However, it meant: “We’re left with less.
“That contract for us funded our frontline youth workers and social workers - people who build trust with vulnerable young people”, including those coming out of state care.
Benesia Smith, OT commissioning and investment deputy chief executive, said she understood it was hard for organisations that had their funding reduced or ended.
The rationale for the agency’s decision-making was always to prioritise services “that best address the needs of tamariki and rangatahi in our care, or who have otherwise come to our attention, and require our support”.
Grooms said anyone who had aged out of OT’s care but could not live independently had to be turned away by his service, as the social worker to whom it hoped to connect them was funded through OT.
Green Party spokeswoman for children Kahurangi Carter said she had heard of OT staff being in distress because of “massive” workloads.
“We need those back-office staff,” she said, pointing to the agency’s restructures after the Government’s drive for efficiencies in the public sector.
She pointed to a recent “scathing” Auditor-General’s report that found its decisions around contracting social services were not evidence-based.
“The effects of decisions on children and their families are still not known. Given that this is the core role of Oranga Tamariki, it is unacceptable for it to be in this situation,” Auditor-General John Ryan said when presenting the report.
Carter criticised the cost-savings drive at OT, saying “some things are more important than saving a quick buck, and the safety and wellbeing of our tamariki is one of those”.
OT confirmed it ended funding with Te Tahi Youth for its YOSS contract, but continued to fund transition support services.
In the 2024 financial year, it funded 10 different YOSS providers. It was funding seven “across the motu” in the 2025 financial year.
Funding ended with two North Island providers, because OT believed the need could be met by alternative youth services.
The agency added that it continued to fund 16 youth service providers in the Canterbury region.
New Zealand Council of Christian Social Services chief executive Alicia Sudden said the impacts of contracting changes had been felt widely across the sector.
“We’ve heard of losses of staffing, so that could be social workers or restructuring within organisations,” she told Newstalk ZB.
She added that families were having direct contact with OT because of the loss of prevention and early intervention services that would usually work with them before needing to involve OT.
Last year, it was reported that 337 service contracts were scrapped after a review of OT’s funding.
Chhour had suggested the agency had been acting as a “cash cow” for community service providers.
She confirmed again that she asked OT to address underutilised or underperforming services. It was urged to remove duplication and focus on its “core business”.
Assessing OT’s $500 million worth of contracts across 500 providers took “months”, and some of its findings are still being implemented.
“What this process made clear was Oranga Tamariki had been funding a number of well-intentioned services that were not directed at caring and protecting of vulnerable children and young people,” Chhour told Newstalk ZB.
In January, she stepped in to override a decision by OT to cut funding for Barnardos.
At the time, she asked the agency to pause its review and extend contracts for providers who either did not have a current contract or had one ending shortly, through to December 31, 2025.
Sudden said there had been “assurances” from OT that any other funding due to end in July would be extended until December.
“We’ve been assured there will be a proper process followed,” she added, to build on recommendations from the Auditor-General’s report.
Chhour said such issues were raised in the review, but funding would be allocated to “where it will have the most impact” and could deliver meaningful outcomes.
“Other contracts are being renegotiated currently, with a focus on clarity around what the funding is for, what performance measures they need to hit, and clear timelines to ensure providers can make decisions around their organisation’s future.”
OT said its commissioning and investment team was working with service providers that had contracts due to expire on June 30, and confirmed those providers had been told their contracts would be extended for a minimum of six months.
Smith said care contracts were being extended until June 2026 to ensure the “continuity and stability of services” that supported the placement and care of young people.
The agency had been planning 17 regional engagements with providers to discuss its proposed commissioning and investment plan, in which it aimed to improve its communication with providers.
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.
