Financing of Services

1
Financing of Services Reporting back from
Breakout Session 3
2
Financing of Services Breakout Session 3

• Focus
• How to redirect resources from residential to
  alternative care?
• How to cost such reforms?

• Objectives
• To better understand financing systems,
  approaches, tools
• To define practical lessons and obstacles for
  from three concrete country cases Georgia,
  Ukraine, Serbia
• To suggest ways to address obstacles and
  formulate issues for winder /plenary discussion

• Approach
• Tried to look for systemic barriers, not cosmetic
  problems
• Tried to be open and critical
• Tried to brainstorm, but more questions than time

3
Points of strongest resonance with the group
Ms. Gordana Matkovic, Director of Social policy
Studies / Centre for Liberal Democratic Studies,
Serbia

• Structure of major reforms how to redirect
  resources from residential to family-based what
  are transaction costs and how to cover them?
• Importance of keeping institutions on board.
• We need diversified menu of high quality
  services, not only alternative services
• Residential providers big employers, political
  players, valuable assets
• Ideas 1-year moratorium on taking new staff
  fixing capital investment trade good buildings
  with other sectors re-employ qualified staff
  motivate teachers take new roles (example with
  caring for children over summer)
• Allocating roles between levels of government
• Reform mandates at single level (e.g. national)
• Co-funding from different layers
• Intergovernmental transfers to fund services
  block of earmarked?

4
Points of strongest resonance with the group
Mr. George Kakachia, Head of the Child Care and
Social Programs Unit, MoLHSA, Georgia

• Rich background on social welfare systemic
  context for Georgia
• New system of vouchers for child care services,
  which raised a lot of interest and questions
• Vouchers a payment mechanism as a pragmatic
  solution of procurement problems or a new
  approach to service commissioning?
• Does a new system improve flexibility of choice?
• Issues of predictability of funding and therefore
  risks for viability of some services
• How wide is the coverage of services? (at the
  moment in Georgia, not too wide)
• Window of opportunities to develop a strategic
  and prioritised policy/plan (i.e. which services
  should be expanded which regions should be
  covered).

5
Points of strongest resonance with the group
Ms. Halyna Postoliuk, Director of Hope and Homes
for Children, Ukraine

• An example of convincing cost-benefit analysis
• How a rayon-level pilot can uncover system-wide
  problems and lessons
• The only way to fund new services through a
  temporary, diminishing and manually distributed
  subvention
• Strong financial incentives for residential
  provision in the current formula of
  intergovernmental transfers
• Strong administrative incentives against change
  provision dominated by vertical administrative
  mandates of sector ministires very difficult for
  prevention and innovative services
• Continued confusion in distribution of
  responsibilities across levels of government
• Key task to introduce complex institutional
  reforms for social commissioning of services for
  children.

6
Points of strongest resonance with the group
Ms. Elena Andreeva, Academic director, Center
for Fiscal Policy, Russia

• Costing of policies versus costing of services
• Well-costed policies as strong arguments to lobby
  for reforms, including negotiations with
  financial authorities
• Forecasts and costing should help to make
  choices, not literally describe the details of
  future outcomes
• Country cases show how costing policies
  illustrates significant benefits of re-allocation
  of funds towards family-based care (including
  such indirect channels as improved productivity)
  and justifies investment in the short-run.

7
Open issues for further / wider discussion

• The problem of ambiguous concepts which require
  further clarification (e.g. Money Follows the
  Child).
• Decentralisation Where in the ladder of
  decentralised government we should locate the
  point of policy-making? National? Regional?
  Local?
• Intergovernmental transfers to fund services
  earmarked or block is there a scope for
  democracy to work for social welfare at the
  local level?
• How to incorporate political economy? (e.g. align
  reforms with local election cycles, so that
  governors do not oppose hard choices match child
  care reforms with other factors such as poverty
  reduction strategies etc).