Part 5: Addressing key system constraints

Meeting the mental health needs of young New Zealanders.

5.1
In this Part, we assess the progress of government agencies in addressing system constraints impacting mental health services for young people in four key areas:

5.2
We expected government agencies to understand, and to be actively addressing, any constraints that impact their ability to meet the mental health needs of young people.

Summary of findings

5.3
Placing the needs of young people at the centre of system design and ensuring that they can access timely, appropriate, consistent, and continuous care as they enter, move through, and leave the care of services will require government agencies to address significant and long-standing system and capacity constraints.

5.4
In our view, greater oversight and leadership is needed over the design and performance of the wider system of mental health and addiction, including the significant share of mental health services and support for young people that are funded or provided by non-health agencies.

5.5
We urge government agencies to consider whether current funding models for specialist services are based on the best available evidence on need and the benefits of early intervention, and whether they are fit for purpose to provide equitable services to all New Zealanders.

5.6
In our view, government agencies should prioritise work on cross-sector workforce planning to ensure that New Zealand can access the right number and mix of skilled practitioners to meet our mental health needs into the future.

5.7
Community providers raised their concerns with us about restrictive and onerous commissioning practices. The Government intended to address these concerns through work to review and improve social service commissioning models.

Greater system oversight and leadership is needed

5.8
Publicly funded mental health services and support for young people are provided by a range of health and non-health agencies.

5.9
The distribution of mental health services for young people across multiple agencies and sectors makes health system oversight and leadership critical. This is needed so that young people and their whānau receive consistent and continuous mental health care no matter how or where they enter the system.

5.10
Young people told us that it often feels that the emphasis is on whether young people meet the criteria for a particular service, rather than whether their needs are being met. People who work in the mental health and addiction sector described the system as "disjointed", "siloed", "confusing", and difficult for young people and their whānau to understand.

5.11
The Department of the Prime Minister and Cabinet's Implementation Unit has highlighted a lack of health system leadership and oversight over mental health services funded and provided by non-health agencies, for whom mental health service delivery is not "core business". Strengthening mental health and addiction system leadership at all levels is a main aim of Kia Manawanui.

5.12
In 2020, the previous Government established an independent Mental Health and Wellbeing Commission (Te Hiringa Mahara Mental Health and Wellbeing Commission) to improve "cross-agency oversight, monitoring and accountability" over mental health and addiction services and the Government's approach to implementing the findings of He Ara Oranga.

5.13
Te Hiringa Mahara has increased its oversight and monitoring over the share of mental health and addiction services funded by health agencies. To date, its annual monitoring has not extended to mental health services funded by non-health agencies, although non-health funded services may be included in its future monitoring work.

5.14
The Ministry of Health is mandated by legislation to oversee and monitor most mental health services provided or funded by non-Health agencies.96 However, the Ministry of Health told us that being unable to access and request information from non-Health agencies is a barrier to fully exercising its mandated role.

5.15
In 2023, the Ministry of Health released Oranga Hinengaro System and Service Framework. A key action under Kia Manawanui, Oranga Hinengaro maps the range of mental health and addiction services that will be available locally, regionally, and nationally as a guide for health funders and planners.

5.16
However, Oranga Hinengaro is intended to map only the mental health and addiction services funded under Vote Health, not those funded or provided by other non-health agencies.

5.17
Although Kia Manawanui provides a clear cross-agency strategy for how government will achieve the vision of He Ara Oranga, it lacks an implementation plan clearly setting out the roles and responsibilities of agencies, the actions they will take, how they will work together, and how collective progress against the outcomes sought will be measured and monitored.

5.18
Strong system leadership and design will be required to create a cohesive, fully integrated, and fit-for-purpose mental health and addiction system that centres the needs of young people and their whānau and ensures that they can access all the system supports that they need to experience improved well-being.

Recommendation 8
We recommend that the Ministry of Health work with Te Whatu Ora, the Ministry of Education, Oranga Tamariki, the Department of Corrections, and other agencies as relevant to strengthen its mental health and addiction system leadership role, and to prioritise the development of a cross-agency implementation plan for Kia Manawanui with clear agency roles and responsibilities.

Existing funding models have not led to equitable service access

5.19
New Zealand's current funding model for specialist mental health services originated in the 1990s. During this time, the country was transitioning from large psychiatric institutions to community care as the preferred care model.

5.20
In 1994, the Government set a benchmark of 3% for the proportion of the population expected to experience a severe level of mental health need each year (and who would require a specialist level service).

