13 Sep 2017

Oranga Tamariki needed extra $22m to set up

7:57 am on 13 September 2017

The government underestimated the cost of setting up its flagship agency Oranga Tamariki by tens of millions of dollars, documents show.


Photo: 123RF

The government launched the Ministry of Vulnerable Children - Oranga Tamariki at the end of March as part of a fundamental overhaul of the child protection system.

IT, personnel and communication services were originally going to be supplied by the Ministry of Social Development (MSD), which was to split its corporate services between the two agencies.

The agency thought it could save money by not having its own head office services but then discovered it could not do its job of protecting vulnerable children without it.

Official documents show it later went cap in hand to the government asking for an extra $22 million a year to fund management and back-office services.

Oranga Tamariki deputy chief executive Celia Patrick said it had realised that was the best way to carry out its mandate.

"Oranga Tamariki is about a new ministry that is required to fundamentally change the way we deliver services. You could not expect to do that with just more of the same. It requires more investment, it requires new ways of thinking," she said.

About $10m a year was for executives needed to run the agency, including a chief executive and senior managers.

Another $9.7m annually was for human resources, IT and research.

The ministry said the new corporate structure represented less than 4 percent of its annual budget and was helping staff do their jobs better.

Otago University associate professor Nicola Atwool, who is an expert in social work programmes, questioned the cost, and said much of the extra money had been used in hiring expensive executives.

"That's a massive amount of money in my view into the creation, but that money doesn't seem to be about delivery of services, it's about putting people in place who they think will manage that process. And that, that worries me," she said.

Prof Atwool has held training sessions for the industry, including for Oranga Tamariki staff.

She said the new structure appeared to be management by decree, rather than involving staff in the decision-making process.

"The perception that I have is they [staff] do not feel involved and they are feeling pretty cynical at this stage about a lot of what's happening at a higher level and it feels very disconnected," she said.

Social Service Providers is an umbrella group representing hundreds of NGOs who contract with MSD and Oranga Tamariki.

National manager Brenda Pilott said the $22m would be better spent on helping children.

"Some 60 percent of the services are going to be shared between MSD and Oranga Tamariki, which is good. But there's still $22m worth of corporate services that are now additional to what was there before.

"People will have their views about whether that $22m might have been better directed to front-line services," she said.

Another $8m was spent on 70 consultants to work out the business and economic costs of establishing the agency.

Public Service Association national secretary Glenn Barclay said he was surprised the consultants had missed the need for head office functions.

"If you've engaged over 70 consultants in the service design phase, and people didn't pick this up, then that's a bit of a worry isn't it," he said.

Ms Pilott said she was also concerned that despite the amount spent on consultants, little work appeared to have been done with how the ministry intended to work with NGOs.

She said when Oranga Tamariki chief executive Grainne Moss spoke at their conference last week, she was warmly received and gave a good outline of how the ministry was going.

"But she did acknowledge there hasn't been a lot of progress in thinking about how the ministry is going to work with the provider sector - the community organisations that contract with Oranga Tamariki and MSD - to deliver services that are required under the legislation.

"It is a little disappointing to see that there hasn't been a lot of thinking about that, despite all that money spent on consultants who've been thinking about the operating model.

"The NGOs are part of that operating model and it seems that work hasn't been a priority just yet," she said.

Oranga Tamariki's Celia Patrick said consultants did spot the funding shortfall, and the new corporate structure was helping staff do their job better.

"A strong sentiment that I've picked is that they [front-line staff] are seeing some change. They are being involved in discussions around what needs to change.

"We're trailing and piloting new things and new technology that will help the front line, free them up so they can spend more time with children, and that's really critical," she said.

Ms Patrick said the extra funding on corporate services and consultants was less than 4 percent of its total annual budget of $852m.

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