Part 4: Meeting the needs of our most disadvantaged

4.1
In this Part, we discuss the effectiveness of governance and management arrangements to meet the needs of some of our most disadvantaged, including those living with chronic or multiple socio-economic disadvantages.

4.2
The same elements of good oversight discussed in Part 3 are needed to meet the needs of these groups. In addition, we expected to see the agencies focusing on:

• co-ordinating their activities with each other and with community organisations and groups to implement effective responses to child poverty, including reducing inequity; and
• consistently engaging with the children and families most affected by child poverty and with relevant community organisations to inform governance decisions and implementation of child poverty initiatives.

Summary

4.3
The Government has signalled that it intends to focus on addressing additional household costs and the causes of long-term disadvantage to reduce material hardship. This will be challenging and will require multiple public organisations to effectively co-ordinate their work with each other, with NGOs, and with communities.

4.4
We frequently heard from public organisations and NGOs that frontline services relevant to reducing child poverty are not integrated. In our view, the next phase of work will need a strengthened governance focus on ensuring that public organisations actively co-ordinate the planning and integration of government and community services needed to address the causes of long-term disadvantage and hardship, especially for those living with chronic or multiple socio-economic disadvantages.

4.5
One of the principles in the updated Strategy is that investment will seek to address disparities in outcomes. Statistics New Zealand data shows that Māori, Pasifika, and children affected by disabilities are significantly over-represented among those living in the most disadvantaged circumstances.

4.6
Although the agencies are tracking inequities, we saw limited evidence of specific actions to address inequities for disproportionately disadvantaged groups.

4.7
Although there has been engagement during the development, review, and updating of the Strategy, we heard that the agencies do not consistently engage with Māori, other disadvantaged groups, or NGOs on the shape or progress of the work programme.

4.8
A consequence of a lack of consistent engagement is that enduring, reciprocal relationships are not formed. This, in our view, is a barrier to integrating frontline services, responsively addressing inequities, and enabling community-led approaches.

There are significant implementation challenges to come

4.9
The Strategy's focus on addressing additional household costs and the causes of long-term disadvantage (such as health, housing, education, and employment) to reduce material hardship aligns with the Children's Act's requirement for the strategy to both reduce child poverty and mitigate the impacts of socio-economic disadvantage.

4.10
To make progress, it is essential that public organisations effectively co-ordinate their work with each other and with community organisations. Integrated frontline services are especially important to meet the needs of children and families living with chronic or multiple disadvantages.

4.11
However, many of those we interviewed highlighted challenges in the way public organisations are working to address child poverty. These include:

• public organisations struggling to work with each other and with community organisations in an integrated way, especially in providing services for the most disadvantaged. For example, we heard that there is insufficient wrap-around support for children and families experiencing multiple disadvantages;²⁷
• a lack of voices from Māori, Pasifika, children and families affected by disabilities, those living in poverty, and NGOs in the governance and implementation of child poverty work; and
• the need for public organisations to better enable community-led approaches, which can provide more effective assistance to those experiencing persistent disadvantage.²⁸

4.12
The Government is aware of these implementation challenges. The Department of the Prime Minister and Cabinet identified them in its 2022 review of the Strategy, and they were highlighted again during MSD's 2024 consultation to update the Strategy.

4.13
Addressing these challenges will be complex. More than 20 public organisations are involved in implementing initiatives that have been identified as helping to directly reduce child poverty or its wider causes.

Meeting the needs of the most disadvantaged will need a more co-ordinated response

4.14
Our audit did not focus on frontline services. However, in discussions with public organisations and NGOs, we consistently heard that it is difficult for many public organisations to work in a joined-up way with each other and with community organisations at the frontline.

4.15
For example, a family experiencing poor mental health, housing instability, and family violence might have to navigate the services they need from Health New Zealand, Kāinga Ora, and MSD on their own, rather than receiving joined-up support from them.

4.16
Public organisations told us about implementation challenges from their own experiences. For example:

• The Ministry of Housing and Urban Development highlighted a lack of access to integrated services to support the complex needs of emergency housing clients.
• The Energy Efficiency and Conservation Authority reported a lack of joined-up support to meet the needs of clients in the Warmer Kiwi Homes initiative. We heard that clients often had to navigate multiple government services to find support, having to complete multiple forms or re-tell their story multiple times.
• Oranga Tamariki described how, as part of the Oranga Tamariki Action Plan,²⁹ they had been involved in several in-depth assessments that identified system gaps and barriers in areas such as health, education, and housing.

