$36m job search platform for beneficiaries panned by the Treasury

The Government wants to push ahead with a $36 million job search platform for beneficiaries. Photo / 123RF

The Government has pushed ahead with a $36 million job search platform for beneficiaries, despite Treasury warning of the plan’s dubious value for money.

A March report to Finance Minister Grant Robertson repeatedly noted that officials did not support funding the employment platform: “The Treasury has a different view on the scope of Horizon One. We do not support funding to develop a digital employment platform within Horizon One, whereas MSD [the Ministry of Social Development] considers this a critical part of Te Pae Tawhiti,” the document, released under the Official Information Act, said.

A Treasury spokesperson said the agency had not changed its view since the report was written.

The employment platform – a key purpose of which will be to match prospective employees and jobs – was funded through Budget 2023, and is part of the first phase of the MSD’s multi-billion dollar Te Pae Tawhiti programme of change. It is aimed at improving the digital provision of the agency’s services.

MSD will provide the employment platform through the work of outside consultants. The agency said it is now procuring for two major parts of Te Pae Tawhiti, one of which is the employment platform.

In 2021-22, the last financial year for which the figures are public, MSD spent $15m on consultants and contractors for work on Te Pae Tawhiti. Of that, $5.9m went on Accenture “business improvement specialists” and $5.5m on PwC “business improvement specialists”.

The programme spending is awkward to track in MSD Annual Review figures provided to Parliament’s Social Services and Community Select Committee because the documents sometimes spell the programme “Te Pai Tawhiti”.

The $36m cost of the job search platform is in addition to the preparatory consultant and contractor work for the overall change programme, and it will come from a pot of $183m funded through Budget 2023, to pay for part of the first phase of Te Pae Tawhiti, dubbed Horizon One.

The total programme cost is an estimated $2.1b and $2.6b across three three-year stages.

The unfunded balance, “means MSD will very likely seek further funding at Budget 2025 for the remainder of Horizon One (as well as at later Budgets for Horizons Two and Three),” the Treasury noted.

Treasury officials said the jobs platform plan required “further analysis”, including “the objective of the change and how a digital [employment] platform is necessary to achieve that objective”.

They also noted that consideration had not been given to alternatives and “whether these could also achieve the intended objective, and analysis on the relative value-for-money of each option”.

Finally, the Treasury said it was not clear how the platform would reduce the demands on MSD’s frontline staff: “In particular, we are concerned that a digital employment platform would be of little benefit to jobseekers with complex needs or those furthest from the job market”.

Parties familiar with the plan, though not authorised to speak about it, told the Herald that most unemployed people use commercial job search platforms (such as Seek and Student Job Search), and those who are beneficiaries and who need more help from the system - for example, through ill health, disability, addiction, or disinclination to work - would be a considerable call on MSD staff time regardless of any bespoke digital platform.

MSD’s Craig Hill, programme director of Te Pae Tawhiti, said the employment platform was intended to advertise jobs primarily with employers keen to hire beneficiaries.

He said the platform would also provide such employers with information about government help on offer to them, such as subsidies. And it would connect beneficiaries to additional services such as training and funding for childcare.

“We already offer many of these services through a combination of outdated systems with substantial manual processes. Having a streamlined digital system for clients will ensure face-to-face services can be targeted more effectively to people with complex needs who may require a lot more support,” Hill said.

MSD is decommissioning its existing online employment board because it has limited functionality and was a “temporary fix”. The new platform is intended as an enhanced replacement.

Finance Minister Grant Robertson. Photo / Mark Mitchell

Robertson said it was not unusual for agencies to have “different views”.

The spending was not reconsidered in Robertson’s May effort to cut unnecessary public spending - dubbed the Fiscal Sustainability and Effectiveness Programme - or his “belt-tightening” announced in August to “clamp down” on contractor and consultant spending.

Robertson said he chose to keep the employment platform spending because the Government is “focused on getting people off benefit and into work – more than 100,000 in 2022, a record number”.

“We are using every tool in our toolbox to make that happen.”

The Government’s record on reducing Jobseeker beneficiaries is, however, mixed. Last month’s reading shows about 179,000 people remain on the allowance, only 33,000 fewer than the Covid-era peak of 213,000. And that September total is higher, both in absolute terms and as a percentage of the working-age population, than before the pandemic.

National’s shadow spokeswoman for social development, Louise Upston, promised to review the entire Te Pae Tawhiti programme: “This is a considerable overhaul and subsequently a considerable expense budgeted by the Government.

“If National is in Government after the election, we will consider the work programme carefully but are not in a position to commit to it until we have had the opportunity to review it and ensure it represents good value for money.”

Kate MacNamara is a South Island-based journalist with a focus on policy, public spending and investigations. She spent a decade at the Canadian Broadcasting Corporation before moving to New Zealand. She joined the Herald in 2020.