Tough times see charities facing layoffs
Mental Health Foundation to cut 18% of workforce
The Mental Health Foundation has confirmed it is looking to lay off almost one in five of its staff.
The foundation is one of a number of charities which Stuff understands are assessing their operations and preparing to make cuts, given they rely on Government funding which is becoming increasingly hard to access.
The foundation, which relies on donations and government contracts, says funding it gets from the Ministry of Health has not kept up with rising costs “over a number of years”.
As first reported on Stuff’s Newsable podcast, the Mental Health Foundation was looking to disestablish 10 roles from its workforce of 56 people – that’s 18% of its staff being laid off.
Foundation chief executive Shaun Robinson said their government contracts had not been cut, but they had not kept pace with inflation – or increased to make up for lower donations due to the recession.
“Our government-funded contracts have not kept pace with rising costs over a number of years.
Alongside this we are facing a decrease in fundraising revenue owing to record inflation and a recession. Around 50% of our income relates to government contracts,” Robinson said.
Other charities prepare for cuts
Stuff has also heard from social service NGOs who were concerned about potentially needing to downsize.
Multiple charities working in the areas of child protection and community health have said ministries were looking to cut funding in contract negotiations. Workers at the charities spoke on condition of anonymity, as negotiations were under way and speaking publicly could lead to financial ramifications.
One executive, whose charity provides alcohol counselling, domestic abuse services, food banks, elder support and housing, said government departments were trying to pass on the 6.5% to 7.5% cuts which the Government had ordered as part of its cost cutting directive.
Oranga Tamariki has confirmed it was delivering savings through “contracted spend”.
Stuff asked Oranga Tamariki boss Chappie Te Kani if the ministry was looking to cut contracts with community providers.
In a statement, he replied: “Oranga Tamariki is committed to supporting the Government’s priorities and the savings exercise, which requires the agency to reduce spending by 6.5%.”
He said “the safety of children” remained a priority, and the ministry would be speaking with “partners and providers” later in the year about changes to funding.
Other ministries, including Whaikaha/ Ministry of Disables People, have also signalled to providers that money would be tight.
Last month, the ministry wrote to its providers to warn that “cost pressure” would mean they’d need to restrict modifications and procurement of items such as wheelchairs.
Government response
Prime Minister Christopher Luxon previously said the Government wanted to fund more community-based services, and increasing funding to charities and the social sector.
Finance Minister Nicola Willis said “front-line” services should not have funding reduced as part of the savings directive, instructing departments to cut either 6.5% or 7.5% of their costs.
She said front line services at Whaikaha and Oranga Tamariki, as well as police, health and education, would get a funding increase in this year’s Budget – set to be delivered at the end of next month.
Full story on Newsable, Stuff’s news podcast that wraps up what’s worth talking about in a short package on weekday mornings.