Callaghan Innovation staff fear for jobs

R&D funder the latest Crown agency to reveal possible cuts

We are proposing to refocus on our core functions to help relieve cost pressures. Callaghan Innovation

Callaghan Innovation, which funnels grants to startups and offers research-anddevelopment support to allcomers, is the latest Crown agency to reveal possible cutbacks.

An all-hands meeting was called yesterday morning where a round of consultation was announced, a spokesman confirmed.

Callaghan employs around 382 people, including about 200 scientists, plus others who wrangle grants and connect businesses with researchers. It has an annual budget of roughly $187 million.

The new Government has asked agencies to cut 6.5 per or 7.5 per cent of their costs in a bid to slash overall public service spending by $1.5 billion per year.

Callaghan grants are administered by its monitoring agency, the Ministry of Business Innovation and Employment (Mbie), which falls in the 7.5 per cent camp, but Callaghan has not confirmed any savings target.

“Callaghan Innovation is consulting with staff to seek feedback on a proposed board directive to refocus the organisation on its core functions,” the agency said in a statement.

“We are proposing to refocus on our core functions to help relieve cost pressures.”

Chief executive Stefan Korn said, “While we are not consulting on a restructure at this time, a shift in strategy like this inevitably means uncertainty for many of our people.”

Korn was not available to answer questions, Callaghan said.

“It is an anxious time for staff at Callaghan Innovation after today’s meeting with the chief executive,” PSA assistant secretary Fleur Fitzsimons said.

“The scientists and researchers at Callaghan do ground-breaking work that is not done anywhere else in New Zealand, there is a lot at stake.”

Staff feared for their jobs in the context of National cancelling elements of Labour’s science plans, but yet to announce new funding.

The union will be meeting with Callaghan employees on Monday.

‘Science City’ scrapped

Science, Innovation and Technology Minister Judith Collins said she would not comment, saying it was an operational issue for Callaghan.

In February, Collins fulfilled a campaign pledge to scrap the previous Government’s $450m plan, announced in Budget 2023, to make Wellington a “science city”.

The plan had involved creating three “science hubs”, one of which would have housed a new health and pandemic readiness research project involving Callaghan.

The decade-old, $80m National Science Challenges programme has also been cancelled as Collins clears the decks. At this point, it is not clear if the $80m will be banked as a saving or reallocated to other R&D plans.

There is a gap in funding until Collins details a new strategy, the PSA says. The anxiety extends to Crown Research Institutes. New funding plans are expected with Budget 2024.

“The PSA opposes cuts to Callaghan and the Government’s scrapping of the Wellington Science City initiative. The end of the National Science Challenges with no obvious replacement could spell disaster for the future of science in NZ,” the PSA’s Fitzsimons said.

Where Rocket Lab got its start

Named after the late Sir Paul Callaghan, the agency was created in its current form in 2013 when it was merged with Industrial Research Limited (IRL), the Crown agency whose Balfour St headquarters in Parnell provided office space and support for a generation of start-ups, including LanzaTech and Rocket Lab.

Rocket Lab founder Peter Beck, plus early backer and start-up investor Sir Stephen Tindall, have often spoken strongly in support of the Balfour St setup, where Tindall literally stumbled over Beck when he arrived for a meeting with another start-up.

More recently — and notably, given Korn’s comment about refocusing on core operations — Callaghan has been mired in controversy.

Auditor-General John Ryan delivered a devastating critique of the conduct of Callaghan Innovation and its former chief executive, Victoria Crone, in a major report tabled in Parliament on December 7.

The report examined the way Callaghan conducted itself in deciding not to award contracts to We Are Indigo/Manaaki, an Aucklandbased company offering services to startup firms in 2022.

The Auditor-General’s criticisms centred on what he saw as failure to properly investigate potential conflicts of interest when it hired a private investigator to look into allegations of fraud and misconduct by Manaaki, which its founders denied.

Ryan criticised Callaghan for not giving Manaaki right-of-reply, and for sharing sensitive due diligence information with other Government agencies, among other issues.