Microsoft Word - 8195 Cover page.docx The International Indigenous Policy Journal Volume 11 | Issue 4 December 2020 Does a Payment-for-Outcomes Model Improve Indigenous Wellbeing? Commissioning Agencies and Social Impact Bonds in New Zealand Louise Humpage University of Auckland, New Zealand, l.humpage@auckland.ac.nz Recommended Citation Humpage, L. (2020). Does a payment-for-outcomes model improve Indigenous wellbeing? Commissioning agencies and social impact bonds in New Zealand. The International Indigenous Policy Journal, 11(4). https://10.18584/iipj.2020.11.4.8195 Does a Payment-for-Outcomes Model Improve Indigenous Wellbeing? Commissioning Agencies and Social Impact Bonds in New Zealand Abstract Commissioning agencies and social impact bonds are two examples of New Zealand’s shift towards payment-for- outcomes funding mechanisms over the last decade, as the government attempted to improve both policy innovation and social outcomes. This article highlights that although the commissioning agencies have been more successful than social impact bonds, neither has completely achieved these goals of innovation and improved outcomes. This is particularly concerning given Indigenous Māori are disproportionately impacted by both policies. Discussion concludes by highlighting some of the problems associated with applying a payment-for- outcomes model to Indigenous Peoples, given these funding mechanisms are becoming increasingly popular in other settler nation states. Keywords Payment-for-outcomes, New Zealand, Indigenous Peoples, social impact bonds, commissioning agencies Acknowledgments In addition to the anonymous reviewers who provided helpful comments, the author would like to acknowledge that this research was partially funded by the Australian Research Council and the University of Auckland Faculty of Arts Performance-Based Research Fund. Creative Commons License This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License. 1 Humpage: Does a Payment-for-Outcomes Model Improve Indigenous Wellbeing? Published by Scholarship@Western, 2020 Does a Payment-for-Outcomes Model Improve Indigenous Outcomes? Commissioning Agencies and Social Impact Bonds in New Zealand This article examines two new funding mechanisms—commissioning agencies and social impact bonds (SIBs)—for social services implemented in New Zealand since 2010. Many of New Zealand’s government services were contracted out to non-government, largely non-profit providers—including many Indigenous Māori organizations—as part of broader neoliberal market reforms in the 1980s and 1990s (Lavoie et al., 2010). Social service contracts initially focused on outputs, or the number of social services provided (Productivity Commission, 2015), but interest in contracting for outcomes grew in the 2000s as rates of poverty, income inequality, benefit receipt, poor health, and domestic violence continued or worsened, particularly amongst Māori (Lloyd, 2018; Ministry of Health, 2018). Although trialled in New Zealand before 2008, the National Party-led government (2008-2017) directed a fundamental shift towards a payment-for-outcomes model (PfO, also known as payment-by- results or payment-by-success). Commissioning agencies and SIBs are two examples of the PfO model, where government does not specify how a service will be delivered but defines an outcome it wishes to purchase. The service provider then designs services to deliver that outcome, with government making performance payments to the provider if set outcome goals are met. In this context, “outcomes” refer to the “longer-term consequences of an intervention or programme in terms of the ends sought (e.g., better health or reduced re-offending)” (Productivity Commission, 2015, p. xiii). This definition is broad enough to incorporate both the individualistic outcome measures common in social statistics and measures of collective wellbeing—notably a vibrant culture and language, knowledge of tribal genealogy, and power and control over their own lives (Lloyd, 2018)—that Māori believe are also important. The National Party-led government elected in 2008 claimed the PfO model would improve both policy innovation and social outcomes. Later discussion highlights that, even if the government was reluctant to use racialized frames, these goals broadly aligned with Indigenous calls to address the failure of current government services to meet the needs of Indigenous Māori: Commissioning agencies involved Māori gaining greater autonomy over funding for Māori services, and SIBs targeted—and thus held the potential to improve the wellbeing of— “problem” groups that were disproportionately Māori. PfO models have been critiqued internationally (Berndt & Wirth, 2018; Gardner et al., 2016; Grimwood et al., 2013). By introducing financial incentives tied to specific performance outcomes, both commissioning agencies and SIBs are said to “financialize” social services. This is because performance payments are built on a profit-maximising logic, which frames vulnerable clients seeking social services as sources of profit, rather than citizens with rights, potentially encouraging “providers to ‘cream’ the more tractable cases and ‘park’ the less tractable ones” (Grimwood et al., 2013, p. 1; see also CBC, 2019a; Dowling, 2017). To ensure the financial viability of the provider, the performance targets negotiated with governments are also rarely ambitious and focus less on what clients need and more on what organizations can produce data about; these are not necessarily the same thing (Grimwood et al., 2013). Proponents of SIBs frequently claim that financial risk is shifted away from the State to private investors (Berndt & Wirth, 2018). Yet, Dowling (2017) argued, “On the one hand, the state accesses finance to achieve social policy goals; on the other hand, finance uses the state to accumulate financial profits” (p. 295). In this way, public funds become privatized. While this may align with Indigenous Peoples’ desire to gain greater control over public funds, both SIBs and commissioning agencies blur the 2 The International Indigenous Policy Journal, Vol. 11, Iss. 4 DOI:10.18584/iipj.2020.11.4.8195 government’s responsibility for addressing their rights as citizens and as First Peoples. Evidence further suggests that claims about PfO models being less expensive, yet encouraging more innovation than government-provided services, are also overstated (Berndt & Wirth, 2018; CBC, 2019a; Grimwood et al., 2013). The extant literature provides no in-depth analysis of PfO models as they relate to Indigenous Peoples, who have reasons to both benefit from and be concerned by this policy development. Although discussion notes how Indigenous Peoples define both “innovation” and “outcomes” differently than government, this article assesses whether the New Zealand government achieved its goals by its own definitions of these terms. It asks: Did commissioning agencies and SIBs: (a) result in greater levels of innovation, and (b) improve outcomes? Following a more detailed discussion of the policy background, the article draws on government documents, evaluations, and other research to qualitatively analyse both examples of the PfO model. The findings are relevant for other settler nation states where poor Indigenous outcomes are common, given these states are also experimenting with SIBs and commissioning. Background: Payment-for-Outcomes as a Solution for Indigenous Disadvantage There is growing evidence that improving Indigenous outcomes within settler nation states requires not just better resources, but a radical mind shift amongst governments. The longstanding Harvard Project on American Indian Economic Development (Cornell & Kalt, 1998) stresses that culturally grounded and capable Indigenous governance institutions and leaders are crucial, but sovereignty also matters for tribal success. Similarly, Chandler and Lalonde (1998) in Canada found a correlation between First Nations youth suicide rates and community involvement in securing Aboriginal title, self-government, control of police and fire services, establishment of local cultural facilities, youth attendance in band- administered schools, and control over health services. In sum, cultural continuity is important for health and other social outcomes (Auger, 2016; Bals et al., 2011; Houkamau & Sibley, 2011; Wexler, 2014). But this alone will never be sufficient to meet the needs and aspirations of Indigenous Peoples. Indigenous control over funding equivalent to that given to government-provided services addressing intergenerational, systemic needs are also necessary (see CBC, 2019b; Lavoie et al., 2010). New Zealand governments, however, remain reluctant to engage in the kind of power sharing that would facilitate improved Māori outcomes. Initially recognised in the Māori-language version of the Treaty of Waitangi 1840, Māori sovereignty was sidelined as land was bought, confiscated, or stolen and Māori language and culture were repressed. Since the 1970s, the Waitangi Tribunal has heard claims from tribal groups, mostly regarding land and resources but