Government’s emphasis on outcomes rather than inputs will be disruptive and could open the door to more non Governmental services providers says Finance Minister.

The new emphasis on social investment will be disruptive to the way Government conducts itself and is likely to lead to a move towards private providers of many social services.

Finance Minister Bill English suggested this  today in his annual address to the Institute of Public Administration — the civil service’s professional organisation.

His wide ranging speech focussing on social investment which aims to focus on outcomes by putting the “customer” (as English termed users of public services) first.

And he confirmed that the public service is being turned inside out by the increasing amount of data that is available to it.

“The biggest public sector challenge for the next few years will be adapting our existing departmental systems to focus more on getting better results for New Zealanders,” he said.

“Getting better results will require systematic measurement, information sharing, contracting and evaluation of interventions.”

And so Cabinet has directed the Treasury and social sector agencies to develop a new Budget process, which it is calling social investment.

He said ministers would have far more information about populations than is available through the traditional budget process.

“They’ll be able to see what services are delivered where, and the results those populations are achieving in health, education, employment, and so on,” he said.


“This will help inform where the next dollar of government spending can make the greatest difference.”

But the big change would be that rather than purchasing inputs ministers would be purchasing results.

“For example, the Government will purchase reductions in recidivism, rather than rehabilitation programmes.

“It will be up to providers to judge how to achieve those results in view of local circumstances.

“We’ll be tracking results at an individual and family level.”

He said testing for effectiveness would be central to the process and that funding would be repriotised rot providers who got results.

“Social investment will not be suitable for all public spending, or even a majority of it.

“But I can tell you it is here to stay.

And make no mistake.

“This social investment process will be disruptive to the way the Government conducts itself.”

The focus on results will be a powerful lever to get more non-Government providers into services delivery.

“That means there will increasingly be competition for who can make the best use of that information to get better results.

“This Government wants to increase that competition, so we have more people chewing over our problems