New Zealand

Taxpayer-funded budgeting service providers falling short

05:32 am on 8 February 2018

Four months into the job, some new taxpayer-funded budgeting service providers were falling short of meeting the number of financial advice and mentoring sessions they were contracted to provide.

Photo: 123RF

According to documents released to RNZ by the Ministry of Social Development, between November 2016 and the end of March 2017, some new providers had seen just a handful of clients, even though in some cases they had agreed to see hundreds more.

In its first four months of operation, one Auckland service got $120,000 to provide more than 1200 sessions, but had only done 28.

Another service was awarded almost $30,000 to provide almost 300 sessions, but in the same timeframe had delivered just 18.

One provider didn't complete any sessions, while another did fewer than five. Two had provided just six sessions each.

In late 2016, the National government overhauled the way budgeting services operated, including giving the programme a new name - 'building financial capability'.

The new programme takes a broader view of financial advice than just writing up a budget, taking into account the wider circumstances of each person and their whanau and tailoring the services to them.

Sixteen organisations that hadn't offered budgeting services in the past, won contracts worth tens of thousands of dollars, while a number of existing providers missed out.

Because the new programme kicked off in November 2016, after the start of the financial year, the first round of funding was tied to an eight-month contract period, ending in June 2017.

According to information contained in the documents, by the end of March 2017 - halfway into the new contracts - 10 of the 16 new providers had delivered fewer than 50 percent of the sessions they were contracted to provide.

Seven of the providers had delivered fewer than 10 percent.

By the end of June 2017, the Ministry of Social Development said just three of the 16 new providers had either met or exceeded the number of sessions they were contracted to deliver.

One of the new providers, who didn't want to be named, said the number of sessions was unrealistic and there wasn't enough funding from the government.

They said there needed to be a greater awareness of the challenges they were facing trying to reach people in need.

Some said they had to spend a lot of time developing their service, before they even started seeing people.

There wasn't a template from the Ministry of Social Development about how to do it, so they started from scratch.

Another provider said it had significantly boosted the number of clients it had seen since the first report and it would make up the sessions it missed.

But all of the providers agreed the programme would make a real difference in the lives of the vulnerable, hard-to-reach whānau they were helping.

National Building Financial Capability Charitable Trust chief executive, Tim Barnett, said it was tough for the new players - raising their profile, getting clients and designing their service.

He said some long-standing providers had lost their funding when the budgeting services system was overhauled, and this had caused some angst.

However, the decision to change the service to the new building financial capability model was the right one, he said.

The Ministry of Social Development said overall the country's 120 building financial capability providers had done 60,000 sessions - about 90 percent of their target.

It said it was working closely with the providers of the remaining 10 percent of contracts to assess their performance.

Delays in the Ministry of Social Development responding to the OIA request mean RNZ does not have reports to the end of the first contracting period, June 2017.

MSD said it would renegotiate volumes and funding if there were concerns.

As a last resort, funding can be withheld or a contract ended.