Improving the sustainability of Disability Support Services, Cabinet Paper summary

Proposal

The Cabinet Paper:

• updates Cabinet on what the reviewers said about what should be done right now to manage increasing pressure being put on the Disability Support Services budget (the money used to provide DSS);
• asks Cabinet to agree to transfer DSS from Ministry of Disabled People – Whaikaha (MoDP) to a new branded business unit in the Ministry of Social Development (MSD);
• asks Cabinet to agree to create MoDP as a new standalone public service department, responsible for:
  • leadership across government and helping society change;
  • strategic policy;
  • system level monitoring;
  • disability information and advice;
  • managing government relationships with disabled people;
• seeks agreement to a list of tasks to be completed by a taskforce of people from different government agencies, that will work together at MSD.

Executive Summary

On 29 April 2024, Cabinet agreed to start an independent review to provide advice on DSS administered by MoDP (Cabinet paper, 29 April 2024 | Whaikaha – Ministry of Disabled People) focused on two questions:

• right now to manage increasing pressure being put on the DSS budget (the money used to provide DSS) (phase one);
• to make sure DSS can keep being paid in the future (phase two).

The review panel has now provided their report on phase one with six findings and seven recommendations.

In response, I, (the Minister of Disability Issues), seek Cabinet’s agreement to start work on the review’s recommendations and replace phase two of the independent review with a three-stage approach.

I also seek Cabinet’s agreement to transfer DSS, and the things that MoDP do to help it deliver DSS, to MSD.

All three stages will begin right now (with Stage One progressed quickly) and be resourced through the money agencies already have to run their organisations:

• Stage One will focus on recommendations 1 to 3 (expected to be actioned by September 2024),
• Stage Two will focus on recommendations 5 and 6 (expected to take decisions by November 2024), and
• Stage Three will focus on recommendations 4 and 7 (expected to take decisions by November 2024).

This work will be done by two groups:

• a team of senior officials to provide advice and ensure the implementation of the recommendations, and
• a Ministerial Leadership Group to provide oversight of this work given the support and resources required across the public service.

To do these recommendations, I intend to reallocate the system transformation funding of $15.6m in 2024/25 to resource the three stages. This will let MoDP focus on doing the panel’s recommendations and do critical system updating work.

I also intend to publicly release the full findings of the panel’s report and announce our response in a press release the week of 22 July 2024.

Recommendations

The Minister for Disability Issues recommends that Cabinet:

