Ministry says no more job cuts for three years

The head of the Ministry of Social Development will not approve further restructuring which results in layoffs for at least three years, unless Government policy forces him to do so.

Ministry chief executive Peter Hughes appeared before the social services select committee yesterday to explain his plans for restructuring, which will see up to 200 workers made redundant.

Mr Hughes said the restructure will save up to $22 million year on year and allow the ministry to appoint an extra 60 to 70 "frontline" workers, such as case managers or social workers.

He conceded that the laid-off staff could effectively become clients of the ministry while the process of finding new jobs was under way, and said he had undertaken to try to ensure each had at least one good job offer.

He could not give a firm guarantee of future restructuring because of the potential for Government decisions to affect the ministry's structure.

"What I can say is it is not my intention as the chief executive to initiate any further structural reviews of this sort for the next three-year period. I don't see the need to do that once we get through this and I have said to my leadership team that I will not approve group restructures that will result in redundancies for that period."

The restructuring followed a review in 2008 which found the ministry would overrun its budget by about $100 million a year over the next three years without further belt tightening.

Mr Hughes said the restructure was the only option to cut costs and would enable the ministry to live within its means until at least 2012. It amounted to a 5 per cent efficiency gain, comparable to the private sector.

"My view is that the Government and taxpayers of New Zealand should expect no less of big public organisations like my own."

The ministry had already changed services to deal with clients more efficiently and changed business processes, such as using information technology more to reduce the need for staff. These changes had netted savings of $168 million a year since it launched its "value for money" review process in 2001. A further $238 million was needed and the ministry had a four-year target to reduce staff numbers by 500, largely through attrition.

Jobs lost in the restructuring will make up about 80 of that number. Mr Hughes said the ministry was one year through that plan and about 100 jobs had already been shed.

Asked by Labour whether Social Development Minister Paula Bennett was involved in the decision to restructure and could have prevented it going ahead, he said all responsibility for staffing matters was his.

If Ms Bennett had urged him to halt the process, he would have taken it into account and tried to find another way. However, he emphasised that restructuring was the only option left to absorb its cost increases.

He said attrition levels had fallen during the recession. Because of the extra demand in the recession, the ministry was recruiting frontline workers - including 104 Work and Income case managers and work brokers. Later in the year, it would seek a further 40 to 50 social workers.

All staff made redundant would be dealt with one-on-one to try to find new jobs.

The Government has also set up a new redeployment centre to give public servants facing redundancy easier access to other jobs within the public service.