increasingly focused on the ongoing failures of the State to meet the needs of Māori in regard to education, health, the justice system, citizenship rights and equality, the Constitution, electoral system, and self-government (Lloyd, 2018). Social policy in New Zealand is often framed in regard to Article 3 of the Treaty, which concerns equal citizenship rights. But Article 2 of the Māori-language version guaranteed Māori the continuing possession of tino rangatiratanga [self-determination] in balance with the kāwanatanga [governance] granted to the British Crown in Article 1. Uniquely, the 2014 Tūhoe Settlement acknowledged the Tūhoe tribe’s mana motuhake [autonomy] and included a service management agreement aiming to build Tūhoe’s capacity to eventually take over social services (possibly including benefit payments, schools, healthcare, and housing within its tribal area (Moore et al., 2014; Stephens, 2014). But, despite 29 out of 120 Members 3 Humpage: Does a Payment-for-Outcomes Model Improve Indigenous Wellbeing? Published by Scholarship@Western, 2020 of Parliament being of Māori descent in 2017 and an Indigenous Māori Party forming part of the government between 2008 and 2017 (Humpage, 2017; Koti, 2017), discussion of greater devolution of funding and decision-making power to Māori is frequently regarded as radical and “separatist” (1NewsNow, 2014). Indeed, the New Zealand National Party—a conservative party that has historically alternated with the Labour Party in leading governments—has tended to support Treaty claim settlements because these align with its strong advocacy for property rights but opposes “separate rights” for Māori in social policy. Regarding “equal citizenship” as the goal, it has even promoted the abolition of all “race-based” social policies (Humpage, 2017). It thus came as a surprise when, following the 2008 election, the National Party negotiated supply and confidence agreements not only with the ACT Party (which shares similarly conservative views) but also with the Māori Party, which combines “a drive towards rangatiratanga [self- determination], and an attempt to address the socio-economic needs of Māori” (Smith, 2010, p. 215). The National Party’s move aimed to shore up sufficient support for more than one 3-year term in New Zealand’s Mixed Member Proportional (MMP) representation environment. But it is also important to acknowledge overlaps between the National Party’s neoliberal agenda and the economic interests of tribal and Māori businesses with significant financial assets (Humpage, 2017). In particular, National- led governments in the 1990s oversaw the massive shift towards contracting out the provision of social services, particularly in health, to tribal and pan-Māori groups wishing to develop and deliver culturally appropriate services (Lavoie et al., 2010). By the National Party’s return to power in 2008, Māori organizations were significant players in the social policy field (Smith et al., 2018). More broadly, the National-led government’s strong focus on delivering “better public services” (State Services Commission, 2017) and “more effective social services” (Productivity Commission, 2015) coincided with the Māori Party’s desire for new policy solutions to improve Māori outcomes. In particular, both the National and the Māori parties viewed the welfare system as part of the “problem” for Māori, believing that individuals and families should take greater responsibility for themselves (Turia, 2006). The most significant initiative emerging from the Māori Party’s Supply and Confidence Agreement was the Taskforce on Whānau-Centred Initiatives (2010; hereafter Taskforce), led by prominent Māori psychiatrist Sir Mason Durie. It recommended a culturally anchored, strengths-based Whānau Ora strategy that empowers the collective entity of whānau, defined as a multi-generational family group made up of many households, supported and strengthened by a wider network of relatives (Taskforce on Whānau-Centred Initiatives, 2010). The concept of whānau ora (literally “family wellbeing” but recognising the inter-relationships between mental, physical, and spiritual health) challenges the more individualized “outcomes” with which government is usually concerned. The concept has long driven the work of Māori health organizations, many of whom adopt a “by Māori, for Māori” ethos (Smith et al., 2018). The Whānau Ora strategy established in 2010 applies the whānau ora concept to a wider range of social issues and, importantly, moves beyond individualized notions of “empowerment” by endorsing “a group capacity for self-determination” (Taskforce on Whānau-Centred Initiatives, 2010, p. 30). The co-leader of the Māori Party, Tariana Turia, was appointed Minister for Whānau Ora and a first phase of the strategy involved funding whānau plans and “navigators” that assist whānau to connect with a range of mainstream services and other agencies and the development of Whānau Ora provider collectives. 4 The International Indigenous Policy Journal, Vol. 11, Iss. 4 DOI:10.18584/iipj.2020.11.4.8195 This article focuses on a second phase of Whānau Ora, which established non-government commissioning agencies to make funding decisions on behalf of the State starting in 2014. The Taskforce on Whānau-Centred Initiatives (2010) had proposed an independent, Māori-led Whānau Ora Trust to administer a fund derived from appropriations across a number of portfolios that would report directly to the newly created Minister for Whānau Ora and Parliament. Cabinet decided in 2013, however, to make Te Puni Kōkiri (Ministry of Māori Development) the lead agency, supported by the Ministries of Health and Social Development. Challenging the original intention to target only Māori, Cabinet then established three commissioning agencies: one each for the North and South Island, which both have a strong Māori focus but are inclusive of all New Zealanders, and one focused on Pasifika families across New Zealand. Pasifika peoples have migrated or are descended from islands in the Pacific and often experience similarly poor socio-economic outcomes to Māori (Independent Whānau Ora Review Panel, 2018). Despite the strategy no longer being an exclusively Indigenous initiative, the commissioning agencies offer Māori more decision-making power over social service funding than traditional contracting. Commissioning involves procurement but also strategic planning, consultation, needs assessment, network development and stakeholder management, and research and evaluation (Productivity Commission, 2015; Rees, 2014; Wehipeihana et al., 2016). Commissioning agencies “have a high degree of autonomy to determine the nature and quantum of commissioning, provided they meet the targets specified in their contract” (Wehipeihana et al., 2016, p. 20), which includes incentive payments that reward the commissioning agencies if they achieve results in priority or hard-to-reach areas above and beyond the outcomes achieved. Although there are certain overlaps between commissioning and Indigenous desires for greater control over funding (Boulton et al., 2018), the focus on commissioning and PfO was not unique to Whānau Ora but instead part of an international trend towards diversifying the number and type of providers offering services. Driven partly by public choice theory’s assumption that public services are shaped by self-interest and thus inhibit innovation and an incentive to improve, and partly by ongoing dissatisfaction with existing contracting models (Rees, 2014), the National-led government’s broader interest in applying market principles to social services was evident in the Welfare Working Group (WWG) established in 2010 and the Productivity Commission created in 2011. Both promoted non- government commissioning agencies as a way of positioning government agencies as “system stewards,” clearly defining desired outcomes and promoting diverse approaches, monitoring them, and encouraging the spread of successful ones—without having to provide services themselves (Productivity Commission, 2015; WWG, 2010). SIBs were a further funding tool discussed by the Productivity Commission (2015). They take the PfO model to a new level because for-profit organizations invest the funds needed by a service provider to deliver a certain service, and then the government pays service providers performance payments and funders returns on their investment only if outcomes are significantly improved. SIBs were regarded as an innovative way of spreading the risk of investing in new, possibly experimental initiatives (Office of the Minister of Finance and Office of the Minister of Social Development, 2016). Yet, Malcomson (2014) noted that SIBs: 5 Humpage: Does a Payment-for-Outcomes Model Improve Indigenous Wellbeing? Published by Scholarship@Western, 2020 Are a new approach to privatization that financializes public service delivery on the basis of profit generation. Because government’s role is effectively reduced to paying costs when contract terms are fulfilled, the model effectively outsources not only service delivery but also