And its spending on “people and communications” grew from $8.5 million to nearly $30 million — an increase of 243 per cent, said Verrall, whose office requested the data under the Official Information Act.
“While Te Whatu Ora has been ordered to make $2 billion in cuts and has frozen hiring to frontline roles, the bill for contractors has soared,” she said in a press release.
But Te Whatu Ora is blaming global staff shortages as well as an obligation to back-pay years of incorrectly calculated holiday leave — holiday remediation — for its huge consultancy/contractors spending hike.
‘We will continue to work hard to keep our spending on consultants and contractors down.’
Most “people and communications” consultant spending was for human resources and payroll specialists required for holiday remediation, they said.
“Resolving Holidays Act remediation payments is extremely complex and time-consuming, requiring a large amount of manual processing and specialist skills,” a spokesperson said. Once that was finished — expected to be by the end of 2025 — consultant spending would drop significantly.
And the “vast majority” of its contractor spending over the 2023/24 financial year was for clinical locums in a tight market, the spokesperson said.
“We would rather employ permanent medical specialists . . . instead of contracting them as locums,” the spokesperson said. “But right now there’s a global shortage of health workers in specific clinical areas and New Zealand isn’t immune to this.”
‘This Government is relying on desperate short-term fixes for long-term problems.’
Te Whatu Ora also used specialist consultants “in limited circumstances that require specialist advice” but not a permanent appointment.
“We will continue to work hard to keep our spending on consultants and contractors down. That’s a strong focus across the organisation.”
Verrall said during its election campaign, National had promised to cut consultants and contractors — yet in health those had “ballooned” since the election a year ago.
“An $84 million year-on-year spike in contractor and consultant costs demonstrates that this Government is relying on desperate short-term fixes for long-term problems — an approach that will leave New Zealanders poorer and sicker in the long run”, Verrall said.
‘No freeze’
Minister of Health Shane Reti said he expected Health New Zealand to “prioritise recruitment into permanent roles” rather than use locums, particularly in areas with shortages.
‘Dr Reti has been assured there is no hiring freeze at Health New Zealand.’
Reti also disputed Verrall’s claims of a hiring freeze, a spokesperson said.
“Dr Reti has been assured there is no hiring freeze at Health New Zealand.”
A Te Whatu Ora spokesperson added that there had been a “significant drop” in its consultants/contractor spending since 2023/24. Its contractor spending was down by 18 per cent and consultants by 61 per cent.
Te Whatu Ora last week announced that it had paid over $15 million in Holidays Act remediation to its Hawke’s Bay staff.
- This article was edited on November 21 to correct the expected date when all holiday remediation payments would be made by — the end of 2025.