4.17
NGOs we spoke to reported similar experiences. For example, we heard that government contracts are often tied to providing a narrow service that does not enable service providers to meet the needs of children and families experiencing multiple disadvantages.

4.18
These findings are consistent with a report by the Productivity Commission, which found that the system often fails to respond to people experiencing multiple challenges at the same time.³⁰

4.19
This is not unique to addressing child poverty. We have previously highlighted the challenge of integrating services for complex cross-cutting issues at a community level, including services related to family and sexual violence and youth mental health.³¹

4.20
While existing governance and management arrangements have worked well to oversee individual income-based initiatives, those have needed only one or two public organisations to implement. Addressing the causes of long-term disadvantage to reduce material hardship will need multiple public organisations to work at the frontline in much more co-ordinated and integrated ways, with each other and with the community.

4.21
We have not seen evidence that the various governance groups have sufficiently considered how to support public organisations to achieve this. Looking ahead, we consider it needs to be a specific focus. Without improved co-ordination and integration of services relevant to the work programme to reduce material hardship, there is a risk the needs of the most disadvantaged, including people with chronic or multiple socio-economic disadvantages, will not be met.

Recommendation 2
We recommend that the Ministry of Social Development ensure that cross-agency governance is sufficiently focused on effective co-ordination of child poverty initiatives, both between public organisations and with community groups, and on integration with frontline services to meet the needs of the most disadvantaged.

More attention is needed on reducing inequities

4.22
Most of the stakeholders that the Department of the Prime Minister and Cabinet engaged with for its 2022 review of the Strategy considered that equity should be a key factor in how the agencies prioritise their work.³² Statistics New Zealand data shows that Māori, Pasifika, and those affected by disabilities are significantly over-represented among those living in poverty.

4.23
The Children's Act requires the strategy to indicate how disparities will be measured for children in poverty and living with socio-economic disadvantages. The annual report on progress in achieving the strategy's outcomes must include an analysis of outcomes for Māori children.

4.24
Considerable effort has gone into tracking and understanding inequities in child poverty. For example, Statistics New Zealand ensures that the sample size for the Household Income and Living Survey enables robust estimates of child poverty rates by ethnicity, disability status, and region. This is important because it means that inequities between different groups can be monitored. The Child Poverty Reduction Act supports this focus on inequities – it says that Statistics New Zealand must report data by identified populations (specifically Māori), if the data is adequate. The Treasury has also modelled the effects of child poverty policies on Māori and Pasifika children.

4.25
Given the size of the inequities between different groups across multiple measures (see Appendix 1), sustained and targeted effort is needed to make progress. This is supported by one of the principles in the updated Strategy – that investment will seek to address disparities in outcomes.

4.26
We found that Ministers expect the agencies to provide them with advice on the impact of different initiatives on inequities in the rates of child poverty. We saw briefings by the Department of the Prime Minister and Cabinet and MSD that included information about inequities in the rates of child poverty and the anticipated effects of different initiatives on Māori, Pasifika, and those affected by disabilities.

4.27
The Department of the Prime Minister and Cabinet has also provided advice to Ministers that a child poverty plan could describe what is needed to reduce poverty for disadvantaged population groups, particularly Māori, Pasifika, and those affected by disabilities.

4.28
We also acknowledge that some of the initiatives already implemented have reached more Māori, Pasifika, and those affected by disabilities because they are over-represented in poverty statistics.

4.29
However, we have seen limited evidence of the agencies carrying out specific planning or activities to address inequities in the rates of child poverty for disproportionally disadvantaged groups. NGOs we spoke to suggested that more needs to be done.

4.30
During MSD's consultation to update the Strategy in 2024, stakeholders again emphasised the need to invest in reducing disparities and to target support at the children and young people who have the greatest need.³³

The agencies need to strengthen their engagement with stakeholder groups

Engagement with disadvantaged population groups and NGOs needs to be more consistent

4.31
In our view, to reduce material hardship and address inequities, the agencies will need to work systematically with Māori, Pasifika, and those affected by disabilities to develop effective approaches.

