Axing of HBL reflects poorly on Ryall - Labour

Former Health Minister Tony Ryall. Photo / File

The axing of cost-cutting company Health Benefits Limited is a blot on former health minister Tony Ryall's record, the Labour Party says.

The Government yesterday confirmed it would wind down the Crown-owned company, which was tasked with saving money by bulk-buying services, such as hospital meals and linen, for New Zealand's 20 district health boards.

Responsibility for the cost-cutting measures would be handed over to DHBs, some of which have been highly critical of Health Benefits Ltd (HBL)'s role and impact.

Labour's shadow health minister, Annette King, said yesterday that the company had been "a dog from the beginning".

She urged the Auditor-General to look into HBL, which she said had been beset by cost over-runs and project delays.

The Auditor-General rejected a request by Labour to investigate HBL earlier this year. It reported in 2013 that the company was not being transparent enough in its reporting, but said a year later that it had improved.

An HBL spokesman said yesterday the company's books were audited by Audit New Zealand.

Ms King said the axing of HBL reflected badly on Mr Ryall, who resigned the portfolio after eight years to widespread praise in September.

"His success was keeping a lid on things and keeping problems out of the media."

Mr Ryall said before the election that HBL's target of $764 million in savings within five years was unlikely to be met. New Health Minister Jonathan Coleman reiterated this yesterday, saying that the target would still be reached by a new DHB-owned vehicle healthAlliance but "potentially over a slightly longer timeframe".

Q&A

What is Health Benefits Ltd?

A Crown-owned company set up in 2010 to save district health boards money.

How much money has it saved?
Gross savings are $302 million in four years. Officials say a forecast of $764 million gross savings by 2015 is unlikely to be met.

Why is it being scrapped?
The next step of the savings