key elements of policy development, implementation and assessment. (p. 3) Like commissioning agencies, SIBs thus side-step shortfalls in the levels of funding for social service delivery that impact delivery outcomes, as well as the broader structural factors that shape wellbeing, by framing the State’s failure largely in terms of poor service innovation and effectiveness. Two SIB pilots were implemented in 2017. Unlike SIBs in Manitoba, Canada, and Queensland, Australia, that directly target Indigenous Peoples (CBC, 2019c; Donaldson, 2017), neither trial specifically targets Māori and there is no evidence that tribal entities, many of whom have received significant Treaty settlements, were consulted or courted as potential investors. Yet both bonds run in an urban location with a high Māori population and focus on social issues disproportionally affecting Māori. The first pilot aimed to assist 1,700 working-age benefit recipients diagnosed with a mental health condition transition into employment. APM Workcare Ltd. (hereafter APM), owned by a for- profit Australian parent company but providing vocational rehabilitation and disability services in New Zealand since 2011, started service delivery in April 2017. Four investors contributed the NZ$1.5 million needed for the bond, including the provider, Wilberforce Foundation (a Christian philanthropic fund), Janssen-Cilag (a subsidiary of healthcare giant Johnson & Johnson), and Prospect Investment Management Ltd. That APM took the riskier tranche of bonds (NZ$300,000) was said to provide “a tangible incentive to ensure the outcomes are delivered and represents a strong signal of their expectation of success” (McBeth, 2017). The second SIB pilot started in September 2007, aiming to reduce youth reoffending levels in the same urban location. It is delivered by the charitable organization Genesis Youth Trust (2018; hereafter, Genesis), which runs the country’s largest police-affiliated youth development programme with a cohort that is 69% Māori. It targets young people with a medium or high Youth Offending Risk Screening Tool score who have committed an offence. The Wilberforce Foundation chose to also invest in the second pilot, along with Mint Asset Management Limited, two charitable trusts (Caleb No.2 Trust and Hosanna Charitable Trust), and the New Zealand Superannuation Fund (Genesis Youth Trust, 2018). Central to both commissioning agencies and SIBs is the idea that provider payments should be directly linked to the outcomes they achieve because (a) contracting for an outcome, rather than a specific service, would incentivize providers to be more innovative by offering more freedom to design services suited to local needs; and (b) this innovation would lead to better results for New Zealand citizens (Productivity Commission, 2015). Such claims understood innovation as “the process of translating an idea or an invention into a good or service that has value” (Productivity Commission, 2015, p. xii). References to business innovation and market principles such as competition and choice made clear that the government was largely focused on financial value (Productivity Commission, 2015). Mika (2016), however, argues that Māori innovation differs because profit might be important but “how you make money and what you do with the money is what sets the Māori business model apart” (para. 7). Thus, the kaupapa [agenda or plan] behind innovation matters. There are many historical and contemporary examples of Indigenous Peoples transforming resources to produce new products or processes (Drahos & Frankel, 2012) and dynamically responding to new environments both prior to 6 The International Indigenous Policy Journal, Vol. 11, Iss. 4 DOI:10.18584/iipj.2020.11.4.8195 and following colonization. Yet Indigenous innovation is often concerned with “cultural autonomy, remembrance and retrieval, self-determination, and community-based values linked with the maintenance, preservation, restoration, and revitalization of Indigenous knowledge systems that merge episteme with place and cultural practice” (Huaman, 2015, p. 4). Drahos and Frankel (2012) further argue that Indigenous innovation is characterized by “the strong presence of uncodified knowledge . . . best transferred by means of personal communication” (p. 18) and “its expression in collective [emphasis added] processes of generating information to reduce uncertainty” (p. 21). Indeed, New Zealand’s Waitangi Tribunal (2011) report into claims concerning New Zealand law and policy affecting Māori culture and identity explores how Western understandings regard both innovation and knowledge as being accessible to all unless there is potential profit to be achieved via patents and intellectual property rights. This contrasts with Māori desires to protect mātauranga [knowledge] Māori by limiting access to only those who earn the right to use it. Although Drahos and Frankel (2012) noted that Indigenous innovation is not purely about the protection of Indigenous knowledge, it can “include ‘back to the future’ thinking that brings tradition-based approaches into 21st century applicability” (Commissioning agency representative cited in Wehipeihana et al., 2016, p. 34). This challenges the idea that innovation must be “new” noted in the next section. The Productivity Commission (2015) acknowledged that “the objectives Māori have for social services are broader than just effectiveness and efficiency—social services have an important role to play in ‘Māori succeeding as Māori’ which, in this context, includes Māori being able to exercise duties of care that arise from tikanga [customary practices]” (p. 20). However, it did not specifically discuss what innovation means in an Indigenous context or that Indigenous outcomes were disproportionately poorer than for the non-Indigenous population. Within this limited framework, social services innovation was said to involve “introducing new or significantly improved services or business processes, for the purposes of getting better outcomes from available resources” (Productivity Commission, 2015, p. 177). This latter phrase reflects an emphasis on actuarial modelling for the basis of social investment that was developed under the National-led government, offering a deracialized argument that poor “outcomes . . . tend to occur together for a relatively small number of the most disadvantaged individuals and families,” thus placing a disproportionate financial burden on the state (Productivity Commission, 2015, p. 3). In this context, the government wanted: To get more from existing resources: the social services system needs to generate more innovation and learn more effectively from successful innovations; and commissioning organisations and providers of social services need to better understand and address the barriers to successful innovation and the spread of innovations. (Productivity Commission, 2015, p. 180- 181) Non-government providers were thus framed as both saviours and as part of the “problem.” The Productivity Commission (2015) argued that “government-provided services typically do not provide much room for experimentation” (p. 183), something it suggested was more common amongst non- government providers. Yet social services in New Zealand were slower than other services in adopting “productivity-enhancing business models” (Productivity Commission, 2015, p. 180). This is because 7 Humpage: Does a Payment-for-Outcomes Model Improve Indigenous Wellbeing? Published by Scholarship@Western, 2020 social services are small, local, and dependent on a few committed individuals; often work with “bare bones” funding; and are subject to overly prescriptive contracts which do not allow the types of “capital investments, substantial re-organisation of business processes and the re-deployment of staff” that may be required for innovation (Productivity Commission, 2015, p. 185). Thus, New Zealand’s “highly centralised approach [with decisions largely made by central government agencies] to commissioning social services . . . poses a barrier to learning and thus innovation” (Productivity Commission, 2015, p. 179). In contrast, “devolved approaches to commissioning services . . . can support a diversity of providers, which leads naturally to more innovation” and “distances the choice of new approaches from risk-averse central government ministers and officials” by engaging regions, communities, and subsidiary organizations (Productivity Commission, 2015, p. 180). In promoting PfO, in particular, the Productivity Commission did acknowledge some of the potential difficulties noted in the international literature (see Grimwood et al., 2013). They noted, “many providers are driven by a commitment to a mission rather than financial gain, which makes how they might react to incentives difficult to predict” (Productivity Commission, 2015, p. 51). It is difficult to set fee structures that would avoid perverse incentives, such as those that encourage providers to focus on clients who are easiest to place while neglecting hard to place clients, or that create a situation where