The secret of Finance Minister Bill English’s radical reforms to the country’s social  services is now out.

Treasury has released a series of studies and data which show how it is possible to identify children who will later each cost the taxpayer hundreds of thousands of dollars as drop out of school, go on a  benefit, become solo parents and probably end up with a custodial corrections sentence,

It’s grim reading and paints a picture of a “Once Were Warriors” New Zealand.

But the data forms the basis of the new approach to social services which is to target these people, which the Government calls “social investment”.

And Finance Minister Bill English says it is working and will eventually save billions of dollars.

“By focusing on social investment, last year the expected cost of supporting current beneficiaries over their lifetimes was reduced by $7.5 billion – with $2.2 billion of this due to steps we have taken as a government,” he told a Wellington business audience last week.

That’s not massive – Mr English defines lifetimes as 25 years so what he’s really saying is that the potential savings could be about $300 million a year.

Even so, it’s in the same fiscal ball park as Arts and Culture, Building and Housing, Maori Development or Environment.

So who are these people?

A Treasury study shows that for the children born in 1990/91 who were supported by a parent’s benefit for more than 75% of the time before they were aged 5 were:

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  • Three times more likely to have had a referral to Children Young Persons and Family  youth justice services – indicating that they were suspected of having broken the law (12.9% compared to 4.4% of children overall)
  • Nearly twice as likely to have failed to gain NCEA level 2 by age 21 (61.2% compared to 36.3% of children overall)
  • Nearly three times as likely to have received a benefit while supporting a child, before age 21 (17.0% compared to 6.0% of children overall)
  • Three times more likely to have been on benefit for more than 2 years before age 21 (22.6% compared to 7.7% of children overall)
  • Three times more likely to have served custodial or community sentence before age 21 (19.9% compared to 7.1% of children overall)
  • The estimated total costs associated with the provision of income support, CYF and corrections services for these children were more than 3 times higher than the comparable costs for children overall ($91,200 compared to $26,400).

Treasury estimates that each of these people could cost up to $350,000 before they are 35.

What the Ministry f Social Development is now doing is correlating all this data to pin point those most at risk.

There are three key indicators; having parents who have been on benefits for a long period of time; being referred to Children Young persons and Family and having a parent serving a custodial sentence. 

The data is detailed and shows, for example, that these people are most likely to live in the far north, Gisborne, the central North Island or Whanganui.

In other data released by the Government last week those areas are all among the worst performing economies in the country and include the three highest unemployment regions.

Chief Youth Court Judge Andrew Becroft sees similar trends in his courts but he also sees some good news. Speaking on TVOne’s “Q+A” yesterday he said there was a 50% drop in young people coming to court.

“The numbers have never been lower,” he said.

But those who do appear display similar characteristics to those talked about in the treasury studies.

“ Most of the serious young offenders in the Youth Court are the most damaged, the most dysfunctional, the most disadvantaged children in New Zealand and they come from backgrounds of relative poverty, but that’s not an overwhelming causative factor<” he said.

“They come from transient families, violent families, abusive families, families where fathers or siblings are in prison, families where there’s chronic third-generation violence.

“And we are beginning to see in a small group – it’s only 2000 or so in Youth Court in New Zealand – that dominate the headlines, but we’re seeing that sort of violence that should rightly concern the whole nation.”

What has changed the whole way the Government’s social services are now targeting the most dysfunctional young people is two things — the increasing sophistication of data, and as Mr English candidly admitted last week, the need to save money.