The Ministry of Health has been removing vacant roles, though workers have been told these savings are not enough to ensure it meets its savings targets - and jobs will have to go on the line.

The ministry has pressed pause on recruitment and engaging with contractors and consultants, as it looks to find 6.5 per cent cost savings ahead of the upcoming Government Budget.

All public service agencies are urged to find cost savings between 6.5 and 7.5 per cent on average.

Public Service Minister and Minister of Finance Nicola Willis has urged agency chief executives to use “good judgment” in their search for savings.

NZME understands an all-staff meeting was held on Friday morning, when workers were told the ministry would “need to propose some job losses.”

The Ministry of Health confirmed in a statement that its Executive Governance Team has been working to find “non-personnel savings”. Communications released to NZME under the Official Information Act state that a recruitment pause was put in place on December 21 - just one day after Willis’ mini-Budget.

The Ministry’s Transformation Management Office director Geoff Short emailed staff in the Executive Governance Team the day after the mini-Budget, informing them recruitment has been paused for all positions “for the next few months”.

Short’s email noted the recruitment pause will enable the ministry to maintain a staffing number “closer to our target”, though would not confirm what its proposed ideal number of fulltime-equivalent employees was.

The email noted people who had resigned would not be replaced. Managers wanting to extend part-time employees’ or secondments contracts would require sign-off from the Director-General of Health, to be considered “by exception only”.

The use of contractors and consultants was also put on pause the day after the mini-Budget, with requests based on “exceptional circumstances” needing to be considered by the Director-General.

A further document released under the Official Information Act titled Ministry Budget FAQs did not have a set date when it was sent out, but interestingly said the ministry was working on options to make 6.5 per cent savings in its baseline “if we need to”.

Public Service Minister Willis has previously confirmed to a Parliamentary select committee that no agency would be exempt from looking for savings.

On January 24, the ministry’s people leaders updated staff on the proposals to slash spending ahead of Budget Day. An excerpt of the update states the ministry would need to “very carefully consider” any extensions to fixed-term positions, secondments and arrangements that go beyond June 30.

“Many of these are critical to keeping the business working or are part of backfilling arrangements and we are keen to provide certainty early for people in many of these roles,” the memo said.

Before managers were able to put through a request extending these roles, they were urged to consider the financial implications and whether or not their work was a “priority”.

Director-General of Health Dr Diana Sarfati met with staff in person and online on Thursday February 1, mostly to discuss what Safarti called “budget reduction”.

The official talking points of the Director-General’s update, released to NZME under the Official Information Act, outlines that the ministry has known “for some time” it would need to adjust its overall staffing level to fit the budget, as time-limited funding - including for the Covid-19 response - comes to a close.

Safarti noted the ministry’s Executive Governance Team has been taking the budget “very seriously”.

In the all-staff update, the Director-General noted jobs will effectively have to go on the line, saying “the scale of the changes needed to make savings at the level needed will likely require us to reduce positions that are not vacant”.

“That will likely mean job losses,” staff were told.

Workers were promised regular staff briefings would be held to keep workers informed on the updates.

The briefing notes also confirmed the ministry was not in a change process and would need to undertake “proper consultation” should that issue come to fruition.

Staff were informed support was available, with Safarti acknowledging the process will be “challenging”.

“I know you hear me say this often, but I mean it. Please make sure you reach out if you need help through these changes. Support is available,” she added.

The Director-General pointed out it would be an especially stressful time for those who had already been impacted by health reforms and last year’s structural changes: “I completely understand that this kind of change and uncertainty can be very stressful for people.”

The day after that meeting, a further idea to slash costs was put on the table by senior leadership. The ministry’s leaders met to discuss its race to find 6.5 per cent cost savings, with an excerpt of the update saying “We’re looking at our floorspace (to see if we can restack at least part of it, we’re looking at areas where we can defer spending, and we’re asking people to tighten the belt wherever it is sensible to do.”

Azaria Howell is a Wellington-based multimedia reporter with an eye across the region. She joined NZME in 2022 and has a keen interest in city council decisions, social housing and transport.