Globally, social and public sectors are grappling with the challenge of how to deliver better outcomes for citizens in the face of diminishing resources. Increasing demand for services, shifting population demographics, as well as both short term and long-term funding constraints are all forcing the social and public sectors to re-think their approach to service delivery. In an effort to do more with less, five coinciding and interrelated global trends are emerging that we expect will re-shape social services here in Australia over the coming years. Service integration Individuals with complex social needs often rely on the services of multiple government agencies. These agencies, however, typically operate in discrete silos, which makes data sharing and co-ordination difficult, if not impossible. It is well recognised that this siloed approach to service delivery not only results in the duplication of effort, but also delivers reduced outcomes due to a lack of coordination in responses. As a result, governments are now seeking to break down these agency ‘silos’ in order to deliver more cost-effective and targeted responses for their citizens and achieve better outcomes. Partnerships and strategic commissioning In addition to service integration, the public sector is also increasingly partnering with the social sector to harness the power of competition and innovation. This reflects the evolving role of government from simply a short term purchaser of social services to a long term manager and strategic commissioner of outcomes. Rather than establishing partnership arrangements based merely on short term outputs, government agencies are increasingly focused on developing service delivery models geared towards long term outcomes. This shift in focus is seeing the emergence of more sophisticated procurement processes and partnering arrangements. As this shift continues here in Australia, and more service delivery responsibilities are handed over to the social sector, the capability and capacity to design, implement and manage these new partnering arrangements for both parties will become more and more important. New financing models The shift towards partnering is also spurring the development of innovative new financing models such as Payment by Outcomes (PbOs) and Social Impact Bonds (SIBs). PbO’s link payment to delivery of outcomes so a share of the risk is transferred to the service provider. ‘Social Impact Bonds’ (SOIs) allow governments to transfer both the cost and risk of implementing initiatives from taxpayers to private investors. From our experience, for these results-based funding models to be successful, outcomes and measures need to be clearly defined, and timescales need to be realistically set. While still in their nascent stages, with the recent announcement by the Australian Government of a 10 year trial for SIBs, these new funding models are likely to start gaining greater momentum here in Australia. Technology as an enabler Digital technology is also transforming social services, particularly in the area of health and social care. An example of this is technology-enabled care (TEC), which involves the convergence of health technology, digital media and mobile devices. It provides patients, healthcare professionals and carers with better access to healthcare data, which in turn leads to reduced costs, improved access and better outcomes. TEC offers cost-effective solutions at a time when the demands on health and social services here in Australia continue to rise. And with the likely continued proliferation of ‘sensing’ wearable devices and health apps, we believe TEC will play a more central role in our health and social care systems of the future. Advanced analytics & behavioural economics The fusion of technology-enabled care with advanced analytics and behavioural economics also has the potential to dramatically reshape the way service providers engage with individuals and influence their behaviours. This trend is particularly pertinent to matters of public health, where a significant percentage of health costs arise from preventable conditions, and where early intervention can be enormously beneficial, both in terms of costs and outcomes. For example, it’s now possible for health providers to monitor diabetic patients’ glucose levels in real time and use behavioural science-based interventions, or “nudges”, to help them better adhere to their treatment plans. This kind of nudge thinking offers many opportunities for governments and service providers to improve outcomes across various social needs with minimal expense. While each of these five global trends pose certain challenges for both the public and social sector, they also offer huge potential and opportunity for both sectors to deliver better outcomes for vulnerable communities. Deloitte’s Social Impact Consulting practice is experienced in helping our public and social sector clients take advantage of each of these trend’s full potential to achieve better social outcomes and reduce the strain increasingly scarce public resources. For more information the future of social services here in Australia, please contact Tharani Jegatheeswaran (Partner- Social Impact Consulting) or Vivian Stephens (Senior Consultant – Social Impact Consulting).