5.21
The 3% benchmark appears to have been adapted from a 1991 Australian prevalence study and adopted as an access target for specialist mental health services in subsequent national mental health plans of the 1990s.

5.22
After the district health boards were established in 2001, the Government devolved central government funding for mental health to the newly established boards. At the same time, it set a specialist service funding "ringfence" to ensure that district health boards used mental health funding for its intended purpose.

5.23
The mental health specialist ringfence required district health boards to fund enough specialist mental health and addiction services to meet the needs of the 3% of their population who were expected to experience a severe level of mental health need. Only after the needs of the 3% were met could district health boards invest in primary-level mental health services.97

Previous mental health funding models have not resulted in equitable access to services

5.24
The 3% specialist ringfence was based on the best available prevalence data in the 1990s. Since the mental health ringfence was introduced, New Zealand's 2006 prevalence study, Te Rau Hinengaro, found that the proportion of New Zealanders who experience a severe level of mental health need was 4.7%, which is almost 2% higher than the ringfence benchmark. The ringfence was not adjusted in line with the latest data.

5.25
The historic concentration of government investment in specialist services for the 3% of the population with the most severe needs also failed to address the needs of the much larger proportion of the population estimated to experience mild to moderate mental health needs each year.

5.26
The prevalence of mental health conditions is not evenly distributed across the population. Some groups, such as young people and Māori, are particularly affected. The benefits of early intervention in younger age groups in reducing the lifelong costs of mental illness are also well recognised. A single national access measure might not, by itself, be enough to meet the needs of groups who experience a greater level of need.

Existing funding models are being revisited following the health reforms

5.27
After the recent health reforms, there remains a mental health funding ringfence. Although the ringfence initially applied only to specialist mental health services, to meet the needs of the 3% of the population who were expected to experience a severe level of mental health need, the ringfence has now been broadened to include primary mental health services, such as the new Access and Choice services.98

5.28
We note that some Te Whatu Ora services which support young peoples' mental health needs, such as school-based health services, remain outside of the ringfence.

5.29
There is still support in the sector for continuing protected funding for mental health and addiction to prevent mental health funding being used for more general health services.

5.30
Te Whatu Ora told us that it has started work to assess the equity of current investment in mental health and addiction services.

5.31
Given the uneven distribution of need and proven benefits of early intervention, it would, in our view, be appropriate that any future national access measures for mental health services incorporate a range of sub-measures reflecting the needs of groups at higher risk of experiencing mental health concerns, such as young people and Māori.

5.32
We note that any more comprehensive mapping of service access to population need will be dependent on improved prevalence data on the extent and distribution of mental health conditions in the population.

National planning is required to address mental health and addiction workforce issues

5.33
New Zealand's mental health workforce is diverse and made up of clinical and non-clinical roles across multiple government agencies, not-for-profit community providers (such as NGOs, iwi, and Māori providers), and the for-profit sector.

5.34
Clinical roles include nurses, addiction practitioners, clinical psychologists, psychiatrists, social workers, counsellors, and occupational therapists. Non-clinical roles include support workers, youth workers, employment support advisors, peer workers, and cultural advisors.

5.35
Government agencies employing or funding the mental health workforce include Te Whatu Ora, Te Aka Whai Ora, the Ministry of Education, the Department of Corrections (Corrections), Oranga Tamariki, the New Zealand Defence Force, and the Accident Compensation Corporation (ACC). The for-profit sector employs a significant proportion of the mental health workforce, including those that provide publicly funded or subsidised services (such as GPs, and services funded through ACC or Oranga Tamariki).

The mental health and addiction workforce faces long-term capacity and capability issues

5.36
New Zealand's mental health and addiction workforce faces significant and long-term shortages. A range of government organisations have highlighted that these shortages are a significant risk to being able to maintain current service levels and to deliver Kia Manawanui.99

5.37
New Zealand relies on overseas-trained workers to maintain its mental health and addiction workforce. Some mental health specialties in particular rely on an international workforce. Psychiatry, for example, has the highest proportion of overseas graduates of any medical specialty in New Zealand.

5.38
New Zealand is not alone in these challenges and must compete in the global recruitment market for mental health practitioners such as nurses, doctors, and clinical psychologists.

5.39
Health officials told us there are several disadvantages with New Zealand's dependence on overseas recruitment to fill workforce gaps that cannot be filled by locally trained mental health practitioners. We heard from health officials that hiring overseas professionals can be more costly for services in the long term because they might need lengthy induction.

