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Budgeting services face closure due to fewer contracts
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Christine Liggins, chief executive of debt solutions service DebtFix,
said she had heard of about 20 that were facing closure after not
securing a contract.
Dunedin Budget Advisory Service - which last year received $230,000
from MSD - is not getting a cent next year, and manager Andrew
Henderson was dumbfounded.
"I feel personally devastated. I feel for our staff, I feel for our
clients," Henderson said.
"We've had many clients that we work with on an ongoing basis for
whatever reason, and the fact that we're not going to be able to offer
our services to those people is devastating."
The organisation was told its proposal did not reach the "required
score", which Henderson found surprising, given the service had a
"great relationship" with the ministry, and there was an increasing
number of people doing it tough financially.
"More and more working families are coming to our service for help,
which is unusual.
"We're even getting into the likes of professionals - so teachers,
dentists, painters, plumbers, all sorts, and people really are
starting to struggle.
"The fact that we're no longer to be able to support them is a real
worry."
It would try and merge with another to stay afloat, but that was not a
sure thing, said Henderson.
## 'It's a real worry'
At Family Finance Services in Upper Hutt, manager Heather Lange said
it was lucky to get a "good allocation" - but it had dropped to the
level it was receiving about five years ago.
On Monday her email inbox was flooded with "emotive" emails from other
organisations that did not get a contract, or were getting
considerably less money.
"It's just like watching a train derail," she said.
"It's a real worry, when I know how many clients turn to us."
FinCap, which supports free financial mentoring services, said if
anything, funding should be boosted, given rising demand.
"We think there will be less services overall for communities to
access, and yet we have, as we all know, increased constraints for
families with cost of living and we're seeing those presentations
coming through financial mentoring services," said chief executive
Ruth Smithers.
Between 2022 and 2023, about 50,000 people accessed such services -
but that jumped to 69,000 between 2023 and 2024, she said.
"We'd just really encourage the government to maintain and regularly
consider the need to increase current funding, so not to reduce the
funding."
## Funding model provides 'greater flexibility' - ministry
The government decided to fund a certain number of staff from 1 July,
replacing the existing model of funding a number of client sessions.
The new model gives providers greater flexibility to tailor services
to their client's needs, rather than being tied to a specific number
of sessions, MSD's Safe Strong Families and Communities General
Manager Mark Henderson said.
Funding staff was also how the ministry paid for a range of other
services, he said.
A document shared with RNZ - outlining the ministry's proposal to
change the model - included provider feedback, which showed most were
in favour of it and agreed it was more flexible.
But they raised concerns about what it would mean for funding, and
told the ministry funding a total of 180 staff would reduce budgeting
advisors' coverage across the country.
RNZ
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