First social bond not progressing; funding cuts to Lifeline and Strengthening Families

Media has reported that the first social bond will not progress and the provider has withdrawn from the scheme.

The first bond was to fund a programme to support people with mental health problems get into the workforce and put employment consultants in GP practices. 

However Radio NZ has reported the provider, Wise Group, has withdrawn from the scheme. Wise Group is a member of Platform Trust, a national network of community organisations that support people with addiction and mental health issues.

Finance Minister Bill English said "I understand [with] the first one negotiations have stopped and it looks like the parties have pulled back, so clearly it wasn't a successful conclusion to that, and we've learnt a lot and we'll now get on with the next one."

Labour's Health Spokesperson Annette King said "It was never going to fly because there was no need for them to put in another funder. All the government needs to do is to fund a group like the Wise Group direct and cut out the middle man."

The Public Service Association has also criticised the scheme: "The National government should see the collapse of this project as a signal to stop messing around with alternative funding schemes," PSA National Secretary Glenn Barclay said. "And when essential services like Lifeline are struggling for funds and have to close their doors, it’s irresponsible to waste taxpayer money fiddling about with failed funding models."

Radio NZ reported "According to official documents, $1.62m has been spent getting the bonds to this stage. The documents show in the 12 months to the end of April 2016, $799,000 was spent on the social bonds pilot. The development of the first social bond accounts formed approximately $550,000 of this. In the 2013/2014 and 2014/2015 financial years to 1 May 2015, approximately $819,000 was spent on the bonds programme, including consultants."

The social bond scheme was announced in 2015 as a new approach to funding community organisations. Radio NZ has previously reported on issues with implementation of the social bond scheme.

Related news - funding

Lifeline

Lifeline Aotearoa has announced they will be forced to close in 2017 unless they receive several million dollars in donations. Lifeline lost government contracts in 2016 and cut one third of its staff. Lifeline has been running for 52 years, and answers up to 15,000 calls a month on its 24 hour helplines. 

A recent report by the Suicide Mortality Review Committee (May 2016), Ngā Rāhui Hau Kura: Suicide Mortality Review Committee Feasibility Study 2014–15 found that 549 New Zealanders took their own lives in 2012.

Strengthening Families

A number of Strengthening Families contracts have also been cancelled, with funding shifting to Children's Teams. Radio NZ reported "More than a quarter of the 114 Strengthening Families contracts in 10 areas are being cancelled and $1.3 million reallocated to the newly established Children's Teams." 

Green Party Social Welfare spokesperson Jan Logie said "The Ministry of Social Development has admitted that the threshold for Children’s Teams is higher than for Strengthening Families – children have to be in severe distress before they are referred to the Children’s Teams. By shifting funding to Children’s Teams, the Government is moving the ambulance even further down the cliff."

The Ministry of Social Development Deputy Chief Executive Murray Edridge has said evidence for Children's Teams is limited, but it is important to avoid duplication: "They've only been in existence for two years so we don't have that degree of evidence yet, what we do have is some very good early indications is that for certain children and in certain circumstances, the Children's Teams are highly effective."

Related resources

Community Research has made an unpublished paper available on their website:

Nowland-Foreman, G., (2016). Outcomes, Accountability and Community & Voluntary Organisations in New Zealand: Holy Grail, Black Hole or Wholly Possible? Centre for Not for Profit Leadership, Auckland.

Related media

What happens when social services become a private investment product?, The Spinoff, 25.05.2018