Minister steps in as mental health service providers left in the lurch

By Glenn McConnell

Mental Health Minister Matt Doocey says it’s “not good enough” that community mental health providers have been left with no clarity about if their expiring Government contracts will be renewed.

Stuff has heard from a number of mental health services which have no clue if their contracts are being renewed, just weeks from those contracts coming to an end.

These are services which provide specialist care across New Zealand, helping patients with counselling, addiction services, and children with emotional and behavioural issues. The Government relies on charities to provide many of these services and pays them through contracts run by Te Whatu Ora - Health NZ.

One community mental health service manager, who asked not to be named over fears that the Government would cut their contract, described this year’s contracting process as “the worst it’s ever been”.

She said that since the coalition came to power, at the end of 2023, Te Whatu Ora had become painfully slow and refused to communicate about what services would continue to be funded.

“We just don’t know what Te Whatu Ora is doing,” she told Stuff in early June. Some of her contracts were set to expire at the end of the month.

“This is not normal. In the past, this would all be sorted well before now. But with all the cuts the Government has made, it’s hitting the front line. They removed all the people from departments who were responsible for handling contracts,” she said.

Contracts tend to expire on June 30, or in September. She said that in the past, service providers would have certainty about three or four months before those contracts expired.

When Stuff raised these issues with Doocey, he said he would be taking it up with officials.

“Let’s be clear, that concerns me when I hear feedback like that from the NGO and community sector. I think it’s important that we do give the certainty. Contract renewal is a big part of that,” he said.

He said Budget 2025, which was confirmed on May 22, had increased funding for community mental health services.

“That takes a while to work through. But I’ll be very clear with officials, that I expect them to write to every service provider to ensure they have certainty with their contracts,” he said.

He said he’d been assured that every community provider with expiring contracts had received some communication from Te Whatu Ora.

A letter was sent, which Stuff has seen. But the letter was generic and said that some or all contracts would be renewed - pending review.

One issue, which numerous services have raised, was that they have multiple different contracts set to expire. They haven’t been told which would continue, or if there would be increased funding to expand their services or pay for rising costs.

On hearing those concerns from Stuff, Doocey said: “That’s not good enough.”

The contracts delay has been the talk of the mental health sector in recent weeks.

The Platform group, which represents community providers, said it heard from members across the country that were struggling to negotiate with Te Whatu Ora.

“Overall, it seems we are in the same situation as we were in after Budget 2024,” the group said, in a newsletter to its members last week.

It said some members were being pressured to sign shorter term or significantly different contracts, and nobody appeared to know if there would be funding to meet “cost pressures” such as wage growth.

Labour’s mental health spokesperson, Ingid Leary, said she’d heard from about a dozen community providers who weren’t sure if they would still be operating by next month.

“How on Earth does the Government think the community sector can run effectively with this much uncertainty? They would not run a business this way,” she said.

She said the providers still waiting to sign new contracts had well established track records.

“Many have been around for some decades, providing mental health and addiction services. They knew their communities incredibly well,” she said.

Te Whatu Ora said it wasn’t unusual to have contracts still being reviewed with only four weeks left.

“This process (and timeframe) is the same as last year and providers have recently been sent letters of notice where we intend to renew their contracts to help them plan their services for beyond June,” Lisa Gestro, the acting director of Mentally Well, said in a statement.

She said contract renewals were being finalised, with those decisions communicated, this week. That process would be completed by the end of the month, she said.