RADICAL CHANGES TO THE BUDGET COMING

FrontPage: Finance Minister Bil English --- using big data to redefine budgeting
 

A dry and somewhat academic paper released by Treasury yesterday analysing data related to “at risk” youth is actually a key component of what is about to be a radical change in the way the Government prepares its budget.

Ministers and Departments are currently preparing for the so-called “bilateral” budget round in which they put their case for funding to be allocated in next year’s Budget – presumably to be brought down in May.

Traditionally this has been a case of the departments either seeking adjustments in current funding or putting up a case for funding for a new programme.

But central to the process has been the assumption that the proposals all have a validity.

Yesterday’s Treasury paper is part of an exercise which is seeing the focus in the Budget round go on outcomes.

Finance Minister Bill English told POLITIK the data allows the Government to precisely target at risk groups.

Since 2013 Statistics New Zealand has collected data from government agencies including the Ministries of Social Development, Health and Education, as well as Child Youth and Family (CYF), Corrections, Police and Housing to create what Finance Minister Bill English says is a world-leading Integrated Data Infrastructure (IDI).

Analysis of the IDI, released yesterday, reveals the key early warning signs of the 15-24 year olds around New Zealand who are most likely fail at school, access mental health services, stay on a long term benefit or go to prison.

Mr English says some of the risk factors most likely to cause these problems include whether they have been brought to the attention of CYF as a child, whether they were stood down from school, whether their parent/caregiver was on a benefit or whether their parent/caregiver has served a corrective sentence.

“We now know for example that the most at-risk 15 per cent of 15 year olds are 13 times as likely to have a CYF notification and 10 times more likely to have been stood down from school than other 15 year olds.”

The data identifies just over 4,000 teenage girls on a benefit as one high risk group.

By the time they reach 35, half will have been on a benefit for more than five of the last ten years, and 19 per cent will have received a corrections sentence. Only one third will have achieved NCEA level 2 by age 23.

“On average, each person in this group will cost the Government over $100,000 in corrections and benefit costs between ages 25 and 34 – and much more than that over their lifetimes.

“The Government’s programme of social investment is about intervening early to help these people lead better lives – and save the taxpayer money in the long run,” Mr English says.

“As an example, our major investment in Youth Services has contributed to the number of young mothers requiring a benefit almost halving since 2009 and, over the year to June 2014 we reduced the average time they spend in the welfare system from 19 years to 17.5 years.”

 

Ongoing use of this data will include further analysis to design the best services to respond to these young people.

The Minister told POLITIK that during the Budget round he will be saying to officials that the Government will pay for something that has particular characteristics designed to address the problems identified by the data analysis.

“We’ll pay whatever it takes,” he said.

“They are realising that they have to deliver propositions that can tell us which people, where and who has got a relationship with them and then showing us a feedback loop where they can demonstrate progress.

“The whole level is changing and this Budget round we are putting it to the test because the stuff they put up this Budget round has got to go through that process and there are not a lot of proposals.”

Mr English believes that the use of the social investment approach in social welfare has already saved the Government nearly $1 billion --- enough to fund the surplus.

 

 

 

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