Te Oranganui mātaiwhetū/chief executive Wheturangi Walsh-Tapiata said the collective ran a pilot programme in which a health professional worked directly with police to provide an immediate response when a person presented to police with mental health and addiction issues.
"We did not have a pathway if they presented to the police," Walsh-Tapiata said.
"We know this is a significant issue nationally.
"What the pilot showed us is that if we had someone who could instantly respond, then we didn't necessarily pursue pathways that might not have been appropriate, for example a court process or admitting into a mental health unit at the DHB – because we would be keeping them in the community and providing them with a wrap-around service."
Walsh-Tapiata said the pilot initiative resulted in the four groups coming together again to apply to the Proceeds of Crime Fund.
Te Oranganui Trust operates the biggest iwi and community mental health and addiction service in Whanganui.
"In our rohe in Whanganui we've been innovative at trying to find our own solutions to issues," Walsh-Tapiata said.
"We don't just work with the individual. They might be the point of referral, but we believe it takes a whole system to really be addressing some of those issues, and I think that's also become a perspective of the other organisations who are going to be involved in this kaupapa.
"Whānau ideally don't want to be dealing with the DHB or the Police. They're at a point of desperation if in fact they're making that contact, so we want to be able to find ways in which we're all collectively supporting each other.
"No competition, just all focused on working together to help those in need.
"The response that we're wanting to move towards is that first there needs to be attention to that particular person, but if we're going to be trying to find positive solutions then we also need to be working with the whānau to see what is the wrap-around service that we need to put around this person and their whānau to be able to help them."
The seven-person team will include a project manager, a mental health crisis clinician, an alcohol and drug clinician, a family violence key worker, a peer support worker, a cultural support person and an information systems manager.
The project has the full support of leaders across the four organisations, who have committed to partner throughout the three years to ensure the initiative's success.
Chief allied professions officer Alex Kemp said she was pleased the Whanganui initiative had been recognised as worthy of the $3.5m investment.
"We know that mental health crisis is a time when our tangata whaiora and their family are at their most vulnerable, and most need response care wrapped around them.
"A similar co-response model has been trialled successfully in other parts of the motu, and we have learnt from and expanded on the other trials to ensure we have the right model for our community."
Balance Aotearoa general manager Frank Bristol said: "Collaboration to develop a crisis co-response is a practical step in using what we have and developing it further for the wider community."
Whanganui Police area commander Inspector Ross Grantham said applying for the funding was a highly competitive process.
"To be successful is a wonderful reflection on the team who produced the application."
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