Part 8: Integrated contracts and government support

Whānau Ora: The first four years.

In this Part, we discuss integrated contracting. We also discuss how government agencies supported the implementation of the Initiatives and each year's planned and actual spending. At the end of the Part, we make some observations.

Integrated contracts

As part of its contribution to the Initiatives, the Ministry of Social Development took responsibility for integrating contracts for providers within collectives. The Ministry of Social Development already had a team of staff (the Integrated Contracting Team) doing this work.

In their Programmes of Action, providers were asked to say whether they wanted an integrated contract.36 We understand that most, but not all, of the 163 providers that are members of collectives wanted an integrated contract. From 2010/11 to 2012/13, the Integrated Contracting Team worked only with providers involved in the Initiatives. This restriction was lifted in 2013/14.

The Ministry of Social Development told us that its work on integrated contracts is seeking to align service delivery and funders' expectations of each provider for a range of services. They told us that it takes time to build effective relationships with other government agencies and providers, and to reach the common understanding necessary to achieve an integrated contract.

Practically, an integrated contract brings together multiple contracts that a single provider (not a provider collective) has with one or more government agencies into a single contract. This is meant to achieve administrative efficiencies by reducing the costs of negotiating, writing, managing, and reporting on contracts, and auditing compliance with contracts.

Because the government agencies excluded some contracts from integration, it is unlikely that an integrated contract will include all of a provider's contracts with each government agency. However, the provider would have fewer contracts than before.

During the first four years of the Initiatives, the Ministry of Social Development used three versions of integrated contracts. The last version of contract used (called an Integrated Outcomes Agreement37) is complemented by a separate agreement between the government agencies that is meant to ensure that each agency does not undermine the agreement with the provider. However, the Ministry of Social Development told us that sometimes one government agency varies the agreement with the provider without consulting or informing the other government agencies.

In total, 28 integrated contracts were achieved. Of these, 27 integrated contracts were signed from 2010/11 to 2012/13, and one was signed in 2013/14.38 The Ministry of Social Development said that it would be difficult to tell us the total number of contracts the 28 providers started with.

One provider told us that his organisation had 26 of its health sector contracts integrated into one by the Ministry of Social Development. This made contract reporting more efficient. We do not know if this was a typical number of contracts.

Administrative efficiencies were not always achieved. For example, a researcher reported to Te Puni Kōkiri that a provider in a collective thought that integrated contracting with the Ministry of Health and the Ministry of Social Development would reduce reporting requirements. Instead, reporting requirements stayed the same and, in some instances, contract and service audits increased. This diverted the provider's time from making changes that would better serve the needs of whānau.

The joint agencies have not yet reported on whether the contracts have produced administrative efficiencies or achieved the outcomes in the Whānau Ora Outcomes Framework in Figure 2.

The Ministry of Health told us that the number of integrated contracts achieved was affected by providers' unwillingness to work on contract integration when working through the procedures put in place to achieve a Programme of Action Implementation Agreement.

The Ministry of Social Development's Integrated Contracting Team told us that it took over managing some of the integrated contracts after they were signed, instead of transferring the contract back to a lead contract manager in the Ministry of Health, a district health board, or another part of the Ministry of Social Development. This meant that the Integrated Contracting Team had less time to work with new providers on integrated contracts.

How government agencies supported the Initiatives

To support the Initiatives, the Ministry of Health and the Ministry of Social Development mostly gave administrative support to Te Puni Kōkiri. This involved:

  • helping Te Puni Kōkiri design the system to manage provider capability building;39
  • reviewing the documents that provider collectives had to prepare;
  • assessing Expressions of Interest from research collectives;
  • providing officials for regional groups; and
  • supporting integrated contracting.

The Ministry of Health told us that it also:

  • sent district health boards updates on the Initiatives through newsletters issued every one or two months;
  • set expectations for district health boards' annual plans on how they should support the Initiatives; and
  • hosted a fortnightly group of senior officials (deputy secretaries) from the Ministry of Health, the Ministry of Social Development, Te Puni Kōkiri, and (later) the Ministry of Education.

To help promote the Initiatives, the Ministry of Health published a report called Whānau Ora: Transforming our futures in 2011. The report includes some examples of how the Initiatives were making a difference to some people's lives in the first year.40

Officials from the national offices of the Ministry of Health and Ministry of Social Development were involved with the WIIE fund through their membership of the Governance Group. Officials in the regions, such as the Ministry of Social Development's regional staff and district health boards' staff, were involved with the fund as part of their regional groups.

Information system for provider collectives

In October 2013, the Government transferred $10 million from Vote Māori Affairs to Vote Health to enable the Ministry of Health to lead work on designing, trialling, and introducing a Whānau Ora information system for provider collectives. The Ministry of Health originally planned to spend the funds between 1 July 2014 and December 2019, but this has been extended to June 2020.

