Aide-mémoire
Meeting
Date:
4 June 2021
Security Level: IN CONFIDENCE
For:
Hon Carmel Sepuloni, Minister for Social Development and
Employment
File Reference: REP/21/6/586
Draft Cabinet paper: Improving the provision of
emergency housing in Rotorua and potential
expansion
Purpose
On 3 June 2021 you received a draft Cabinet paper on improving
the provision of emergency housing in Rotorua and potential
expansion for feedback from the Ministry of Housing and Urban
Development (HUD)[BRF20/21060987 refers].
This aide-mémoire provides you with advice as to the implications
of the proposal for MSD.
Background
We have previously provided you with advice on proposed actions
to address urgent issues around homelessness and emergency
housing in Rotorua. This advice also outlined the actions that MSD
is taking to support addressing issues with emergency housing in
Rotorua [REP/21/4/417 refers].
The draft Cabinet paper outlines a proposal to implement the
recommendation of the Rotorua Housing Taskforce1 to support for
the 200 families with children who are currently living in
emergency housing motels in Rotorua.
Ministers have agreed that to a number of changes to meet
urgent housing need in Rotorua. The paper seeks agreement to:
- an approach to fund the costs of contracting suitable
motels and providing ‘wrap-around’ support for around 200
families and whānau with children currently receiving
Emergency Housing-Special Needs Grants (EH-SNGs) in
motels in Rotorua
1 The Rotorua Housing Taskforce was established in March 2021 comprising the Rotorua Lakes Council,
Te Arawa iwi and officials from MSD, HUD, Kāinga Ora and Te Puni Kökiri. The New Zealand Police
and the Lakes District Health Board are also participating.
The Aurora Centre, 56 The Terrace, PO Box 1556, Wellington – Telephone 04-916 3300 – Facsimile 04-918 0099
- begin engagement on expanding the Rotorua model to
recommended locations subject to future agreement by
Cabinet.
The draft Cabinet paper has been prepared by HUD with input
from MSD.
The proposed
The proposed Rotorua approach is based on a contracting model.
approach
HUD will contract specific motels to provide emergency
accommodation, with an initial focus on the approximately 200
families with children in EH-SNG motels.
HUD will also contract additional wrap-around support services to
meet the needs of the families in the contracted motels. MSD is
also improving supports available for those remaining in EH-SNG
motels (i.e. people without children).
Emergency Housing clients in contracted models will no longer
receive EH-SNG, with the cost of accommodation covered by the
contract between HUD and the motel. They will however still be
required to pay the contribution of 25% of their income. This will
be paid to the service provider.
The Rotorua Housing Hub will be implemented to strengthen
assessment and placement processes for emergency housing
clients and co-locate relevant services.
The approach in Rotorua also includes near-to-medium-term
supply solutions with Kāinga Ora purchasing and converting
accommodation for transitional housing; scaling up work to
identify new-build opportunities; and HUD exploring legislative
solutions to fast-track temporary housing on reserves land.
Some policy
We have been working closely with HUD to develop the proposals
and operational to improve emergency housing provision in Rotorua. However,
settings are not there are several policy and operational settings yet to be
yet determined determined that require further work.
MSD have some HUD has recommended funding the contracting of motel places
reservations
for emergency housing through a transfer from the
about the
Accommodation Assistance Appropriation (the BoRE appropriation
proposed
containing EH-SNG funding) to a new dedicated appropriation,
funding option
and reprioritising funding from existing baselines, potentially
utilising the underspend in rent arrears assistance within the
Housing Support Assistances MCA. s 9(2)(f)(iv)
As noted in the paper, we have informed HUD that we consider
that this approach will not be fiscal y neutral. Some of the motel
places that will be freed-up as a result of people with children
moving into newly contracted motels will be filled by unmet
demand in Rotorua, therefore diminishing any potential reduction
in EH-SNG spend. We advise removing reference to the possibility
of fiscal neutrality from the paper.
2
It is unusual for funding to be reallocated from a BoRE
appropriation. BoRE appropriations are not intended to be used as
a funding source from a fiscal management perspective.
HUD indicated some funding could be reallocated from the
Housing Support Assistance MCA capital category – i.e. the
underspend in rent arrears assistance. This is problematic as it
will involve a complicated non-departmental capital to operating
swap. The capital funding for rent arrears assistance is repayable
by clients with no impact on operating allowances or Crown debt
and the proposed approach would have a fiscal impact as the
funding would be directed towards an activity which is not
repayable to the Crown.
s 9(2)(f)(iv)
MSD is likely to There are likely to be further costs for MSD in implementing the
incur additional proposals in Rotorua. These would include IT and administrative
costs
costs to enable us to capture and report on clients in these
contracted emergency housing motels.
Expanding the approach to new locations will mean additional
pressure on MSD contract administration resources. MSD
currently provides contract administration on behalf of HUD.
Evaluation
There is currently no discussion of costs relating to evaluation.
costs have not
Given the intention to expand this model into additional locations,
been included
we have recommended HUD include evaluation costs as part of
the proposal. We see evaluation as essential in building a
outcomes-based body of evidence and to support continued
improvements to practice on the ground.
We have
The paper refers to MSD providing limited supports to those
identified some receiving an EH-SNG. s 9(2)(g)(i)
further risks to
MSD and the
MSD services are targeted at the priority groups identified
Crown
as part of the original settings. The original funding was approved
as part of the Aotearoa New Zealand Homelessness Action Plan.
Since this time, the growth in the number of EH-SNG clients has
meant that not all clients area able to access the most intensive
service. s 9(2)(g)(i)
s 9(2)(g)(i)
We will work with HUD
3
to ensure equitable treatment of clients in both contracted and
non-contracted emergency housing.
Next steps
We will work with HUD to resolve the remaining issues in the
paper in relation to EH-SNGs and other MSD services and
supports before the paper is lodged.
Author: s9(2)(a)
Responsible manager: Alex McKenzie, Policy Manager, Housing Policy
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