Social services welcome National's Budget boost

Social service agencies can hardly believe their luck after a National Government yesterday gave them more money for the coming year than the former Labour Government had planned, despite intense pressure to cut spending in the recession.

Social Development Minister Paula Bennett said next week's Budget would give them a $40 million increase, on top of a $3 million inflation adjustment - $20 million more than Labour had earmarked under its "Pathways to Partnership" programme.

She said the $20 million would be clawed back in 2011-12 to keep total five-year spending on the programme exactly the same as Labour had planned, just under $1.47 billion.

But this was far better than the agencies had expected at a time when other state spending is being cut and after Finance Minister Bill English refused to confirm Labour's funding plan back in February.

"It's more than we could have expected," said Council of Social Services chief executive Ros Rice, who has been to four sector meetings with Ms Bennett in the past two months.

"It's a fantastic package. When we were talking to her we were not talking about that level of funding."

Mangere Budgeting Service manager Darryl Evans, who had told two workers their jobs would end next month unless the new Government renewed their funding, said he could now renew their contracts.

Ms Bennett said the extra $40 million a year for the coming year and 2010-11 would go into a new "community response fund" to help agencies hit by the recession.

"There are two elements to the fund.

"First, it will provide crisis funding to providers of critical services that are having real trouble maintaining their services because of the impact of the economic downturn on their non-Government funding.

"Second, it will provide funding to providers of critical services that are experiencing big increases in demand for their services from families, children, young or older people because of the economic downturn. For example, this might include budget advice services dealing with more families seeking help to manage their finances."

She said the fund would be open to all agencies serving "families young and old", including the elderly - a wider brief than the rest of the Pathways to Partnership funding, which focuses on families and children.

The money would be allocated by 12 regional panels, with funding for each region based on population and deprivation levels.

She would appoint panellists on the recommendation of the Ministry of Social Development, drawing people from community groups and local government as well as state ministries.

Panellists could include people from groups being funded through the scheme but they could not take part in funding decisions where they had a personal interest.

Funding would be distributed in blocks of $50,000 with a maximum of $100,000 per organisation in each four-monthly funding period.

Although National intended to stick to Labour's broad funding plan, Ms Bennett said she would have to go back to the Cabinet to say how the money was being used before spending each four-monthly tranche.

The Cabinet would also have to approve any funding increases for six agencies with national contracts, including Barnardos, Plunket and Relationship Services. They will not have to go through the regional panels.

She warned agencies that money granted from the new fund would be only "short-term crisis funding - it's not a permanent top-up".

She plans to review the longer-term use of the Pathways to Partnership (P2P) money.

"The Government will be maintaining the P2P funding for community and voluntary sector organisations - but we will be reshaping the model." She had not yet decided on the new model and would continue talking with the sector about this.

FUNDING SHUFFLE

Pathways to Partnership funding

2007-08
Labour: $201m
National: $201m

2008-09
Labour: $259m
National: $259m

2009-10
Labour: $282m
National: $302m

2010-11
Labour: $331m
National: $331m

2011-12
Labour: $396m
National: $376m

5-year total
Labour: $1469m
National: $1469m