Financial strife causes staff cuts at Auckland People's Centre

By MATHEW DEARNALEY

Auckland's technically-insolvent People's Centre for beneficiaries and low-income families is down but not out, says one of its founders.

The 13-year-old organisation has had to lay off 19 advocates and support staff at its central Auckland base and Mangere and Manurewa branches against debts of $377,000.

This has put other voluntary organisations such as the Combined Beneficiaries' Union and Citizens Advice Bureaus under great strain. Migrants and others needing help in approaching Government agencies have jammed their phone lines.

But an associated trust providing low-price medical and dental services to about 10,000 patients at the three People's Centre sites remains in business, and is supporting a recovery plan to clear the centre's debts within seven months under a newly-elected board.

"We are not Air New Zealand - we are not going to ask the Government to bail us out," said the medical trust's general manager and People's Centre acting manager, Bill Bradford.

Mr Bradford, husband of Green MP Sue Bradford and a co-founder with her of the centre in 1990, said the organisation had criticised "hand-ups" to big business in the past and wanted to prove such a key player in the community sector could get itself out of trouble.

He hoped in due course to restore advocacy services which had been used by 5000 to 6000 people a year in disputes with various agencies such as Work and Income New Zealand and the Accident Compensation Corporation.

But only when the debt repayment project was well in hand would funding providers such as the Government be approached for help with restoring specific programmes.

The new board had raised a loan of $234,000 from the centre's Manurewa property and won approval from all major creditors for outstanding debts to be paid off in instalments, starting at the end of this month.

About 2000 families also pay a four-weekly subscription of $10 to the centre entitling them to the medical trust's services, raising about $240,000 a year.

Laid-off staff have received outstanding wages apart from holiday pay, which is not far away, but will have to wait with other unsecured creditors for redundancy compensation.

Despite the suspension of the centre's services - which included budgeting advice, counselling and $2 haircuts as well as advocacy - medical trust financial manager Rachel Stevenson said there was no evidence of families stopping their automatic payments.

New members were in fact joining each day, she said, indicating a great need and considerable goodwill towards the centre.

Mr Bradford told the People's Centre annual meeting last month, at which the new board was elected, that his trust had found no evidence of anything illegal in the centre's financial management.

But he said the insolvency raised serious questions of competence at both board and management levels and it was ironic that, after weathering the "blitz on the poor" such as from the 1991 benefit cuts, the greatest threat to the centre's survival had come from within.

He said staff of Government agencies with whom centre advocates had sparred in the past had offered moral support, and the organisation had received many offers of voluntary assistance which it was unable to take up until new structures were in place.