PSA national secretary Fleur Fitzsimons said, “Our health system could’ve used that money in much better ways, to improve clinical outcomes for patients.”
The public sector health agency’s biggest monthly cost on the restructure consultants was January this year, with a $378,060.22 price tag.
“It should not have been using expensive consultants to help lay off loyal health workers that had more to give our health system,” Fitzsimons added. “It’s a slap in the face for those people who were dismissed.”
Minister of Health Simeon Brown reiterated his expectation that Health NZ provides or enables frontline services to deliver healthcare to Kiwis.
“The Government has set clear expectations that we want to see spending on contractors and consultants, which ballooned under the previous Government, come down. Health NZ is reducing their spending in this area in line with government expectations,” the minister said.
Brown added that his expectation was the agency would continue to reduce spend on contractors “even as they go through their change process”.
The latest full-year forecast indicates a “significant reduction” in contractor and consultant spending, when compared with the 2023/24 year.
Health NZ told NZME it had nothing to add from a statement provided in March, amidst revelations it aimed to cut $204m of contractor and consultant spending.
Chief human resources officer Fiona McCarthy said the majority of spending on contractors and consultants in the 2024/25 financial year had been on clinical staff, specialists for Holidays Act remediation work, and on digital and infrastructure initiatives.
In March, the agency also confirmed it had been using contractors to fill vacant roles, admitting it would “rather employ permanent medical specialists” but that we are living through a “global shortage of health workers” in certain areas.
“Like many agencies, we also use consultants in limited circumstances that require specialist or independent advice but where we don’t need highly specialist skills on a permanent basis,” McCarthy added.
In the year to February, the agency spent $338 million on contractors and consultants.
Restructures and change processes are still taking place at the large public sector agency, meaning it is possible the price tag will continue to rise on external contractors and consultants to manage change proposals.
Most recently, Health NZ confirmed a “formal change process” to its IT teams, in a move that cuts 447 roles, with staff redeployment offers, and disestablishes a further 610 roles, allowing staff to put expressions of interest towards 651 new roles.
A further 758 vacancies are being culled at the agency under its latest restructuring.
At the time, acting chief information technology officer Sonny Taite explained the new operating model will see a nationally led and regionally co-ordinated digital services team.
“New ways of working will be implemented to drive efficiency and productivity through simplifying and standardising our process,” he said.
Late last year, Health NZ approved more than 400 voluntary redundancy applications in a bid to rein in spending and get its budget under control.
In April, when a proposal to cut roles in auditing healthcare providers was announced, former chairman Rob Campbell labelled it “disgraceful”.
District health boards were formally disestablished in mid-2022 by the previous Government, in a move Brown has slammed.
“When we took office in 2023, we inherited a health system in crisis. The previous Government launched a massive restructure in the middle of a pandemic and scrapped the health targets that kept hospitals accountable. Despite record spending, the result was a system tangled in red tape, leaving health officials stuck in meetings while patients languished,” the minister wrote in March.
Health NZ’s board was sacked last year, with concerns about the agency’s spending.
At the start of his role as Health NZ commissioner, Lester Levy suggested that finding $1.4 billion in savings while also improving services would require between 2500 to 3000 “back-office” roles to be cut.
Azaria Howell is a multimedia reporter working from Parliament’s press gallery. She joined NZME in 2022 and became a Newstalk ZB political reporter in late 2024, with a keen interest in public service agency reform and government spending.