activities that are not financially incentivised are crowded out. In addition, compliance costs can be significant, potentially threatening provider autonomy or demotivating them in other ways (Productivity Commission, 2015). Treasury (2013) also raised a number of practical barriers: the cost and difficulty of research on outcomes; attribution of outcomes to a particular provider when they do not fully control the environment needed for success; and weak cross-government collaboration and information sharing, which cause difficulties in determining actual outcomes for clients. One way to minimize attribution problems and perverse incentives is to have a well-defined cohort (Grimwood et al., 2013). Although both of the SIB pilots fit this bill—focusing on improving employment outcomes for benefit recipients with mental health issues and reducing youth reoffending—Whānau Ora’s holistic, all-New Zealanders focus does not. Furthermore, the pilots were tied explicitly to the National-led government’s 10 aspirational Better Public Service (BPS) result areas, which from 2012 to 2017 provided specific, measurable, and dated outcome targets, but Whānau Ora was not tied to these result areas. The most relevant result areas for the bonds were: reducing long-term welfare dependence; reducing the rates of total crime, violent crime, and youth crime; and reducing re- offending (State Services Commission, 2017). Although they provide a basis from which PfO could be implemented, the result areas do not acknowledge that Māori are more likely to receive benefits and be convicted of a crime. Moreover, they exemplify the National Party’s tendency to view social problems as resulting from poor behaviours amongst individuals, rather than shaped by intersecting structural forces (such as colonization or institutional racism), and Western, individualized understandings of health and wellbeing (Alfred, 2009; Czyzewski, 2011). Here again, it sits in tension with Whānau Ora’s collectivist, holistic service model. Berndt and Wirth (2018) also noted that social bonds and other payment-for-outcomes models tend to render societal issues as more technical problems that can be “corrected” with behavioural engineering. National’s social investment approach, noted earlier, certainly collates data from across sectors for actuarial modelling with the aim of predicting the financial cost of failing to solve social problems. Although this approach “questions whether simply spending more on doing the same things is the right 8 The International Indigenous Policy Journal, Vol. 11, Iss. 4 DOI:10.18584/iipj.2020.11.4.8195 answer” (Wehipeihana et al., 2016, p. 22), it also means that providers are rewarded for producing data that suggests these risks have decreased, which does not necessarily correlate with supporting people to get what they need or become who they wish to be (Grimwood et al., 2013). In the remainder of the article, I assess the limited evidence publicly available to determine whether commissioning agencies and SIBs are likely to improve Māori outcomes. The two policies are good comparators because they similarly adopt a PfO model and significantly impact Māori, even if SIBs did not explicitly articulate this focus. My analysis first considers whether the government met its own goals for innovation by assessing whether commissioning agencies or SIBs actually involved “introducing new or significantly improved services or business processes, for the purposes of getting better outcomes from available resources” (Productivity Commission, 2015, p. 177). I then assess whether they led to improved outcomes or “longer-term consequences of an intervention or programme in terms of the ends sought” (Productivity Commission, 2015, p. xiii). This broad definition enables examination and comparison of the Indigenous-led indicators of wellbeing embodied within Whānau Ora and the more generic—and arguably less useful—outcomes articulated for SIBs. In this sense, the two policies together act as an international test case for the ability of a PfO model to improve Indigenous wellbeing. Whānau Ora Commissioning Agencies In 2014, three consortiums won the tender to be Whānau Ora Commissioning Agencies. Each differs in makeup, focus, and level of funding: • Te Pou Matakana (later renamed the Whānau Ora Commissioning Agency) covers the North Island, although its work is heavily focused on the city of Auckland, where many Māori live. The agency is owned by the National Urban Māori Authority (88%), Te Whānau o Waipareira (9%), and the Manukau Urban Authority (3%), all well-established pan-Māori organizations in Auckland. Te Pou Matakana received funding of almost NZ$43 million over 2018 to 2019 and funds 13 lead partners who sub-contract to over 80 Whānau Ora partners (Independent Whānau Ora Review Panel, 2018). • The South Island’s Te Pūtahitanga o te Waipounamu is a newly formed limited partnership between nine iwi [tribes] in the South Island (including the Chatham Islands), which each hold equal ownership of 11.11% (Independent Whānau Ora Review Panel, 2018). It focuses on social enterprises developed by whānau locally and has a shareholders’ council, known as Te Taumata, responsible for the investment strategy focused on enterprise and job creation, education and leadership, wellbeing, and inspiration and catalysts (Productivity Commission, 2015). The agency delivers across 16 sites and received just over NZ$12 million in 2018 to 2019 (Independent Whānau Ora Review Panel, 2018). • The third agency, Pasifika Futures, received almost NZ$17 million in the same period and delivers from four largely urban sites across the country to Pasifika New Zealanders. It builds on the 20-year history of the Pasifika Medical Association, which is the sole owner, but is itself constituted by three equal individual shareholders (Independent Whānau Ora Review Panel, 2018). 9 Humpage: Does a Payment-for-Outcomes Model Improve Indigenous Wellbeing? Published by Scholarship@Western, 2020 Given this article’s focus on Indigenous outcomes, findings relating to Pasifika Futures are not assessed in the following sections analysing the innovation and outcomes associated with the commissioning agencies. Innovation It is tricky distinguishing innovation emerging from the three key aspects of the Whānau Ora strategy: a unique focus on assisting whānau as a collective, rather than individuals; the navigators used to help whānau mediate different government and non-government services; and the commissioning agency funding mechanism. However, there is some evidence that the commissioning agencies, specifically, are facilitating innovation with funding pools actively aiming to encourage new ideas, such as Te Pūtahitanga o te Waipounamu’s Commissioning Pipeline open tender and selective procurement process. Te Pou Matakana leaders also describe themselves as “continuously reflecting on evaluative and data-based evidence to spot potential ‘game changers’—approaches that show promise or initiatives that have the potential for transformative scale” (Wehipeihana et al., 2016, p. 68). The Productivity Commission (2015) further comments: The organisational culture within the commissioning agencies appears to be significantly different to the culture within government purchasers, particularly with regards to their attitudes on what can be done, how soon it can be done, how it can be done and how measurable the outcomes would be. This is likely to make the commissioning agencies more responsive than the average government purchaser. (p. 1) This view was supported by the Independent Whānau Ora Review Panel (2018), which cited a Whānau Ora partner organization. This organization explained that, while the commissioning agency “buy(s) the outcome, we do the service description. This allows us to do what is actually important to whānau. It allows us to be innovative, and we don’t have to justify or explain being Māori” (p. 47). The Independent Whānau Ora Review Panel (2018) further praised the high level of support, including leadership and capacity building activities, that commissioning agencies provide to partners, providers, and whanau entities, as well as their attempts to encourage collaboration and partnership amongst providers. For example, Te Pūtahitanga o te Waipounamu adopted a social enterprise approach to complement rather than threaten or replicate existing contracts, while Te Pou Matakana introduced Collective Impact, where a group of partners and organizations from different sectors commit to work to a common agenda to support whānau to achieve specific outcomes. Boulton et al.’s (2018) independent research on Te Pou Matakana further reports that this agency works through issues and difficulties when outcomes cannot be achieved or underfunding becomes apparent and a contract has to be renegotiated, providing more room to risk trying something new because “getting it wrong” does not have a catastrophic impact on funding. These comments support Lavoie et al.’s (2010) work on contracting processes across settler nation states, which indicates that trying to gain