Impact of MSD job cuts on regions unknown, concerning

Social service providers are keeping a watchful eye on the Ministry of Social Development to understand how job cuts and other cost saving measures affect them.

The ministry announced on Thursday that it had offered voluntary redundancies in a bid to find the 6.5% savings the Government had asked of it as part of its mission to cut $1.5 billion a year from the public service budget.

MSD, which employs around 9200 people, has confirmed that those in frontline roles will not be able to apply for redundancy, but it expects to make more cuts after the voluntary redundancy process.

And while it expects the cuts to be concentrated in Wellington, there’s no clarity about how this will affect contracts with community service providers.

Deputy chief executive of people and capability Nadine Kilmister said frontline staff made up the majority of the ministry’s regional workforce and would therefore not be eligible for voluntary redundancy.

Other teams who won’t be able to apply are the Historic Claims Team and the Social Sector Accreditation Unit (Te Kāhui Kāhu).

“To date we have taken a range of measures across our organisation to save costs, including reducing the use of contractors and consultants; reducing our workforce numbers by not replacing roles as people leave unless absolutely necessary, and reducing costs on travel and consumables,” Kilmister said.

Many were surprised to learn about the redundancies on Thursday and the consensus was it was too soon to know how it would impact regional services.

In Southland, Ngā Kete Mātauranga Pounamu Charitable Trust chief executive Tracey Wright-Tawha said the NGO was already feeling the trickle down effects of government’s cost cutting measures.

“We have received notice of three Crown contracts that won’t be renewed due to the requirement to make savings. At its worst end, it means the possibility of job loss,” she said.

The trust was looking for ways to tighten its own belt without compromising service delivery, but the sector had already proven itself – particularly during the Covid-19 pandemic – to be an effective, flexible, fast pivoting and cheaper service delivery option, Wright-Tawha said

Providers are looking for assurances and trust there won’t be a “nonsensical approach” leading to a 12-month contracting model, she said. “Attracting and retaining qualified experience in our sector is hard enough, without the added pressure of short-term contracting.”

In Nelson, Te Korowai Trust manager Robyn Parkes said the trust had been seeing more people who needed MSD support because of factors like job losses and budgets not stretching far enough.

A staff cut would add more pressure to the situation, she said. “If you cut down staff, they may not be able to help as many people. It could make it harder for whānau.”

New Zealand Council of Christian Social Services executive Nikki Hurst said the hope was that Government stuck to its plan of “cutting back office staff to bolster the front line”.

“If this is not what the jobs cuts achieve, it will cause problems for communities.”

She suggested communities start thinking about how they might “step into the gap” and while providers would always do what they could, she conceded that services were already stretched; many still recovering from the impact of Covid-19.

Social Service Providers Te Pai Ora o Aotearoa represents 240 organisations around the country.

Chief executive Belinda Himiona said it was too early to tell how the job cuts would impact services or contracts but said most organisations had strong relationships with MSD at the coal face. “We will be watching with interest and protecting those frontline services,” she said.

The Ministry of Health also announced it would be cutting 134 roles on Thursday.

Transformation programme office director Geoff Short said the organisational change proposal would only impact Ministry of Health staff, not those working for Te Whatu Ora.

The ministry has staff in Wellington, Christchurch and Auckland.