Government's $500,000 to treat 34 problem gamblers

Sandra Goudie

The Government is being accused of wasting money after hundreds of thousands of dollars were given to problem gambling organisations that treated only tiny numbers of people.

In one case, Hamilton's Pacific Peoples Addiction Service received $143,160 from the Ministry of Health to provide counselling for a target of 308 people.

But it attracted only eight users - at an average of $17,895 for each problem gambler.

Many of the 26 problem-gambler assistance providers that receive funding from the ministry failed to meet specific targets laid down in their contracts for the 2005-06 financial year, and a review of 12 of them is under way.

Some may be asked to pay back a portion of the money they were given.

The National Party obtained the figures through written parliamentary questions, and it yesterday used them to launch an attack on the Government and to ask the Auditor-General to investigate the "massive overpayments".

"Contracts also reveal that people are being counted as clients if they have had a 16-minute phone conversation," National's internal affairs spokeswoman, Sandra Goudie, said.

"Is the Government happy to pay up to $18,000 for a 16-minute phone conversation or a single half-hour counselling session?"

The Ministry of Health took over responsibility for funding and co-ordinating problem-gambling services in 2004 from the Problem Gambling Committee.

The services are funded through a levy on gambling operators.

Some of the providers involved are also new, and Associate Health Minister Damien O'Connor yesterday appeared to suggest that the issues being raised could be due to teething problems in the new system.

"They have been paid money to assist them to set up the organisation that they have, and if there are any problems they will be identified through the review," Mr O'Connor said.

He noted that it was a new area of responsibility for the ministry that involved some guesswork in terms of how many gamblers would seek help.

The contracts of the providers are for two years and they expire in 2007.

However, due to concerns already arising about how some organisations have performed, 12 contracts are under review and may be renegotiated.

Aside from Pacific Peoples Addiction Service, three other providers also had an average cost per user of more than $10,000.

Te Whanau o Waipareira Trust was given $186,976 and had a target of 605 users in its contract - but it drew only 13 users at an average cost of $14,382.77.

Waitemata District Health Board treated 13 people, well short of its target of 460, at an average rate of $13,246.15 per gambler.

Ned Cooke, the general manager of the Pacific Peoples Addiction Service, did not dispute the figures but said last night that other parts of his organisation were working well.

"There's no misuse of money. We're getting audited in a couple of weeks [by the Ministry of Health] and I've got nothing to hide."

The organisation was negotiating with the ministry, which wanted to cut its problem-gambling service from 1.5 fulltime-equivalent staff to 0.5, which he thought unrealistic.

He said the problem-gambling service was created in 2005-06 but had struck costly difficulties in recruiting, training and retaining suitable staff and in attracting enough clients.

He said the service had a good record on other contracts. The Waikato District Health Board provided drug and alcohol services, but these, too, had struck difficulties when they began in 1998.

The Waitemata District Health Board's general manager of mental health services, Dave Davies, said senior officials were gathering information about its Pacific problem gambling service so it could respond today to Ms Goudie's statements.

Waipareira said it would issue a statement today.