efficiencies through competition is misaligned with the more collaborative and cooperative basis of Indigenous social services. Many of the funding pools established by the commissioning agencies also differ from those available through mainstream agencies, which tend to require drawn-out application processes and are usually developed with little or no consultation. In particular, the flexible and immediate funding for whānau, 10 The International Indigenous Policy Journal, Vol. 11, Iss. 4 DOI:10.18584/iipj.2020.11.4.8195 often providing same-day support, has been a “key factor in building immediate trust and rapport between participating whānau and navigators” (Independent Whānau Ora Review Panel, 2018, p. 47). For example, Te Pou Matakana’s Whānau Direct enables whānau to quickly access up to NZ$1,000 in “moments that matter” to respond positively to situations. Both agencies also consulted with whānau before developing funding priorities and investment streams, have responded to provider and whānau feedback, and offer opportunities to co-generate contracted milestones and outcomes or co-produce services (Boulton et al., 2018; Wehipeihana et al., 2016). Despite these positive moves, however, there is evidence that the commissioning agencies also replicate, rather than overcome, some of the problems within the traditonal contractually based funding system that hinders innovation. For example, the wide-ranging geographical focus of commissioning agencies means they struggle to be closely connected to all whānau and communities, particularly those living in rural areas or deprived populations (Independent Whānau Ora Review Panel, 2018). The Independent Whānau Ora Review Panel (2018) was also concerned that in some areas crisis-focused provider practices “were charactertised as filling gaps in government agency service provision or undertaking the role of agencies that had failed to discharge their responsibilities to whānau” (p. 51). The Panel saw this as problematic because (a) in some cases, navigators and other Whānau Ora staff were attempting to solve problems for which they had no professional training; and (b) it diverted resources away from the long-term goals of capacity and self-reliance building. The Independent Whānau Ora Review Panel (2018) stressed, “Whānau Ora is not a substitute for central government inaction” (p. 57). Yet, there has been limited buy-in and awareness of Whānau Ora amongst government agencies. In part this is due to the inherent variation that comes from three commissioning agencies doing different things and the focus on whānau rather than individuals (Auditor-General, 2015; Independent Whānau Ora Review Panel, 2018). Awareness and buy-in were supposed to be facilitated when the initial governance group was replaced in 2014 by the Whānau Ora Partnership Group, comprising six ministers of the Crown and the chairpersons of six iwi to ensure complementary efforts and idenitify opportunities for collaboration across ministerial portfolios (Boulton et al., 2018; Wehipeihana et al., 2016). This group, however, has not met since 2017 and there are plans to replace it with an independent advisory group to the Minister (Cabinet Social Wellbeing Committee, 2019). Such discontinuity of leadership cannot have facilitated all government agencies knowing what Whānau Ora involves and how they can become engaged. These problems of reach and poor awareness of Whānau Ora are associated with lack of funding. The National-led government initially allocated only NZ$134 million to Whānau Ora, instead of the NZ$1 billion proposed by the Taskforce. Smaller allocations followed (New Zealand Government, 2016). The Labour-led government offered nothing in the 2017 Budget pending a review of the strategy, although this culminated in a significant funding boost from 2019 (Wright, 2019). Such uncertainty about funding hardly encourages providers to take the risks that innovation requires (Independent Whānau Ora Review Panel, 2018). Boulton et al. (2018) also note a major discrepancy between expectations and funding: “[Te Pou Matakana] is responsible for delivering Whānau Ora outcomes to over 80% of the total Māori population in New Zealand but is only funded at a fraction of the rate of other mainstream government bodies” (p. 51). Citing international research that identified sufficient financial sourcing as one of the most important factors influencing the success of commissioning, Boulton et al. (2018) thus ask: “Is commissioning for Whānau Ora a genuine attempt to meet the goals and aspirations of the 11 Humpage: Does a Payment-for-Outcomes Model Improve Indigenous Wellbeing? Published by Scholarship@Western, 2020 Whānau Ora policy or is it simply risk transfer?” (p. 54). This echoes the experiences of Indigenous Peoples elsewhere, who have similarly found that greater Indigenous control often means less funding than that available to government agencies delivering similar services (see CBC, 2019b). Outcomes Despite these mixed findings regarding innovation, the commissioning agencies do appear to have made some improvements in Māori outcomes, even when taking into account the impact of the first phase of Whanau Ora was already having before commissioning agencies were introduced. Table 1 summarises qualitative and quantitative data collected by Te Puni Kōkiri, which suggests that the combination of culturally specific whānau plans and the integrated service knowledge of navigators was achieving positive outcomes for the 9,408 whānau comprising 49,625 whānau members who had received whanau-centred services in the first four years (Te Puni Kōkiri, 2015). Navigators, in fact, were so successful that they continued to be funded, rather than being phased out as planned (Auditor-General, 2015). Table 2 summarizes outcomes from the two commissioning agencies from 2016 to 2017; data entirely comparable with Table 1 is not available but notably a greater number of whānau appear to be achieving positive outcomes. For instance, 84 to 95% of whānau assisted by the two commissioning agencies achieved most healthy eating and exercise outcomes, while Table 1 indicates only 46% did so in the first four years of Whānau Ora. In contrast, improvements in income, employment, and other factors that are influenced by the broader structural context are much weaker across both sets of data. It is also noticeable that Te Pou Matakana’s te ao Māori [Māori worldview] and whanau or whakapapa [genealogy] knowledge outcomes are extremely low compared to either the early data or that of Te Pūtahitanga o te Waipounamu. The difference between the two agencies is likely linked to Te Pūtahitanga o te Waipounamu being led by tribal organizations while Te Pou Matakana springs from urban, pan-Māori organizations often catering to those only just discovering their Māori cultural identity. This difference is still concerning given participation in te ao Māori is one of the key Whānau Ora outcome indicators and given the international literature finds cultural continuity a key factor in shaping outcomes. Te Pou Matakana also seems not to have engaged with the environmental stewardship outcome at all. It is difficult to calculate total numbers of clients assisted since the commissioning agencies were introduced but in the 2016 to 2017 financial year over 13,500 whānau received services or support from a Whānau Ora commissioning agency (Te Puni Kōkiri, 2018), a rate higher than the first four years in total. Te Pou Matakana engaged 9,367 of these whānau, exceeding its PfO targets. Moreover, despite being available to all New Zealanders, the majority of whānau benefitting from Te Pou Matakana (85- 89%) and Te Pūtahitanga o te Waipounamu (70%) have been Māori (Independent Whānau Ora Review Panel, 2018). This is compared to only 64% of engaged whānau being Māori in the first four years (Te Puni Kōkiri, 2015). 12 The International Indigenous Policy Journal, Vol. 11, Iss. 4 DOI:10.18584/iipj.2020.11.4.8195 Table 1. Whānau Ora Outcomes 2010-2014 Intermediary Outcomes % of Whānau Indicating Improvement Higher-Level Outcomes % of Whānau Indicating Improvement Access to services Happiness Motivation Positive whānau relationships Mutual respect Parenting or caregiving confidence Skills Cultural confidence Whakapapa knowledge 71 71 69 69 69 64 62 54 47 Safety Education and training Early education use Housing situation Healthy eating and exercise Income Employment Reduced smoking 76 61 53 48 46 44 38 33 On average, whānau experienced more than seven intermediary gains On average, whānau experienced more than three higher-level gains in wellbeing The strongest, statistically significant correlations found between intermediary and higher-level goals were: Feelings of connectedness and education and training (r = 0.453, p < .01) Parenting confidence and early childhood use (r = 0.428, p < .01) Knowledge of whakapapa and reduced smoking (r = 0.428, p < .01) Feelings of connectedness and service worker supporting whānau in achieving goals (r = 0.388, p <.01) New skills and service worker supporting whānau to make appointments (r = 0.368, p < .01) Note. Findings drawn from Te Puni Kōkiri’s (2015) analysis of provider reporting and 895 whānau surveys (see pp. 38-50). Table modified from Humpage (2017, p. 483), reproduced with permission. 