6.2 What needs to happen

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6.2.1 Issues

Among the main issues NGOs raised were concerns about how services are commissioned. These concerns are not new, mirroring the findings of a 2009 report into DHB contracting arrangements.¹⁵³ However, they also apply more generally to all commissioning across the social sector,¹⁵⁴ and many of the NGOs we heard from are contracting with government agencies in multiple sectors, not just the health sector. These concerns also reflect issues raised by NGOs in other countries, such as Australia.¹⁵⁵

The types of issues raised in this inquiry and in other reports include:

• short-term contracts, insecurity of funding and funding levels that are not always commensurate with contract expectations, thus undermining sustainability and capacity to plan for workforce stability and service continuity
• disproportionately onerous compliance and reporting requirements, often for no obvious purpose
• multiple funders and multiple contracts to manage with no, or fragmented, strategies to guide commissioning decisions
• an insufficient focus on outcomes, with contracts too focused on inputs and outputs
• a master–servant relationship that does not foster collaboration and innovation.

Several people also spoke of a power imbalance between government funders and NGO providers, including a lack of genuine partnerships in commissioning processes and the lack of a ‘level playing field’, with district health boards (DHBs) tending to favour their provider arms when deciding how to deliver services.

The Social Investment Agency is consulting on its Investing in Social Wellbeing approach. Initial findings from that consultation identify similar dissatisfaction about the relationship between NGOs and commissioning agencies. Common frustrations include a lack of partnership between NGOs and central government and the lack of flexibility to allow for local solutions within a context of national goals.¹⁵⁶

Given the importance of the NGO sector to the delivery of social services, getting contracting and commissioning right is essential because of the potential impact on the sustainability of providers and the need to make best use of resources. It is widely recognised that the dynamics around contracting for social services and with the NGO sector are different from other types of services.

As a result, many government agencies are working to improve commissioning and contracting for social services. For example, the Ministry of Business, Innovation and Employment has a lead role in building contracting capability within government agencies and developing markets.¹⁵⁷ The Social Investment Agency produces tools and guidance to promote best practice commissioning in the social sector.¹⁵⁸ The Ministry of Health’s Commissioning Framework for Mental Health and Addiction aims to ensure a consistent, outcomes-based approach across commissioners of services,¹⁵⁹ but we have heard it has not yet been implemented.

We were told some agencies, including some DHBs, have significantly improved their approach to contracting by offering longer contracts, providing opportunities for partnering in the design and specification of services, and increasing the focus on outcomes. However, this improvement is not universal, so further improvement is needed.

Some of the issues raised, however, represent more fundamental, strategic issues that cannot be addressed simply through better contracting practices, and these have been the subject of much commentary over many years. Areas of discussion have included different partnerships between the government and non-government sectors, long-term development and sustainability, the shape of the NGO sector and the number of small organisations competing for discrete contracts being an inefficient use of resources, suggestions for amalgamation to improve long-term sustainability,¹⁶⁰ and joined-up commissioning across agencies and sectors to address complex needs.

The guidance from multiple agencies about commissioning practices provides a strong basis to start from, but these more strategic issues require a different kind of approach. The issues are universal across social services and not unique to mental health and addiction services. Thus, some form of central government leadership, including a clear stewardship role with responsibility for advising on these issues, seems essential.¹⁶¹

Earlier this century, the focus was on building stronger partnerships between government and NGOs. Within government, there was an appreciation of the need to build capacity and capability in the NGO sector. One example was the establishment in 2003 of the Office for the Community and Voluntary Sector within the Ministry of Social Development. A core function of that office was to act as a central point of contact at a national level to address cross-agency issues affecting the sector when dealing with government.¹⁶² The office was transferred to the Department of Internal Affairs in 2011 and disestablished in 2013.

So far as we have been able to establish, no central agency has stewardship responsibility for the NGO sector.

6.2.2 What needs to happen

We see a need for re-establishing an NGO stewardship role to advise on and respond to long-standing issues relating to the development and sustainability of the NGO sector. We suggest that a single government agency be identified to assume this role. If a social wellbeing agency were established (as discussed in chapter 7), it could take on this role.

Functions suggested in previous reports that could be part of this stewardship role include:

• promoting partnership, alignment and trust between NGOs and service commissioners
• advising government on how best to support the sustainability of the NGO sector (including how contracts are funded and capability is developed)
• coordinating NGO capacity and looking at how the NGO sector can help to meet wider government goals (including how to align the sector with the agreed direction and strategies for mental health and addiction to deliver results for all New Zealanders)
• promoting collaboration, information sharing and best practice between and within NGOs and between government and NGOs.¹⁶³

Several agencies can play a role in supporting and guiding improvements in the commissioning of social services. Potential exists for greater coordination of this activity, possibly as part of the overall stewardship role. Further work will be required to determine the exact scope and function of this stewardship role.

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