The Ministry of Health is bad at managing investment and getting worse, according to a searing review by Treasury, which ranked it one of the country's worst-performing ministries.
The report downgraded the ministry's "investor confidence rating" (ICR) - essentially a government credit rating - from "C" to "D", well short of the "B" rating expected of large investment-intensive agencies like Health.
For some categories of performance, including project delivery and asset performance, the Ministry of Health was given a rating of just 2/10. The ministry's long-term investment plan scored just 4/10.
Health Minister Andrew Little was not exactly quick to defend the health system, saying it was "obvious the health sector, especially the DHBs, have been struggling financially for some time".
"In spite of intense supervision and oversight by the ministry of some DHBs there are still some big deficits showing," Little said.
Treasury regularly reviews the investment plans of different ministries, giving them a sort of governmental credit rating from A-E. The system is meant to give agencies something comparable to a credit rating they might receive from the private sector.
Those ratings then go to Cabinet to be approved by ministers, who have the final say over what each ministry gets rated. However, because of Covid-19, this particular round of ratings, completed in 2020, skipped the ministerial step.
The rating does not change the amount of money a ministry can spend, which is determined by the government Budget. However, it advises Cabinet on how much freedom each ministry can be given when it comes to overseeing expenditure.
Health was the only ministry to be given a downgrade in its round of assessments.
Customs, the Ministry of Foreign Affairs and Trade, the Ministry of Business, Innovation and Employment and the Department of Conservation all received "B" ratings, while the Department of Internal Affairs was rated "C".
Health scored 40/100 overall, down from a score of 62 (or "C") notched up the last time the ministry was rated in 2016. Health has the second-lowest ICR of 25 agencies to be rated. The lowest was Southern District Health Board, which scored 36.
A detailed analysis of the rating said the downgrade was "partly due to significant change in the organisation such as staff turnover in critical roles (i.e. leadership)".
The National Party's health spokesman, Dr Shane Reti, said it was concerning to see the ministry downgraded.
"They've gone from a 'C' in our hands to a 'D' in their hands," Reti said.
He was also critical of the way Treasury calculated the rating, which put a lower weighting on project delivery.
"Why would you down-weigh the ability to deliver a project? There's something very not good about Treasury accepting a lower standard of delivery," Reti said.
"Delivery of national immunisation programmes, they should be the best at that. They must have in-house capacity to deliver on time in scope and in budget," he said.
A paper released under the Official Information Act warned that Health's downgrade would likely attract attention and commentary.
Treasury said this is not because of the ministry's current popularity, but the fact that downgrades generally attract some public scrutiny.
A spokesman for Treasury said a lower rating was "informing the agency on improvements and scale of lift required in order to meet the expected level of performance".
Health had reflected this in the "health infrastructure unit's progress in developing a national asset management programme to support the health sector's capability and risk management, as well as strengthen the investment pipeline for nationally significant infrastructure investments over the last 12 months".
Treasury acknowledged the investor confidence rating is not perfect; a paper released under the Official Information Act said it had a complicated methodology and "lacks credibility with some CEOs and ministers".
Treasury paused further assessments while it reviewed changes to the way it calculates the ICR.