13 Humpage: Does a Payment-for-Outcomes Model Improve Indigenous Wellbeing? Published by Scholarship@Western, 2020 Table 2. Achievement of Whānau Outcomes by Māori-Led Commissioning Agencies, 2016-2017 Whānau Ora Outcome Indicators Te Pou Matakana Te Putahitanga o te Waipounamu Whānau are self- managing and empowered leaders 95% of priority whānau engaged through navigators identified their strengths, needs, aspirations 44% of priority Whānau engaged through navigators have completed at least some outcomes 100% whānau agreed or really agreed they are better able to make decisions about their future Whānau are leading healthy lifestyles 86% of whānau engaged with Whānau Direct achieved their health outcomes 84% of priority whānau who prioritised health but were not enrolled with doctor or up to date with immunisations now are 99% of whānau eat more fruit and/or vegetables 95% of whānau improved physical fitness as a result of programme Whānau are participating fully in society 57% of priority whānau who prioritised community participation are now in organized sport or recreation activities 49% of whānau are more actively engaged in their community Whānau and families are confidently participating in te ao Māori 2% of those engaged with Whānau Direct increased engagement in te ao Māori [Māori world] outcomes 100% increased knowledge and confidence in Māori culture and language Whānau and families are economically secure and successfully involved in wealth creation 41% engaged with Whānau Direct achieved standards of living outcomes 79% of priority whānau who prioritised financial literacy are now using a financial plan or budget to make decisions 33% had sufficient income for everyday needs (up from 21% in 2015/2016) 48% whānau working with navigators had gained formal qualifications (up from 31% in 2015/2016) Whānau are cohesive, resilient, and nurturing 70% of priority whānau who prioritised whanaungatanga [relationships, kinship, sense of belonging] and who identified domestic violence as a concern now report a reduction in domestic violence 13% of whānau met whānau knowledge outcomes 100% of whānau are more resilient and have more knowledge about tools to help then bounce back from tough times 100% whānau know more about their whakawhanaungatanga [relationships with others, genealogy] Whānau and families are responsible stewards of their living and natural environment 81% of whānau are more motivated to act as kaitiaki [guardians] of the wellbeing of their whenua [land] 100% whānau feel more connected to their whenua as a result of gardening Note. Sources: Te Puni Kōkiri (2018) and Independent Whānau Ora Review Panel (2018). 14 The International Indigenous Policy Journal, Vol. 11, Iss. 4 DOI:10.18584/iipj.2020.11.4.8195 Given such findings, the Independent Whānau Ora Review Panel (2018) reported: The Whānau Ora commissioning approach creates positive change for whānau. In all areas we visited, and across all monitoring reports we reviewed, we have seen whānau progress towards achieving their self-identified priorities. However, the approach is relatively new, and we believe it is too early to form a view as to whether or not that positive change will be enduring. (p. 6) This qualification is important given the Whānau Ora Outcomes Framework ratified in 2015 defined short-term (1-4 years), medium-term (5-10 years), and long-term (11-25 years) goals for whānau. Moreover, given the long-term impacts of colonization and institutional discrimination, it will inevitably take a generation or more to achieve all seven overarching Whānau Ora outcomes (Independent Whānau Ora Review Panel, 2018). Table 1 and 2 further highlight the difficulty in identifying any aggregate outcomes across Whānau Ora, either across the commissioning agencies or across time. The flexibility to develop any outcome measures, as long as they broadly fit within the Whānau Ora Outcomes Framework, also contributes to difficulties in attributing outcomes to Whānau Ora, particularly when factors outside the control of whānau or commissioning agencies can impact outcomes (Wehipeihana et al., 2016). These issues are common to all PfO contracting (Rees, 2014). Gardner et al.’s (2016) rapid review of the international literature on commissioning in health found: “There was very limited evidence to assess the impact of commissioning on service use, outcomes or value” (p. 43). Te Pūtahitanga o te Waipounamu suggests that such issues are enhanced when attempting innovative approaches: A lack of relevant academic literature and evaluation tools meant “it has been challenging to identify or develop relevant and appropriate indicators and measures for the social enterprise and social capital approaches” (cited in Wehipeihana et al., 2016, p. 57). In this sense, the innovation expected to emerge from Whānau Ora potentially made it harder for commissioning agencies to achieve performance payments. The Controller and Auditor-General (2019) reported that, out of a total of NZ$3.262 million in incentive payments dispersed between 2014 and 2017, Te Pou Matakana received 98% of incentive payments available to the agency (60% of all such payments) and Te Pūtahitanga o te Waipounamu received none in the first two financial years and then 29% of available payments in the third year. This is surprising given Table 2 often reports higher outcomes for Te Pūtahitanga o te Waipounamu than Te Pou Matakana. Of course, “success” in a PfO model is what commissioning agencies manage to negotiate as an outcome indicator, and it could be that Te Pūtahitanga o te Waipounamu was initially less agile in this space given its higher level of “innovation” and lesser experience in the social services sector. Such difficulties in reporting outcomes are problematic not only because financial incentives depend on proving impact but also because a lack of aggregate reporting across all three agencies has contributed to difficulties promoting and (at times defending) the Whānau Ora strategy (Independent Whānau Ora Review Panel, 2018). Many providers and partners also felt the outcome measures and reporting tools used by commissioning agencies do not sufficiently account for the work they do (for instance, building the relationships needed to start achieving outcomes) or the extent of effort or change experienced by whānau, while also being unnecessarily time-consuming (Independent Whānau Ora Review Panel, 2018). Some providers were also frustrated that Te Pou Matakana did not fund the administrative costs associated with delivering Te 15 Humpage: Does a Payment-for-Outcomes Model Improve Indigenous Wellbeing? Published by Scholarship@Western, 2020 Pou Matakana-funded services, for instance, the intensive case-management associated with the Whānau Direct programme that allows whānau to quickly access a small but significant cash amount (Boulton et al., 2018). Providers are thus expected to bear costs for the commissioning agencies just as they did when contracting with government via more routine procurement processes. The Independent Whānau Ora Review Panel (2018) also found that the significant, formal accountability regime focused primarily on process not outcomes. Roy et al. (2018) suggested that commissioning for outcomes often comes with increased oversight and administrative burden, something arguably magnified when Indigenous Peoples are involved: For instance, Te Pou Matakana was accused of despotism in 2018 because incentive payments for 2015 to 2016 and for 2016 to 2017 (worth NZ$634,000 and NZ$988,000, respectively) were paid out in the following years as dividends to Te Pou Matakana’s three shareholders, all of whom are registered charities (Bennett, 2018). The Controller and Auditor-General (2019) found no irregularities because this arrangement is characteristic of the PfO arrangement. More generally, Wehipeihana et al. (2016) reported that commissioning agencies “believe the current reporting expectations do not align with a commissioning model. They describe the reporting requirements as prescriptive and restrictive and not aligned with their view of commissioning which intends to be responsive and innovative” (p. 8). Boulton et al.’s (2018) participants also felt that Te Pou Matakana “was over-regulated in comparison to other government entities” (p. 51). Noting that the international literature highlights the need for trust and long-term relationships between commissioners and providers, Boulton et al. (2018) comment that commissioning for Whānau Ora outcomes requires a similar level of trust between the government and commissioners. Despite these problems and focusing on the positive outcomes gained, the Independent Whānau Ora Review Panel (2018) concluded that the government should invest in and extend the strategy based on evidence of short-term outcomes and potential for long-term sustainable outcomes. Moreover, it recommended embedding whānau-centred