Challenges in Changing Financing Structures

18.11.12

Changing systems always costs money.  Because of this, governments are reluctant to make changes they feel they cannot afford. At a time of global financial crisis it is even more difficult to convince government to invest in what seem like experimental ideas.  Often, services required in the community to support vulnerable children and families are cut to save money, at the very time these services are needed most.

One of the greatest challenges to financing change is that those responsible for managing change on a massive scale, lack the tools to estimate how much money will be needed.  Costs can be over-estimated, making governments reluctant to agree, or under-estimated, resulting in partial implementation of change, as a result of which some children miss out.

Moving from a system of large institutions to community based services requires significant investment in new infrastructure.  Even if old buildings can be sold to pay for some of the new services, capital investment is needed up front to build new small group homes, day centres and to adapt schools to make them inclusive. External donors often place limitations on the way in which their funds may be used.  Some donors will not fund infrastructure, but only human resources.  Whilst other donors might fund infrastructure, but will not cover costs involved in managing change.

Few Ministries of Finance become actively involved in the planning and implementation of changing services for children and families.  Often the mechanisms of financing services are rigid and need to be altered in order to sustain new services.  For example, in many countries, institutions are funded from the central State budget, whilst community support services must be funded by the local authority's own budget.  There is therefore no incentive for local authorities to support children to stay in their families, whilst it is financially advantageous to them to send children away to centrally funded institutions.  Many countries find it challenging to develop mechanisms to transfer resources from institutions to community based services.

At a time of global financial crisis it is difficult to convince governments to invest in change. Often, services required in the community to support vulnerable children and families are cut to save money, at the very time these services are needed most.

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