The aim of the information system is to help providers to assess whānau needs and prepare whānau plans. It will record information collected on progress made by whānau in achieving their goals and enable reporting on outcomes. The system will also be used to produce management reports for provider collectives and relevant funders.

The Ministry of Health's original plan was for two provider collectives to try out the system between July and December 2014. The trial has been expanded to four trial sites involving seven provider collectives and is now expected to end in May 2015. After any improvements are made, the Ministry of Health will phase in the system to those provider collectives that want it by 30 June 2017. This is one year after the last Programmes of Action will be completed and about three years after the first Programmes of Action were completed. The Ministry of Health told us that it has taken longer than expected to create the information system, but the costs to providers and whānau to use the system will be less than if providers had been left to try and buy a similar system on their own.

Some providers have not waited for this system. They have bought a commercially available system that they considered would meet their immediate needs. The Ministry of Health is aware that it could need to migrate providers' data into its new system.

Each year's planned and actual spending

Administration funds paid for expenses such as the community members' work on the Governance Group and regional groups, holding training for regional groups and national meetings, and roadshows explaining the Initiatives' implementation. It also paid for Te Puni Kōkiri staff to work on both phases of the Initiatives.

The Whānau Ora Administration fund was also used to pay for research and evaluation work completed at various times throughout the first four years. One major cost was the sum paid to research collectives, which were paid almost $7.9 million between 1 July 2010 and 30 June 2014.

Figure 15 shows planned and actual spending for Whānau Ora Administration by financial year. Data for 2013/14 includes amounts for selecting and contracting with the commissioning agencies. Each year, actual spending was more than the amount planned before the start of the year (the original budget) and less than the amount expected to be needed before the year ended (the updated budget).

Figure 15
Administration funds: Planned and actual spending by financial year, 2010/11 to 2013/14

Figure 15 - Administration funds: Planned and actual spending by financial year, 2010/11 to 2013/14 .

Source: Te Puni Kōkiri's annual reports,

Te Puni Kōkiri told us that one reason for the increase between the original budget and updated budget was a change in the way that Te Puni Kōkiri assigned overheads to the Initiatives.

Te Puni Kōkiri also explained some of the variations in two of its annual reports:

  • In 2011/12 and 2013/14, Te Puni Kōkiri deployed more staff to the Initiatives.
  • In 2013/14, the Government increased the administration funding by $2.5 million to fund the costs of choosing commissioning agencies and getting them set up.

Te Puni Kōkiri explained that the pace at which the research collectives worked largely depended on the pace at which the provider collectives progressed towards Programme of Action Implementation Agreements. The time taken to select research collectives and orient them to the practices they were to follow also took time. Consequently:

  • $519,000 was transferred from 2010/11 to 2011/12; and
  • $500,000 was transferred from 2011/12 to 2012/13.

Our observations

Integrated contracting

Twenty-eight providers achieved an integrated contract between 2010/11 and 2013/14, but the Ministry of Social Development could not easily tell us the total number of contracts that the 28 providers started with. A faster way needs to be found to integrate contracts. Government agencies also need to abide by the terms of the agreements that they have signed with each other.

Because the Ministry of Health, district health boards, and the Ministry of Social Development do not use the same approach to contracting, contract integration is more complex than it needs to be. If they used the same approach, providers would find the contracting methods more consistent and contract integration would be easier.

Whānau Ora information system

We have not looked into the Whānau Ora information system in any detail. Such a system will need to be flexible enough to adapt to each new phase of the Initiatives and to cope with providers from other sectors, such as justice and education, who might become involved in a Whānau Ora initiative or part of a provider collective.

The Ministry of Health told us that the Whānau Ora information system would make reports available to funders. It is not clear what right any funders would have to information held in the Whānau Ora information system.

We were told that other government initiatives might introduce similar information systems. There is a risk that government agencies are not properly co-ordinating their projects and that two or more ICT systems might be introduced when one would do.

36: We were told that this was because the type of integrated contract on offer at that time was not a fully integrated contract.

37: When the Integrated Outcomes Agreements expire, the providers will be moved to a new contract that uses a template supplied by the Ministry of Business, Innovation and Employment.

38: At the beginning of the Initiatives, the Ministry of Social Development said that it could integrate up to 20 providers' contracts in a year, depending on their complexity and the time that providers and agencies put into the work.

39: The Ministry of Health told us that its work included co-ordinating health sector support for the Initiatives, including completing due diligence checks on providers that put in Expressions of Interest and acting as the contact point between Te Puni Kōkiri and the Ministry of Social Development and the district health boards.

40: The report is available at

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