Te Hurihanga – Examining the Costs

An article by Frank    No Comments

The government is set to scrap Te Hurihanga (The Turning Point), a programme aimed at reforming our worst young male offenders aged 14-17yrs. The programme was launched in 2007 and has so far cost $5 million to establish and run since then.

Te Hurihanga is a bicultural programme and Former Youth Court Judge Carolyn Henwood who developed the programme has said that nothing else like it exists in the world. This is new and thus, the establishment and implementation costs have been high. Its establishment was supported by the country’s Youth Court judges, Sir Stephen Tindall and the late Maori Queen Te Atairangikaahu.

Since its establishment, 23 students have entered the programme, 8 have graduated and 10 are currently working their way through it. 6 of those still in the programme are currently in the residence and four are in the final stages back home with their families.

Based on the number of graduates, our Justice Minister, Simon Power, has evaluated the cost of each graduate at $630,000 (5,000,000 broken into 8 gives us 625,000). Understandably, much of the public has reacted with the view that this cost is excessive. I think the figures need a slightly better overview though.

Te Hurihanga boasts a 100% success rate in that none of the youth who have graduated from the programme have reoffended since graduation. To be fair, that doesn’t take into account the few entrants that absconded early in programme.

In the 2008/2009 year the average annual cost for keeping someone in prison was $90,977. From what I am aware, that doesn’t take into account the legal costs outlaid by the state to place them there. With that figure it would only take 7 years in prison for an offender to equal the cost that the Justice Minister puts forward for each graduate of Te Hurihanga.

If each graduate was on a path to repeat reoffending then if they were to spend 10 years in prison across their life the saving gained by Te Hurihanga is $279,770 (10 x 90,977 – 630,000 = 279,770). That doesn’t take into account the legal costs that would lead to placing them in prison, the various other expenses often associated with various offences, the emotional, mental and spiritual costs to various victims, their families and the families of the offenders and also the lost input to society from the offender had they been reformed early. The saving to the tax-payer in the long term is obvious, but there is more to take into account.

The figure quoted by the Minister ($5,000,000) takes into account establishment costs of which the facility itself cost $1.4 million. No new programme using the same facility will have to absorb that cost in the future.

The pilot programme is due to finish in March. It was due to receive another $590,000 in funding for the coming year, taking the total funding to $5,590,000. If we estimated that 3 of the current students in the final phase of the programme graduated, that would take the total number of graduates to 11 and the cost per graduate with the total funding to $508,181 – already over $100,000 less than the current total per graduate. Let’s then assume that the following year would produce another 3 graduates (conservatively) with another $590,000 funding and the cost per graduate goes to $441,428, another significant reduction. At that cost, the saving against a re-offender serving 10 years in prison is $468,342 (not taking into account legal costs and other offence related costs).

Can you see the trend?

As time goes on, the establishment costs factor less into the total cost per graduate and as the capacity of the programme and its effectiveness from learning and getting better grows, so does the value for money. With this in mind, the Justice Minister is somewhat misleading the public about the cost of the programme. What the government would have to absorb in terms of cost decreases over time and if the other option is the tax-payer covering prison, then this cost is more effective.

To use an example to drive the point home – I am a commuter cyclist. I purchased my bike second-hand for $300. In the first week I travelled 80km across the week. That puts the bike at a cost of $3.75 per km, which is not very cost effective at all and upon that evaluation, any sane person would call it waste of money. I purchased it last year. This year alone, since starting back at work, I have travelled 192km. Not counting anything of the few months of commuting I did last year but still using the original purchase figure, that puts the cost of the bike at $1.56 per km. That’s a healthy reduction and the cost per km will continue to reduce across the year.

The same principle should work with good businesses over time. Most businesses don’t project making a healthy profit for some time, because the establishment and growth costs wipe out any profit for the first while, yet this government (which should understand these things very well) don’t seem willing to apply that understanding and principle to Te Hurihanga – why is that?

Our Social Development Minister, Paula Bennett, says that tenders will be taken for the use of the facility to run a similar but more cost effective programme that better aligns with the current government’s values. The establishment costs of any new programme will be cheaper as the facility and bones of a programme are already in place, so immediately the government should be able to point to better figures and tout whatever programme they put in place as more successful.

If the same results can be achieved more cost effectively then great, more power to all involved – but why the need to not explain the figures properly and why the belief that another new, untested programme will do better? Surely Te Hurihanga should have been given at least another 2 years to prove itself and to better evaluate the figures beyond the establishment and initial growth costs.

Other conversations about this:

Red Alert – Labour Party Blog

NZ Conservative