5.40
Overseas-trained mental health practitioners are less likely to understand or to be competent in addressing the needs of New Zealanders from diverse cultural backgrounds, particularly Māori and Pacific peoples. Overseas practitioners also have higher turnover rates than locally trained staff.

5.41
Because of these factors, people we spoke with in the sector were in broad agreement that the current dependence on an overseas-trained mental health and addiction workforce to fill gaps in the locally trained workforce is not a sustainable solution to New Zealand's mental health and addiction workforce challenges.

5.42
There is also broad recognition in the sector that New Zealand cannot solve its workforce issues simply by expanding existing mental health and addiction roles, which can have long training pipelines. New skillsets and career pathways are needed, such as peer support and Māori and Pacific cultural workforces and practitioners.

The Government invested in growing the local workforce in the 2019 Wellbeing Budget

5.43
The Government acknowledged that more investment was needed to grow the mental health and addiction workforce and develop training and career pathways for new types of mental health practitioners. It allocated $77 million of new funding over four years under Budget 2019 towards workforce development as part of its Access and Choice programme.100

5.44
To date, this $77 million has funded a range of initiatives aimed at:

  • building the capacity and capability of existing workforces;
  • expanding local training places for key mental health professions such as clinical psychologists and nurses; and
  • rolling out training to improve the responsiveness of mental health practitioners to Māori, Pacific, and Rainbow communities.

5.45
Comparable overseas initiatives to Access and Choice have sought to expand population access to primary mental health services. These overseas initiatives have been accompanied by significant investment in designing and developing training and career pathways for new types of mental health practitioners.

5.46
For example, the United Kingdom's Increased Access to Psychological Therapies programme, established in 2008, delivers primary mental health services to 1.2 million people annually. An important part of this initiative's roll-out was the development of a year-long course to qualify as a "Psychological Wellbeing Practitioner" able to provide brief talking therapies.

5.47
Although the Government's 2019 Access and Choice investment also involved creating new roles (Health Improvement Practitioner and Health Coach) to staff the GP-based Integrated Primary Mental Health and Addiction services, training data suggests that most staff employed in these new roles are existing clinicians such as nurses or social workers who were already employed in mental health services or the wider health sector.

5.48
Te Whatu Ora told us that it is exploring options for an equivalent role to the Psychological Wellbeing Practitioner in New Zealand.

The mental health and addiction workforce is facing significant well-being and retention issues

5.49
Throughout our audit we saw the depth of dedication and care shown by practitioners working in mental health services. The staff we spoke to were driven by their concern for young people and their desire to ensure that young peoples' needs were met.

5.50
However, long-standing capacity constraints, the effects of the Covid-19 pandemic, and persistent workforce shortages have placed the mental health and addiction workforce under considerable strain. These pressures on the existing workforce were evident to us in our discussions with frontline staff.

5.51
Staff shortages appear to be most acute in the small and highly specialised ICAMHS workforce. ICAMHS clinicians told us about the level of distress that increasing caseloads are having on job satisfaction and the ability to offer quality care to all young people who need it. They told us how their own mental health and well-being, and that of their colleagues, have been affected by heavy caseloads.

5.52
These strains on the ICAMHS workforce are reflected in turnover rates, which reached 19% nationally in 2021 (almost twice the average turnover for health care, of 10%).101

5.53
There is little to be gained in investing in the training and development of new mental health and addiction workforces if services cannot retain staff. It is critical that workforce retention issues are addressed to ensure that the expertise of current mental health and addiction practitioners is not lost.

National mental health and addiction workforce planning is required

5.54
Health agencies acknowledge that national workforce planning will be fundamental to achieving the Government's strategic goals for mental health and addiction.102 However, no such national workforce plan for mental health and addiction has been developed.

5.55
An immediate barrier to national workforce planning is likely to be the lack of data on the capacity and capability of the current workforce. Although several stocktakes exist for the Te Whatu Ora-funded workforce, there is currently no stocktake of the workforce employed by other government agencies or the private sector.103

5.56
In our view, addressing long-standing workforce capacity issues in the sector requires concerted and co-ordinated workforce planning and development across the multiple agencies that currently employ the mental health and addiction workforce.

5.57
The Ministry of Health is leading a cross-agency working group on the mental health and addiction workforce. Te Whatu Ora, Te Aka Whai Ora, the Tertiary Education Commission, ACC, the Ministry of Justice, Corrections, the Ministry of Education, the New Zealand Defence Force, and Oranga Tamariki are part of this group. This is a promising sign that agencies recognise the mental health and addiction workforce as a cross-agency and cross-sector issue.

