Budget 2010: Bigger role for communities in allocating shrinking budget

A big chunk of taxpayer-funded social spending is going to non-government social service agencies to divide among themselves in each region.

Social Development Minister Paula Bennett has effectively abandoned the former Labour Government's promise just before the last election to fully fund "essential" family services delivered by non-government agencies by 2011.

She is over-delivering on Labour's planned budget with a temporary $104 million "community response fund" to compensate agencies for the recession in the two years to June next year.

Beyond that, Labour's plans will be cut by $24 million in the year to June 2012, $31 million the year after that and $18 million in 2014.

On top of that, $30 million a year from next year will be diverted to the new Whanau Ora scheme.

Of the $76 million a year left for family services by 2014, $35 million will go into a new "community response model" to be allocated at a regional level by community panels.

Council of Christian Social Services chief executive Trevor McGlinchey said the move was a "bold initiative" worked out by officials and an advisory group of non-government agencies.

"It's really saying to communities, we think you're well positioned to know what works best in your communities."

Ms Bennett said part of the new money available from July would fund non-government agencies to "integrate service delivery, remove duplication, merge backroom functions, improve skills training and share best practice".

The balance would be available "to address gaps in delivery, encourage collaboration and support new high-quality, innovative services".

Mr McGlinchey said agencies would welcome the chance to work together more closely in each region - potentially evolving into close collaboration by all agencies working with each family as intended for Maori families under Whanau Ora.

Ms Bennett has also earmarked $6 million a year to employ 10 new social workers in hospitals and to provide seven supported houses and other services for teen parents.