1. note the independent review panel providing advice on Disability Support Services (DSS) administered by the Ministry for Disabled People – Whaikaha (MoDP) has submitted its phase one report, articulating six key findings and seven recommendations;
2. agree not to progress with phase two of the independent review;
3. agree to replace phase two of the independent review with a three-stage approach beginning immediately:
   1. Stage One will focus on recommendations 1, 2, 3 and 7 (with some aspects coming into effect immediately and the remainder expected to be actioned by 30 September 2024)
   2. Stage Two will focus on recommendations 5-6 (expected to take decisions by the end of 2024)
   3. Stage Three will focus on recommendation 4 (expected to take decisions by the end of 2024)
4. note the Minister for Disability Issues will establish a taskforce within the Ministry of Social Development (MSD), consisting of senior officials from select agencies, to ensure the implementation of the recommendations;
5. agree to transfer Disability Support Services (DSS) and related functions from MoDP to MSD as a branded business unit, including:
   1. core DSS functions currently delivered by the Commissioning, Design and Delivery group within MoDP; and
   2. policy and quality assurance functions relating to DSS services and other supporting functions;
6. note transferring DSS to MSD will severely limit MSD’s ability to take on new responsibilities for the foreseeable future;
7. [redacted content]
8. note thatthe Chief Executive of MSD will be accountable to the Minister for Disability Issues for the policy and delivery of DSS, the management of the associated appropriation, and implementation of the reviews findings and recommendations;
9. agree to establish the MoDP as a standalone public service department (the new department) before the end of the year, replacing the current departmental agency, with responsibility for leading and influencing policy as it pertains to disabled people, monitoring the effectiveness of government services for the disability community, and assisting the government to engage and manage its relationships with the community;
10. agree that the functions of the new department will include:
    1. System leadership and facilitating societal change – provide coherent system-level leadership and stewardship that aligns priorities and focus across government. This includes accessibility, the New Zealand Sign Language Board, the New Zealand Disability Strategy, and compliance with the UN Convention on the Rights with Persons with Disabilities;
    2. Strategic policy – provide strategic policy advice on matters affecting disabled people such as education, health, employment, transport and housing;
    3. System level monitoring – evaluate and monitor progress and outcomes for disabled people against key government goals;
    4. Disability information and advice – provide an integrated source of government information for disabled people including the coordination of alternate formats;
    5. Manage government relationships with disabled people – support other government organisations to connect with the diverse needs of disabled people;
11. note that, subject to undertaking consultation with impacted staff, the Chief Executive of MoDP intends to transfer existing MoDP staff to MSD or the new department, as appropriate, under the Public Service Act 2020;
12. invite the Minister for the Public Service to issue drafting instructions to the Parliamentary Counsel Office for Orders in Council to:
    1. establish MoDP as a standalone public service department by adding it to Part 1 of Schedule 2 of the Public Service Act 2020 and Part 1 of Schedule 1 of the Ombudsmen Act 1975;
    2. disestablish MoDP as a departmental agency by removing it from Part 2 of Schedule 2 of the Public Service Act 2020 and Part 1A of Schedule 1 of the Ombudsmen Act 1975; and
    3. provide for any transitional matters connected with the transfer of functions as necessary;
13. agree that formal communication of the decision to create MoDP as a standalone public service department, its expected establishment date and its role and functions, and the decision to transfer DSS to MSD can commence prior to the making of the Orders in Council;
14. note that the Chief Executives of MSD and MoDP (departmental agency), and the Chief Executive of the new department (once appointed), will work to implement the transition to the new arrangements for DSS and MoDP, including transfers of staff and other contracts currently held by MoDP and the continuation of shared services arrangements;
15. note that the decision to establish MoDP as a public service department will create an impending vacancy in the Chief Executive role for the new department, and the Minister for the Public Service will return to the Cabinet Appointments and Honours Committee to seek agreement to a position description for the substantive Chief Executive role, following consultation on priorities with the Minister for Disability Issues;
16. note that the Public Service Commissioner will undertake an appropriate process for chief executive arrangements for the new department, including any acting arrangements necessary through the transition and the option to fill the substantive chief executive role using chief executive transfer provisions under the Public Service Act 2020, in consultation with the Minister for Disability Issues;
17. authorise the Minister for Disability Issues and the Minister of Finance jointly to approve any changes to operating and baselines necessary to enable the establishment of MoDP as a standalone public service department and to transfer DSS and related functions to MSD, including establishing a new Vote and new appropriations (and categories) as necessary;
18. agree to the transfers of funding and baseline changes authorised by the Minister for Disability Issues and the Minister of Finance jointly are fiscally neutral;
19. note that the multi-category appropriation “Supporting tāngata whaikaha Māori and disabled people” will remain in place within Vote Social Development to fund the delivery of DSS, with some funding transferred to the new Vote Disability for the new department, with the breakdown to be determined;
20. note that the Ministry of Disabled People (departmental agency) had funding approved through Budget 2022, (drawn down in 2023) to support the national roll-out of the Enabling Good Lives (EGL) approach, with $15.6 million in 2024/25, increasing to $40.5 million from 2027/28 onwards;
21. agree to pause work on the national roll-out of the EGL approach until work on the three stages has been completed;
22. agree to move the funding originally allocated for the national roll-out of the EGL approach in 2024/25 into a new category in the multi-category appropriation (MCA) to support the sustainability of DSS; 
23. agree toadd the following category to the MCA “Supporting tāngata whaikaha Māori and disabled people”:
    • Title: Sustainability of Disability Support Services
    • Type: Departmental Output Expense
    • Scope: This category is limited to activities supporting the sustainability of Disability Support Services
24. agree that expenses associated with the new category will be met in a fiscally neutral manner from within the existing amount of the MCA;
25. approve the following indicative spending profiles for the new category and changes to indicative spending profiles for existing categories, with no corresponding impacts on the operating balance and net debt:
    Vote: Social Development, $m – increase/(decrease).
    Minister for Disability Issues.
    Multi-category Expenses and Capital Expenditure: Supporting tāngata whaikaha Māori and disabled people MCA
    • Departmental Output Expense:
      Connecting people with supports and communities (funded by revenue Crown): 2024/25: 2.770;
      Stewardship of the Disability system (funded by revenue Crown): 2024/25: 6.800;
      Community Capacity and Support: 2024/25: 2.000.
    • Non-Departmental Other Expense:
      Community Capacity and Support: 2024/25: 2.000.
    • Non-Departmental Output Expense:
      Community-based support services: 2024/25: 1.830;
      Connecting and strengthening disability communities: 2024/25: 2.200.
26. agree that the new category be included in the 2024/25 Supplementary Estimates and that, in the interim, expenses may be incurred against it under Imprest Supply;
27. note that joint Ministers approval will be required for any transfers between this and other categories until future transfer restrictions are agreed;
28. note the Minister for Disability Issues will update Cabinet on progress, and will seek required Cabinet decisions on any outstanding issues by the end of 2024.