Public sector transition - to what?

Dorothy Adams, head of Bill English's social investment unit, is from the Ministry of Social Development (MSD), has a State Services Commission (SSC) email address and is quartered in the Treasury. Meet the new public sector.

Actually, most of the sector will remain in its various bunkers.

But another different bit is the proposed ministry for vulnerable children (as The New Zealand Herald labelled it last week). It is intended to be able, like the Accident Compensation Corporation, to buy the services it needs for its at-risk children.

That is not the way ministries and departments have worked since the 1988 reforms. It is potentially disruptive, because to make its purchases the ministry will need some funds that now go to other agencies, disturbing budget lines and protected patches.

But the patch protectors are adjusting. There is a ``board'' of chief executives of social ministries. Among other things, it is overseeing work on some of the knotty questions raised by mining and sharing data.

That is a purpose of Ms Adams' social investment unit (SIU). It has no formal place or status as a ministry, department, Crown entity or commission. Asked about that last week, Mr English, to whom it reports and who wants it to be independent, said it ``has a place in the Cabinet'' - that is, with him.

Just as well, because the Treasury is kicking it out and it will need backing if it is to pay rent somewhere, which, apparently, will not be in the MSD's new premises, although, intriguingly, it is the MSD that is advertising on its careers site for an SIU senior executive assistant. The SIU does not yet have its website up.

One bit of the SIU's job is to build an exchange platform for data on those being socially invested in, which is to be shared by agencies doing the investing and by non-profits doing some of the legwork - and, possibly, local councils which get involved.

An SIU print blurb talks of ``automatically, and in near real-time if desired, the highway will source, collate and deliver information to providers to support their service delivery''.

This involves complex privacy issues, for which social agencies are having to gear up. That multiple outfits are involved adds to the risks.

Mr English also wants public access to the cost-benefit data supporting social agencies' successful budget bids for funds.

The SIU's other main job is ``providing guidance on what social investment approach means in practice'', right down to the front line. That includes evaluating results and so the ``return on investment''.

The focus is on ``outcomes'' and so has long-time horizons, requires built-in resilience in the programmes and ties in with the balance sheet approach the Treasury and Mr English want to bring to the Budget, now in effect a profit-and-loss account telling only part of the story.

The Treasury links this into its ``living standards framework'' of general wellbeing (not just GDP). It is working with other agencies to develop ways to measure social, human and natural resources ``capitals''.

One particularly challenging measurement just starting to be addressed is the return on investment in early childhood education. That involves very long-time horizons.

These sorts of ``explorations'', as some call them, in effect ask how far the investment approach can be taken.

The original approach was to actuarially calculate the cost of inaction - say, a person on a benefit for life or returning to crime after prison - and, from that, work out the dividend from state intervention that averts such fiscal costs.

This ``forward liability'' approach is still at the heart of ``social investment'' but is now a measure more than an objective, backers insist.

Mr English has narrowed it to those ``most at risk'', from whom the greatest return can be secured and to whom funds now spent elsewhere could be diverted.

Mr English particularly focuses on the ``most vulnerable children''. Hence the Herald's title for the new agency. (Wags' alternatives: ``Ministry for Forward Liabilities'' or ``Ministry for Children's Futures'', as in: ``I'm from the Government, I'm here to design your future.'')

The tight focus is intended as a starting point to demonstrate the approach can work and thus build credence before it is widened.

But critics say a tight focus risks stigmatising children it deals with and thus undoing some good work and the return on investment.

Labour's Jacinda Ardern adds that it leaves out many thousands of others ``at risk'' and many tens of thousands more in some need, undervalues investment in all children and doesn't cover underlying influences on childhood wellbeing, including the houses they live in.

Official Labour policy is for a Ministry for Children - all children.

In effect, Ms Ardern and Labour want a wider notion of ``investment'' to focus on assets. And if they get into office, they would find the Treasury has been edging down that track.

They would also find a public sector ``investing'' in organisational transition. To what, no-one yet knows.

Colin James is a leading social and political commentator.

ColinJames@synapsis.co.nz

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