Want some positive news?
Tuesday, April 16, 2013 at 10:00AM 
Disadvantaged families can save the government money
I was abused by my own mother. She was abused by hers. I want it to stop now. I don’t want my children to go through this.
Her concern was not what happened to her. She was terrified of treating her own daughter the same way. It’s why she came to the Newpin centre.
Newpin is a voluntary therapeutic community where struggling young mothers and fathers spend as many as four days a week for up to two years.
They commit because they are troubled parents responsible for raising human beings. Despite often desperate histories of intergenerational dysfunction, they want to get it right.
Does it work?
Yes. Children have often been removed, or are about to be. Yet, a year into this simple, practical programme, up to 70% of families have been restored to such a level of dignity that the Children’s Court agrees the family should reunite.
What’s the problem?
Newpin is expensive. It’s not a casualty ward for troubled families. It’s the intensive care unit. Each centre costs about $500,000 a year to run. Nor is it a trendy charity. It happens at the coalface of disadvantaged suburbs, not at the Opera House. There are plenty of supporters, but not enough.
Governments recognize the need but are reluctant to fund it. That’s not politics. Most governments are deeply in debt. Right now, they want to save money, not spend it. Reducing debt will probably drive budget agendas for the rest of this decade. You won’t get much of a hearing asking for money. You will get their attention, however, if you offer to save them some. That’s what these families did.
Outcomes have value
Newpin’s strength is results. Studies show participating families to be less dependent on welfare. They are more likely to be employed and their children are less likely to enter the juvenile justice system. There’s a lot of savings just there. But that’s all in the future.
Right now it can cost up to $40,000 to keep a child in out-of-home-care. There are caseworker expenses, carer payments and other outgoings. The government starts saving that money the day a child is safely restored to its family.
Each Newpin centre restores enough children to save the government over $500,000 each year. Same again the following year, plus another $500,000 for next year’s graduates. That’s $1.5m after three years. It rises arithmetically. After seven years, savings are $3m per year, but it is still only costing around $500,00 to run the centre and cumulative savings have climbed to around $10m.
That got everyone’s attention.
The good news is….
It took nearly three years to structure and negotiate, but this week we launched the Newpin Social Benefit Bond. It will raise $7 million to run 10 centres.
After seven years, the government will apply a small part of its savings to pay back the bondholders. In the meantime, they’ll receive an annual interest payment. The government keeps the rest.
Best of all, hundreds of at-risk children and troubled families get the chance to be the family that they want to be. Along the way, they will save the government and the community tens of millions of dollars and eventually put in place a social service that will be self-sustaining.
You wanted some positive news. How good is that?
Newpin is a not-for-profit programme run by Uniting Care. Alan Hargreaves is Chairman of the Newpin Advisory Group. The Newpin Bond is managed by Social Ventures Australia. For a detailed brochure, click here. To read a report in the Australian Financial Review, click here.
Reader Comments (4)
This is great. You could apply this idea to a lot of issues.
A similar thing has been tried in the UK. The aim is to curb adolescent recidivism and pay for the programme by saving the cost of keeping teenagers in juvenile detention centres.
Interesting isn't it? Get the service out of the government's hands and suddenly everyone saves money and we get a better result.
That might be true but the government has been carrying doing the job until this idea came up. And it's still a proposal. We need to see if it works first.