approaches into the Living Standards Framework, which was used to develop New Zealand’s first wellbeing budget in 2019, as well as other measures of wellbeing. While Whānau Ora did receive a funding boost and some other programmes focus on whānau, wellbeing is still largely understood either at the individual or national level. Adopting the Independent Whānau Ora Review Panel’s (2018) recommendation would see Indigenous-focused, collective outcomes become standard across government, although the wide diversity in outcome indicators already apparent across Whānau Ora Commissioning Agencies makes one wonder whether one would ever actually know when progress on Indigenous outcomes had been made. Social Impact Bonds The first SIB pilot’s focus on reducing welfare dependence and improving mental health outcomes was timely, given the Organization for Economic Cooperation and Development (OECD, 2018, para. 6) indicated that New Zealanders “with mental health issues are three times more likely to be unemployed. Mental health claims also make up around half of all social benefit claims” and “[t]he numbers of people with mental health conditions claiming benefits is gradually increasing.” Māori and Pasifika peoples account for nearly half of people with mental health disorders in New Zealand, helping to explain the urban location of South Auckland for the pilot, since many Māori and Pasifika peoples live there. 16 The International Indigenous Policy Journal, Vol. 11, Iss. 4 DOI:10.18584/iipj.2020.11.4.8195 The second pilot focuses on the same urban area but aims to reduce youth reoffending among clients in the 24-month period after enrolment. Performance payments are triggered only if Genesis Youth Trust (2017) reduces reoffending levels on average by at least 5% for clients in the first two years and by 10% on average for clients in the last three years, with bigger reductions resulting in larger payments. The pilot contributes to the National Party-led government’s desire to reduce the youth offending rate by 25%; this had already fallen by 38% between 2011 and 2015 (State Services Commission, 2015) before the bond was introduced, but the decline was not as significant for Māori (59% for 14-16-year-olds) as for European or Pākehā (74% for the same age group; Ministry of Justice, 2018). Clearly, such high rates of mental health, unemployment, and reoffending amongst Māori suggest some serious failings in the State policy, indicating why the government hoped “innovation” and improved outcomes would be achieved through SIBs. Innovation Although already implemented or under trial in a small number of countries, SIBs were new to New Zealand and touted as: An innovative form of contracting for social outcomes, where governments utilise private sector skills to drive innovation in service delivery while . . . shifting the financial risk and reward for service performance to investors [which] means a greater incentive for these groups to apply their resources and expertise to designing and managing services in ways that make a difference. (Office of the Minister of Finance & Office of the Minister for Social Development, 2016, p. 1) Little publicly available information makes assessing innovation tricky. However, the Office of the Minister of Finance and Office of the Minister of Social Development (2016) acknowledged that in the first trial the “degree of service innovation involved is relatively low” (p. 1), being similar to the Ministry of Social Development’s current Work-to-Wellness contracts. APM, the provider, was also heavily reliant on this ministry to refer most clients for assessment, work placement, support, and other specialized services. This lack of innovation is associated with a haphazard development process that took over four years. An independent evaluation said the pilot was “well-run” (Mules, 2016, p. 3), but the lead agency, the Ministry of Health, had little commercial financial expertise, creating a heavy focus on process diligence as opposed to achieving a successful process outcome—a finding similar to the Independent Whānau Ora Review Panel’s (2018) comments on Whānau Ora. There was also confusion about who was developing the SIB model since the Ministry of Health drew heavily on Treasury experts. In terms of implementation, the Ministry of Social Development led the first pilot and Oranga Tamariki (Ministry for Children) led the second. There is no evidence that Te Puni Kōkiri was ever involved in either pilot, despite Māori being likely targets. Further problems emerged from Cabinet direction to undertake a “market-led” programme asking participants to identify outcomes and target populations they wished to address (Mules, 2016). Eventually, seven proposals were evaluated, and four topics selected, with mental health and employment prioritized for the first pilot. But the planned provider–investor partnership for this first SIB unconditionally withdrew in mid-2016. As a result, the bond negotiated with APM ended up being “more simplified and [having a more] streamlined structure than was envisaged at the 17 Humpage: Does a Payment-for-Outcomes Model Improve Indigenous Wellbeing? Published by Scholarship@Western, 2020 commencement of the social bonds pilot programme” (Office of the Minister of Finance & Office of the Minister for Social Development, 2016, p. 1). Asking private sector organizations to define the “problem” to be solved acknowledged that providers working in the community often have a better understanding of the “problem” than government, something Indigenous Peoples have often argued. However, it also reflects a naivety about the realities of problem definition. Most providers and investors cannot access the kind of information governments have available, nor do most have sufficient resources to conduct detailed research prior to a proposal of interest. The second pilot was delayed because “development of a robust value proposition and associated outcome agreement . . . has been more involved than initially expected” (Office of the Minister of Finance & Office of the Minister for Social Development, 2016, p. 3). In fact, Genesis Youth Trust (2016) ended up negotiating a new national-level agreement with New Zealand Police to gain access to the data needed to measure its success and then analysing 2,350 youth offenders in Auckland between 2012 and 2015 to demonstrate that only half of its clients reoffended within 18 months, compared to nearly 80% of non-Genesis clients. Roy et al. (2018) have noted that most non-profit organizations do not have the financial skills or systems to manage and monitor investments, requiring valuable resources going to consultants, and there is some evidence that this is the case with Genesis Youth Trust (2018). In this context, the independent evaluation concluded, “Government should lead with the outcome areas in which it has interest in procuring a social bond” (Mules, 2016, p. 15). Despite these significant pre-pilot efforts, the level of innovation evident in the second pilot is limited. Police Youth Aid refers young people for an “enhanced intervention” that includes a validated psychological assessment using the Youth Level of Service-Case Management Inventory (YLS-CMI) to assess their risks, protective factors, and needs and generates key priority areas to focus the work of the social worker, mentor, and counsellor each young person and their family works with for 6 to 24 months. This holistic approach is, however, promoted more broadly in the Youth Crime Action Plan (State Services Commission, 2017). Aside from assisting youth offenders over longer periods than before, the key innovation is the YLS-CMI tool because “we are much more objective and rigorous in the way we assess clients at their time of entry and in the way we customise their intervention over the subsequent six months” (Genesis Youth Trust, 2018, p. 14). The tool itself, however, was developed in North America and adapted for Australia, where Genesis received training. It is unclear if and how the tool was adapted to the New Zealand context, particularly for Māori. Outcomes Both pilots have experienced difficulties achieving contracted outcomes, especially in attracting sufficient referrals and enrolments. Only 269 people were referred to APM between April 2017 and May 2018, with 112 enrolled (against a target of 340 per year) and only 36 were assisted into employment (Te Tautoko Nga Tangata, 2018). Between April 2017 and March 2018, only 21.9% of APM clients moved into work for the required number of months—anything below 60% of the target was considered non-performance. Slow enrolments were initially blamed on the limited time between providers signing the contract and the start of service delivery in order to attract sufficient staff but attempts to encourage more self-referrals were not successful. Results were so poor the programme was replaced by a Work to Wellness contract covering the social bond activity and an existing APM contract in in February 2019 (Moffat, 2018). 