Will social investment improve the lives of New Zealand’s most vulnerable? 2026 should begin to deliver some answers.
By Belinda Himiona, Kaiwhakahaere Matua, Te Pai Ora Social Service Providers Aotearoa
This election year, a much-discussed approach to funding services to New Zealand’s most vulnerable whānau and children will be put into action.
The newest iteration of the social investment model finally got underway last November, when the first seven recipients of the social investment fund were announced. The social services sector has long called for changes to how we are funded to deliver services to families and children in need. We are cautiously optimistic about the potential of social investment, but many questions remain about how it will work in practice. These include some significant issues around data sovereignty and how we measure the ‘success’ of services.
Over the coming months, as the National-led Government makes its case for re-election, community-based family and iwi support organisations across the motu will be watching this space with interest. If successful, social investment could be a small step towards the larger transformative changes that the sector needs.
What is social investment?
Social investment is an approach to funding social services (including family and youth support services, youth justice, and child services) that has been debated and trialled in various forms in Aotearoa New Zealand since the early 2000s. It differs from traditional approaches in its focus on data and evidence to inform decisions about future investment and its emphasis on early intervention. It asks providers to deliver outcomes (measurable improvements in people’s lives), with outputs (countable results such as the number of clients attending counselling sessions) forming part of the evidence base.
In August, the Social Investment Fund was launched by New Zealand’s new Social Investment Agency (SIA). With $190 million in the fund, it is a tiny portion (less than 3%) of the estimated $7 billion invested in the overall sector by Government. The first funding round invited applications from providers who served ‘priority cohorts’: children with parents in prison, or recently in prison; children with care-experienced parents and children stood down or suspended from primary school. 187 applications were received, with seven successful providers.
The fund will be trialled through a number of initial contracts (up to 20) in the first year. The overall intention is for this to be a proof-of-concept with more funding to be invested using this model in future budget rounds.
Early positive signs
Done well, social investment could flip the current top-down approach to social services funding on its head. Currently, government agencies largely determine what services will be offered to those in need, and then community providers bid to run those services. Social investment could see providers making decisions about what services are needed locally, based on consultation with communities and their own in-depth knowledge of these communities. They would receive government funding to then run those identified services. This is an important opportunity to empower communities.
Another aspect of the Social Investment Fund winning the approval of the sector is the focus on contract consolidation. With up to 17 different government funders, many providers are tied up in multiple contracting processes. Our services often sit across a disjointed funding patchwork creating varying reporting and data requirements that can be extremely challenging to manage. Any work to break down those funding silos is welcome and, we hope, a signal that government agencies are ready to work more collaboratively and provide the certainty of longer-term contracts.
What do we measure?
To access the Social Investment Fund, social sector organisations will need to report on the impact of their work in a much more detailed and comprehensive way. Careful thought is needed around what providers are being asked to measure and how this measurement is carried out. The children and families using our services must play a role in deciding what we measure – after all they are the only ones who can tell us if services are making a difference in their daily lives.
We also need measurement models that work for the New Zealand context. Some already exist, but there is an urgent need for more, including those that reflect Māori models of success and that can demonstrate positive outcomes for Māori communities. These models must be accessible and affordable for providers as few have the resources necessary to contract data insights companies to do this work.
Data readiness
Measurement will mean more targeted data collection and analysis by providers, which is complex, skilled work. Our sector is at varying levels of readiness for this work – with part of the delay due to a lack of collective understanding about what the Government wants us to measure.
This lack of readiness should be of no great surprise to government funders. We are a historically underfunded sector; in 2019, we were funded less than two-thirds of the actual cost of delivering contracted services. Funding constraints have only continued in the years since. Frontline services have received the bulk of investment, understandably, with less going towards roles that support these services, such as building data infrastructure and learning how to use measurement tools.
Community providers are concerned that building the data capacity needed for social investment will divert funding and time away from core work with tamariki and whānau. We cannot afford to lose frontline resources as the need in our communities remains immense. This is a particular concern for smaller-scale, rural and iwi providers.
A possible solution could be the formation of regional data hubs where groups of providers work together, sharing capacity and creating more efficient systems for gathering and managing local and regional data. If this is done carefully, it could potentially help the sector to effectively allocate social investment.
But as we build national data infrastructure and collection frameworks, fundamental questions around data must be addressed: Who owns the data? How will it be used? How do we protect it? This conversation is already happening at a sophisticated level amongst many iwi providers – but much more consideration is required. There could be real reluctance to share data from some communities if these questions can’t be answered by SIA, especially when recent events have shed light on the risks around management of sensitive data.
Level of need
A final, key element that has been missing from the social investment debate, is understanding the level of social need that currently exists in Aotearoa New Zealand. We must have a realistic picture of this need across regions, so we know the level of service required. Only then, can government, providers and communities hope to improve the lives of our most vulnerable children and whānau.
Social investment may be an opportunity to more efficiently allocate resources to the sector but addressing need should always be at the forefront of how those resources are distributed. We would be concerned if ‘efficiency’ was used as a pretext for a further reduction in funding for social services. As Max Rashbrooke wrote in his piece in December, poor implementation of the social investment approach can easily end up looking more like “social disinvestment”.