5.58
We urge health agencies to prioritise the development of a national mental health and addiction workforce plan that will put a clear pathway in place for how the Government will deliver on its strategic objectives in the face of these persistent and continuing workforce challenges.

Recommendation 9
We recommend that Te Whatu Ora and the Ministry of Health work with the Ministry of Education, Oranga Tamariki, the Department of Corrections, and other agencies as relevant to prioritise the development of a national mental health and addiction workforce plan.

The commissioning of services from non-government organisations needs to improve

5.59
Community providers, such as NGOs, iwi, and Māori providers play a key role in delivering mental health services and support. Community providers work with people across the full spectrum of mental health need and employ a broad workforce, including clinical psychologists, psychiatrists, social workers, cultural advisors, and support workers. About 35% of people accessing specialist mental health and addiction services did so through an NGO service in 2021/22.

5.60
We heard that community providers are part of, and know, their own communities and so are often best placed to understand and respond to the needs of young people and their families and whānau. These providers told us that they can "do things differently" and can reach communities who might not trust government agencies. We frequently heard that community providers go over and above their contracts to meet people's needs.

5.61
We also heard from many in the community sector that their efforts to tailor their support to meet the needs of young people are often hampered by restrictive public sector contracts and procurement processes. This feedback from community providers repeats what we heard during our 2023 audit looking at how government agencies meet the needs of people affected by family violence and sexual violence.104

5.62
Common concerns we heard from providers include:

  • having to juggle multiple small short-term contracts with little effort on the part of health and social sector agencies to align or consolidate funding streams;
  • onerous accountability requirements that do not reflect what is important to young people and whānau; and
  • difficulties attracting and retaining experienced staff because of inadequate resourcing, lack of funding certainty, and competition from other agencies or sectors.

5.63
Although providers told us they wanted to work in partnership with the government, commissioning agencies often favoured "top-down" approaches that seek to minimise risk by closely controlling spending. Several providers cited high-trust approaches used during the Covid-19 pandemic as a potential model for future commissioning.

5.64
For those not in the system, such as young people and whānau wanting to access services or potential referrers, the landscape of community services can be complex, fragmented, and difficult to navigate.

5.65
The issues raised by the community sector are not new nor are they confined to the mental health and addiction sector. They echo the findings of successive government reports over the past two decades and are currently the subject of a Ministry of Social Development-led project to change how agencies commission health and social services.

5.66
Government work to improve social service commissioning is ongoing. It is too early for us to comment on the likely effects of this project on community providers working in the mental health and addiction sector. We will look to see how this work is progressing when we review how agencies have responded to this report.

5.67
In the meantime, health agencies told us they are aware of the community sector's concerns and are already moving towards new commissioning approaches. These new approaches are intended to strike a better balance between community organisations' desire for greater flexibility, trust, and certainty, and health agencies' responsibilities as custodians of public funds to ensure accountability and value for money.

96: The Ministry of Health's system oversight and monitoring role is provided for under the Health Act 1956, the Health and Disability Services (Safety) Act 2001, and the Pae Ora (Healthy Futures) Act 2022. However, there are some exceptions. For example, the 2001 Act does not apply to services provided in prisons or Oranga Tamariki residences.

97: Although some primary service funding was made available outside the ringfence, the share of funding available for primary services remained small, making up only 2% of mental health expenditure.

98: The Access and Choice benchmark is that at least 325,000 people will access the new primary mental health and addiction services from mid-2025. This would correspond to around 6% of the population accessing ringfence-funded services based on current population figures. With the existing 3% ringfence for specialist services, this equates to about 9% of the population accessing ringfence-funded services from mid-2025.

99: This includes reports by the Department of the Prime Minister and Cabinet, Te Hiringa Mahara Mental Health and Wellbeing Commission, and the Health Workforce Advisory Board.

100: Te Hiringa Mahara Mental Health and Wellbeing Commission (2021), Access and Choice Programme: Report on the first two years, page 12.

101: Whāraurau (2021), 2020 Stocktake of Infant, Child and Adolescent Mental Health and Alcohol and Other Drug Services in New Zealand, page 17.

102: The Ministry of Health (2023), Oranga Hinengaro System and Service Framework, page 64.

103: Te Whatu Ora contracts Te Pou and Whāraurau to provide regular stocktakes of Te Whatu Ora and the Te Whatu Ora-funded NGO mental health and addiction workforces.

104: See Controller and Auditor-General (2023), Meeting the needs of people affected by family violence and sexual violence, at oag.parliament.nz.