Fears public sector cuts 'more pain for no gain'

State Services Minister Tony Ryall. Photo / APN

Plans to save money by merging health promotion groups and scrapping the Mental Health Commission have been criticised with claims it will mean important messages and services are lost.

State Services Minister Tony Ryall yesterday set out proposals for further changes in the state sector as part of the Government's drive to find savings.

It included scrapping five Crown entities and three tribunals, merging two agencies and sharing back-office functions and services across more departments.

Under the proposal, one new agency would take on the public health promotion work done by the Alcohol Advisory Council, Health Sponsorship Council and the Ministry of Health.

Mr Ryall said that single measure could save up to $4 million a year.

However, Labour health spokesman Grant Robertson said the changes would result in "more pain for no gain" and there was a risk important public health funding and focused campaigns could be lost.

Mr Ryall rejected the possibility the change would result in a reduced focus on issues such as alcohol harm reduction, saying it would be enhanced by combining the experience of staff working across the sector.

Mr Robertson said he was also concerned by a proposal to scrap the Mental Health Commission early.

"There is still a lot of work to do to update the Mental Health Blueprint. Mental health is often the poor cousin of the health system and this change risks making that situation worse."

Mr Ryall said he was committed to the work of the commission, but believed it could be carried on in a different way.

Education will also be affected with plans to merge the Education Review Office and the Qualifications Authority, NZQA. Mr English said it would reduce back-office costs without affecting quality assurance in education.

"We absolutely need to maintain our ability to provide quality assurance for the education system, right from early childhood through to tertiary - we're not going to compromise on that."

Mr Ryall said all the proposals would go through "due diligence" to ensure they stacked up. Although job losses were inevitable, he did not know on what scale that would happen until after that exercise, or what savings could be expected.

Mr English said he expected such changes could save 10 to 15 per cent of back-office costs.

"It isn't really a choice. It's a necessity with the constraint on government finances at the same time as recognising over the past 10 years there has been substantial growth in public spending and that was unsustainable."

He said the public still required high quality services. Although there were now 2000 fewer staff in the core public service, there were also more frontline workers, such as extra police and doctors.

Public Services Association national secretary Richard Wagstaff said the ongoing "death by a thousand cuts" inflicted by the Government would inevitably result in service losses. He questioned whether National was using the excuse of "efficiency" to justify covert cost-cutting.

Labour's state services spokeswoman Ruth Dyson said there was no evidence "the proposals would deliver either efficiency or effectiveness".

She said it was ironic National was creating a new bureaucracy to achieve its aim by setting up a Better Public Services Advisory Group to run it.

She expected it would only result in the need to employ more expensive consultants to do the work of scrapped policy advisers.

Act MP Sir Roger Douglas criticised the proposals, saying it did too little and amounted to no more than tinkering for minimum savings.

THE PLAN
* One new agency to replace Alcohol Advisory Council, Health Sponsorship Council and some Ministry of Health promotions.
* Education Review Office and NZQA to merge.
* Mental Health Commission scrapped earlier than 2015.
* Charities Commission scrapped - work going to Internal Affairs.
* Crown Health Financing Agency scrapped.