Sector funding crisis forces negotiation impasse

26 August 2008

Sector funding crisis forces negotiation impasse

Disability support service NZCare has contingency care plans in place for 500 clients, after mediation with the Public Service Association (PSA) failed.

The PSA has informed NZCare that it will proceed with industrial action that commenced on Monday 25 August in support of claims for an average 23 percent pay increase.

The union has also instituted a three week grace period starting in the middle of September during which no further strike notices will be issued, to allow NZCare to work with other parties to try and resolve the issue.

NZCare says the PSA’s move will significantly impact the disability support services the organisation provides to its clients, forcing the organisation to take contingency measures.

Group General Manager Donna Mitchell said the Ministry of Health was offering NZCare a funding increase this year of just 1.5 percent and the organisation was getting caught in the middle of a serious disability sector funding shortfall.

“Our sector is on the verge of a crisis. We are faced on one side with union demands – which we have some sympathy with – but on the other hand by funding from the Ministry of Health which is simply not going to meet those demands.

In reality the union is only seeking parity with wage rates for similar roles in the public sector. There is a gulf between what is being paid in the public sector and funding available for wages in the NGO sector.

In May, this situation was predicted by the National Residential Intellectual Disability Providers Group (NRID) in a report that said that Ministry of Health contract increases would be insufficient for many providers.

When we receive funding increases, our record shows we pass these on to our staff. But we cannot consider a claim of this scale without a significant change in funding from the Ministry.”

Ms Mitchell said that NZCare would continue to work with the Ministry of Health, Government and the PSA to reach a solution. The organisation is also seeking an urgent meeting with the Minister of Health and the other parties involved. She said in the meantime, NZCare had taken steps to ensure the safety and support of individual clients affected by the action.

NZCare is a disability support service that employs over 1000 staff. It supports 500 people (some of whom have highly complex needs), to live ordinary lives in the community.

Background on sector funding crisis

In May 2008 the National Residential Intellectual Disability Providers Group (NRID) released a report, conducted by Deloittes, which revealed major problems with the funding of disability support services.

Among other things, the report found that:

- Proposed MoH contract increases are insufficient for many providers to cover historical and projected cost escalations.

- Contractual price increase irregularities are commonplace with no clear rationale within the sector and the MoH has not delivered a Transparent Pricing Model that provides confidence for current and future sustainable service delivery.

NRID is a national organisation comprising intellectual disability providers who support approximately 6,500 New Zealanders with an intellectual disability.

ENDS

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