people without that really particular specialisation can use these tools,” she says.
Purchase only the best
In the future, the purchase and delivery of social services by the government will be based on measurable outcomes rather than input.
The focus will be on “purchasing or investing in the best services - no matter if they are delivered by government or non-government,” Adams says.
This may mean that some services are outsourced to non-government partners who can perform them better. With improved data, there will be more accountability, and the government will have greater confidence in the people they partner with.
“They can let more of the control go to those who are best placed to deliver the services,” Adams explains. The future of SIU is as yet undecided. It was set up as an independent unit in March 2016 with funding of NZ$6 million approved until June 2017.
Whether the unit will continue to exist in this structure or take a different form is now under consideration. There are no uncertainties, though, on how serious New Zealand is about the social investment approach.
It has political backing, with Amy Adams appointed as the Minister Responsible for Social Investment. “Whether agencies like it or not, you can’t avoid social investment,” Adams says.
“Whether agencies like it or not, you can’t avoid social investment.” Internationally, SIU has generated interest among governments keen to learn about this new approach, including the United Kingdom and Australia. Adams hasn’t yet found any other country using the same rigorous approach to improving social spending.
“We’re kind of forging our own way,” she says. While the SIU might take a different shape or form in the future, the approach it has established is here to stay.