Counselling service could fold without funding boost

Minister of Finance Bill English said it was unlikely Government would bail the organisation out and there were other agencies which could pick up its work. Photo / NZ Herald

The biggest provider of counselling services in the country could fold as early as this week unless it gets a funding top-up, but Government says it will not bail it out unless it proves it can live within its budget.

Relationships Aotearoa, which has 120 staff and around 7000 clients at any given time, receives most of its funding from the Ministry of Social Development.

It has told Government that it is struggling to stay afloat and requires a funding boost or it will be forced to close its doors.

Finance Minister Bill English said this morning it was unlikely Government would bail the organisation out and there were other agencies which could pick up its work.

Social Development Minister Anne Tolley said the not-for-profit organisation was running at a deficit, and Government could not keep propping it up.

"They've got to be able to meet their service contracts and they've got to be able to live within their budget. That's just a fact of life."

She said Government agencies had been working with Relationships Aotearoa for years to make it financially sustainable.

"That's the difficulty that we're now in. How much longer do we go on supporting them when they're delivering less than we're paying them for and we're having to underwrite them?"

James Hamilton, a member of Relationships Aotearoa's interim board, told Radio New Zealand the agency had not had a lift in funding in seven years.

Mrs Tolley said the company's deficits had been increasing, though its annual report showed a deficit of $404,000 in 2012/2013 and $271,000 in 2013/14.

Mr Hamilton said expenses had been reduced and 46 jobs had already been cut in order to balance the budget.

There were some contingency plans in place to pick up the organisation's clients if it was forced to close its doors.

Mrs Tolley said the transition of clients to other agencies would take some time and vulnerable people were likely to miss out on counselling.

The organisation has been running for 60 years in various forms, and was one of the key providers of support for people affected by the Christchurch earthquakes.