4.32
We expected that the agencies responsible for overseeing the work programme would actively engage with those most affected by poverty and with NGOs working directly to reduce child poverty.

4.33
We found many examples of the agencies engaging with different groups on child poverty matters. The Department of the Prime Minister and Cabinet engaged with Māori, Pasifika, those affected by disabilities, NGOs and other experts, and children and young people during both the development phase of the Strategy and its review in 2022. MSD engaged with the same groups during its update of the Strategy in 2024.

4.34
Some engagement has been sustained. The Child Wellbeing and Poverty Reduction Group met fortnightly for 18 months with the Pou Tangata Skills and Employment Iwi Leaders Group³⁴ to incorporate te ao Māori concepts of well-being into the implementation of the then Child and Youth Wellbeing Strategy.

4.35
The agencies also engaged with Māori groups and NGOs on various initiatives, including the Welfare Overhaul,³⁵ the Working for Families Review, Ka Ora, Ka Ako, the Child Support Pass-On, and Debt-to-Government.³⁶

4.36
However, we heard that overall there has been a lack of consistent input from Māori and other non-government stakeholders into governance decisions on the work programme. Pou Tangata and other groups of non-government representatives each attended only one meeting with the Child and Youth Wellbeing Ministerial Group about the Strategy.³⁷ People we spoke with told us that they were concerned about a lack of engagement by decision-makers with children and families with lived experience of poverty.

4.37
We also heard there is a lack of consistent input when implementing specific child poverty initiatives. The agencies reported that they do not systematically engage with Māori and other stakeholder groups. Rather, for each new initiative, a decision is made whether to engage, which one NGO described to us as "dipping in and dipping out".

4.38
These findings are consistent with those of a process evaluation that the Department of the Prime Minister and Cabinet commissioned as part of its 2022 review of the Strategy.³⁸ It found that strong processes for consulting with stakeholders were set up when the Strategy was developed, but that there had been less input from Māori and other independent experts in the implementation phase. The review also found that there were only a small number of examples of public organisations collaborating with NGOs to deliver initiatives under the Strategy.

4.39
Even when stakeholders provided input, they were often not satisfied with the nature of the engagement. Pou Tangata felt that it had not seen any real change from its 18 months of meetings with the Child Wellbeing and Poverty Reduction Group before the Strategy was updated, and told us that its ideas had not been listened to or acted on.

4.40
Other stakeholders saw some engagements as transactional. One commented that "once they have their strategy, they go back into their Ministerial towers."

4.41
One agency told us they were mindful that some stakeholder groups experience engagement fatigue. However, we consider that this is partly because they are not sure whether or how their feedback is used or if it results in any changes. NGOs reported that relationships can feel one-sided as a result.

4.42
We understand that there has been a positive shift in the relationship with Pou Tangata. The Child Wellbeing and Poverty Reduction Group continued to meet with Pou Tangata about advice that informed the updated Strategy, and since then has continued to regularly meet with Pou Tangata to discuss Strategy implementation and monitoring. It will be important that MSD continues its efforts to strengthen engagement with Pou Tangata and other stakeholders.

4.43
Challenges with consistently engaging stakeholders are not unique to work related to child poverty. Previous audits we have carried out on complex work programmes that require agencies to work collectively have also found that public organisations do not consistently engage with stakeholder groups,³⁹ meaning that enduring, reciprocal relationships are not formed.

The lack of enduring relationships can be a barrier to enabling decision-making, design, and delivery of integrated services at a local level

4.44
One of the principles in the updated Strategy is that investment will provide opportunities for decision-making, design, and delivery of services and interventions to occur at local and iwi level. This is consistent with an outcome of the Prime Minister and Cabinet's 2022 review of the previous Strategy – that centrally enabled, locally led, whānau-centred approaches are a key enabler to better outcomes for children.

4.45
The Productivity Commission has also suggested that these approaches can provide more effective and responsive assistance to individuals, families, and whānau experiencing persistent disadvantage.

4.46
We are starting to see more strategies and plans that include a focus on these approaches. However, we heard from NGO representatives that much more needs to be done. During a focus group with NGOs, we were told "We are nowhere near centrally enabled, whānau-centred, and locally led services".

