Community Scoop

The $630 million funding gap – how do we work together to close it?

brenda-pilott-small-72dpiNational Manager | Social Service Providers Aotearoa

People working in the social services sector have always known their organisations are under-funded but now we have an independent study that shows just how big the gap is between the funding government provides to our sector and what it actually costs to operate.

Drawing on a wide range of data sources, consulting firm MartinJenkins has quantified the gap, which amounts to less than two-thirds the real cost.  The report found there’s a significant shortfall in basic running costs ($130 million), a big shortfall in wages ($300 million), and a $200 million gap between the volume of services contracted and what is actually delivered.  It comes to $630 million a year.

The people who work in our social service organisations are bearing the brunt of this funding gap, in low wages, long hours and lack of resources.  Despite all this, these providers deliver far more than they are contracted for, and each day support children, young people, families and communities.  Their work is often complex, requires judgement and a wide range of skills, and makes a real difference.

SSPA commissioned this research which was funded by donations from a range of philanthropic trusts and foundations and from some SSPA members.  We wanted good evidence to build a strong case for more funding.

We also wanted ideas for how to change the flawed social services funding system.  There have been some positive developments – more multi-year contracts giving greater certainty, CPI adjustments this and last year, fully-funded new programmes, some work on co-design.  But there is much still to be done and the report sets out 39 recommendations for changes to fundamentally reset the funding system.

There are immediate issues to be tackled, with providers under real funding pressures especially on wages, but the real gains will be when we have a fair and transparent system which reflects the real cost – and value – of essential social services.

Read the full report here


This blog has been contributed by a member of the ComVoices network. The views presented here are not necessarily those of ComVoices.

ComVoices is a Wellington based network of national community and voluntary sector organisations. It was established so that sector organisations would have a more powerful voice at Government level and in the community.

Click here for our website