18 The International Indigenous Policy Journal, Vol. 11, Iss. 4 DOI:10.18584/iipj.2020.11.4.8195 Minutes from an APM Workcare and Te Tautoko Nga Tangata Ltd. Investor Advisory Group (2018) meeting suggest that APM was placing around 50% of clients into work by April 2018, above the expected rate of 43%, but the number choosing to enrol was only slightly higher than those declining (Moffat, 2018). This suggests many potential clients did not find the focus on employment appropriate or worthwhile; a lack of consultation with and information disseminated to health professionals, as well as the Association of Psychotherapists’ petition against this “experimental approach to mental-health funding” (RNZ, 2015, para. 2) may have added to enrolment problems (Brookes, 2015; Henrickson et al., 2015). It is likely that a lack of consultation with Māori experts about the best solutions for Māori young people also contributed to the pilot’s poor outcomes. The second pilot similarly had problems meeting enrolment targets, despite all referrals coming from New Zealand Police. This was again blamed on the time needed to find new staff, given the programme began only one month after approval was given. However, Genesis Youth Trust (2018) claimed that it was “well ahead of target in reducing client ‘recidivism risk factors’” with: 61 of 65 clients achieving a reduction in their YLS-CMI score at their 3-month assessment, and 34 of 36 clients . . . at their 6-month assessment. The vast majority of these reductions (79% and 92% respectively) were greater than 10%, with this achievement being well ahead of target. (p. 16) As a result, an additional incentive payment was paid, despite the enrolment shortfall. Overall, Genesis achieved a non-reoffending rate for bond clients of 67% between September 2017 and June 2018. Genesis annual reports indicate that, in 2016 to 2017, its non-reoffending rate was 58%, suggesting an improvement despite the higher-risk profiles of clients. Yet Genesis Youth Trusts’ (2017) non-reoffending rate peaked at 89% between 2007 and 2008 and was at least 71% in most years since 1999 with the exception of some significant fluctuations to much lower rates in 2014 to 2017. These fluctuations likely stem from a significant scaling back of operations due to lack of funding, but they do suggest considerable variation, making one year’s worth of statistics insufficient to assess the real success of the bond. This point reinforces Ross Philipson Consulting’s (2011) early evaluation of social bonds: There are very real difficulties in assessing what projects have the potential to deliver a net benefit for the government, and even greater difficulty in evaluating whether contracts are being successful or not (which is critical for determining the level of payment investors receive). (p. 1) The evaluation cited several studies from the United States where even outcome-based contracts, never mind social bond funding mechanisms, had failed to achieve expected outcomes. Indeed, by the time the first New Zealand pilot rolled out in 2017, two of the three international examples cited in Cabinet papers had been abolished before the contractual period ended for not meeting outcomes (Brookes, 2015). In this context, it would be extremely surprising if the New Zealand trials met all of the outcome indicators established. This is particularly the case for the first trial: The Ministry of Social Development’s (2016) Mental Health Employment Service was abandoned after it was found to achieve poor outcomes compared to ministry-delivered case management. This service aimed to achieve similar outcomes as the first SIB bond trial and similarly experimented with PfO but with performance 19 Humpage: Does a Payment-for-Outcomes Model Improve Indigenous Wellbeing? Published by Scholarship@Western, 2020 payments triggered at a lower rate of success. Given its demise, it is not surprising the first SIB could not meet the higher target set and was also abandoned in 2019. This is clearly the result of poor policy process because the government ignored strong warnings that New Zealand should not “engage in trials or implementation of a SIB” at least until it had a “better understanding of the New Zealand investor environment, especially the social lender and philanthropic sector” (Ross Philipson Consulting Ltd, 2011, p. 1; see also KPMG, 2013). Discussion and Policy Lessons This article has examined two policies demonstrating the New Zealand government’s belief that social services would be more innovative and achieve improved outcomes if driven by the financial incentive of PfO. Whether explicit or not, Indigenous Peoples were the key target of these policy experiments in which government ignored expert advice, ultimately leading to problems with implementation and achieving anticipated levels of innovation. Although the government’s willingness to ignore policy experts was more evident in the development of SIBs, overturning the original intentions that Whānau Ora should focus only on Māori and should offer high levels of self-determination to Māori through an independent trust were particularly significant for Indigenous Peoples. Arguably, the government’s desire to shift financial risk and accountability in social policy overrode its interest in improving Māori outcomes by drawing on local or international evidence of what works best for Indigenous Peoples. Nonetheless, and despite significant differences in their outcome measures, Whānau Ora Commissioning Agencies do appear to be improving Indigenous People’s lives, probably above and beyond what was achieved through the whānau-focus funded through traditional contracting processes between 2010 and 2014. They also demonstrate and encourage innovation. Yet many of the problems associated with mainstream funding models have been replicated and, as is common in other settler nation states (see Fontaine, 2016; Lavoie et al., 2010), providers were offered insufficient funding to solve the intergenerational problems associated with Indigenous Peoples that are shaped by broader structural contexts (such as colonization, employment, housing, and education). The success of SIBs in improving Indigenous outcomes is more uncertain; while the second pilot is making some headway in reducing youth reoffending and the holistic focus on young lives is encouraging, it is unclear how culturally appropriate the YLS-CMI tool is for Māori. The first pilot, meanwhile, failed in its attempts to assist unemployed people with mental health issues successfully into work; that a similar Ministry of Social Development service had equally poor outcomes suggests this basic goal was flawed in the first place. At a broader level, both cases indicate that the PfO model is no “silver bullet” for improving Indigenous wellbeing because it: • Requires a heavy focus on compliance and accountability reporting to ensure performance payments can be met. Yet, at the same time, these outcome measures are often insufficient to measure real change in complex Indigenous lives. • Commodifies Indigenous lives by framing their outcomes and wellbeing in terms of “data” that can be used to award performance payments or profit to commissioning agencies and 20 The International Indigenous Policy Journal, Vol. 11, Iss. 4 DOI:10.18584/iipj.2020.11.4.8195 SIB providers and investors (MacDonald, 2019). Not only is profit being made from Indigenous suffering but a significant and enhanced collection of data about Indigenous Peoples may be used for unknown purposes by government, creating issues of Indigenous data sovereignty (see Bruhn, 2014; Kukutai & Taylor, 2016). • Blurs responsibility for the wellbeing of citizens by devolving responsibility to non- government—and, in some cases, for-profit—actors, yet allowing them to walk away when outcomes are not achieved (Malcolmson, 2014). Ultimate responsibility for service recipients’ wellbeing lies with government; yet these intermediaries weaken the citizen– State relationship and the State–Māori relationship emerging from the Treaty of Waitangi, particularly Articles 1 and 2, which indicate that power should be shared. As indicated earlier, there is evidence that devolution of real power and funding makes a difference and—combined with a holistic, culturally appropriate, strengths-based approach—it is this that could significantly improve Indigenous lives. The Whānau Ora Commissioning Agencies start to go down this path, but do not go far enough. The independent trust that the Taskforce on Whānau-Centred Initiatives (2010) proposed would have been a more adequate first step but emerging models such as the Service Management Agreement negotiated in the Tūhoe settlement, in the long run, provide more opportunity for radical experiments. Any such devolution of power and funding needs to be Indigenous- led, well-planned and implemented, devoid of political interference, and to de-commodify Indigenous Peoples and cultures. Only then will it be more successful than the two PfO examples discussed here. References 1NewsNow. (2014, January 24). Peters wins no friends calling Maori policies apartheid. 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