4.47
When we looked at how well public organisations support Whānau Ora and whānau-centred approaches in 2023, we found there was not yet a significant shift towards whānau-centred approaches, or systemic consideration of where and when these approaches would be appropriate.⁴⁰

4.48
These findings are also consistent with the Productivity Commission's finding that New Zealand's public accountability and funding settings do not adequately enable whānau-centred and locally led services.

4.49
Enduring, reciprocal relationships between agencies, community organisations, and iwi leaders are critical to these types of approaches, and to integrating government and NGO services at the frontline.

4.50
Many of the people we talked to consider that the lack of input of disadvantaged groups into governance decisions is also a barrier to addressing inequities in the rates of child poverty for Māori, Pasifika, and those affected by disabilities.

4.51
For public organisations to build meaningful relationships with Māori and other stakeholder groups, all parties need a shared understanding of each other's interests and roles in reducing child poverty. Public organisations will also need to make sure that they hear and respond to stakeholders where appropriate, and engage with Māori, Pasifika, and those affected by disabilities in a consistent, sustained way.

4.52
MSD told us that it considers it important for agencies to build a shared view about who they should engage with on particular child poverty matters, the purpose of the engagement, and how they will engage. We agree, and consider it would be helpful to do this in consultation with stakeholders.

4.53
In our view, public organisations need to shift to systematically engaging with Māori, other disadvantaged groups, and communities in strategic rather than transactional ways. As one NGO representative told us, "[ongoing engagement] has to be in the DNA."

Recommendation 3
We recommend that the Ministry of Social Development strengthen engagement with Māori, other population groups disproportionately experiencing child poverty, and relevant community organisations to enable more consistent and sustained input into the work programme to reduce child material hardship.

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27: By wrap-around support we mean support that involves providing comprehensive, individualised services that address multiple aspects of a person's needs. Such support is client-centred and would involve collaboration among various service providers to ensure that the support is holistic and co-ordinated.

28: New Zealand Productivity Commission (2023), A fair chance for all: Breaking the cycle of persistent disadvantage, at treasury.govt.nz.

29: The Oranga Tamariki Action Plan sets out how the chief executives of six designated children's agencies will work together to achieve the Child and Youth Strategy outcomes for the core populations of interest to Oranga Tamariki.

30: New Zealand Productivity Commission (2023), A fair chance for all: Breaking the cycle of persistent disadvantage, page 54, at treasury.govt.nz.

31: See Controller and Auditor-General (2023), Meeting the needs of people affected by family violence and sexual violence and Controller and Auditor-General (2024), Meeting the mental health needs of young New Zealanders, at oag.parliament.nz.

32: These stakeholders included representatives from Māori and Pasifika organisations, NGOs, science advisors, child poverty experts, children and young people, and members of the former Strategy Reference Group.

33: The stakeholders included representatives of children and young people, Māori, Pasifika, NGOs, Local Government New Zealand, and academics and thought leaders.

34: Pou Tangata is one of five National Iwi Chairs Forum Pou and it has six priorities. These are skills and employment, mātauranga, data, oranga tamariki, te ora o te whānau, and hauora.

35: The Welfare Overhaul was a large programme of work designed to reform welfare settings to ensure that people have an adequate income and standard of living.

36: The Debt-to-Government work aimed to reduce the impact of government debt for people in hardship. It focused on ensuring that debt recovery is fair, effective, and avoids exacerbating hardship, and also on preventing debt from occurring to avoid future problems for those in hardship.

37: Pou Tangata was invited to attend the Strategy Ministerial Group's meetings twice a year, but this did not happen because the Ministerial group did not meet as planned. The other groups that separately attended one ministerial meeting each were children and young people, including those with disabilities, and children's rights representatives.

38: Allen and Clarke (2022), Process evaluation of the Child and Youth Wellbeing Strategy, at msd.govt.nz.

39: See, for example, Controller and Auditor-General (2023), Meeting the needs of people affected by family violence and sexual violence, Controller and Auditor-General (2024), Meeting the mental health needs of young New Zealanders, and Controller and Auditor-General (2023), How well public organisations are supporting Whānau Ora and whānau-centred approaches, at oag.parliament.nz.

40: Controller and Auditor-General (2023), How well public organisations are supporting Whānau Ora and whānau-centred approaches, at oag.parliament.nz.