Health NZ's project to pay $2b back to staff makes slow progress

Three small health districts are exposed to the biggest risks in the trouble-plagued project to pay back thousands of dollars owed to hospital staff.

Meanwhile, all the contracts of the contractors n the Wellington-Hutt-Wairarapa district that are on the payroll project expire on 20 December "our risk of key resource failure increases as we await final sign-off" for extending these.

This is according to the latest progress report on a multi-year project that Health New Zealand Te Whatu Ora is mired in, to pay back $2 billion to current and former employees hit by breaches of the Holiday Act.

Its latest progress report shows the Lakes health district around Rotorua, Midcentral and Whanganui have got virtually nowhere on the payback.

It shows 40 percent of all the project's tasks nationwide have either not started or are at risk - a chart summarising efforts across the 14 districts is littered with red "at risk" boxes.

"The overall status of the programme remains as 'red' as we are unable to achieve the rectification and remediation dates communicated at the beginning of 2024 and subsequently updated in April 2024," it said.

Auckland - which covers 120,000 workers and ex-workers - began on the project first and has got the farthest.

Another four districts - Hawke's Bay, South Canterbury, Taranaki and Bay of Plenty - hoped to make payments by Christmas, and Hawke's Bay has done so.

The aim is to have everyone paid back by July 2025, nine years after health authorities were first made aware of the Act breaches. Former staff will be paid after current staff.

Health NZ has struggled to find skilled people and has been relying heavily on consultancy firm Ernst and Young (EY) and other contractors.

But like Wellington, Waikato has a problem with contracts due to expire that it has sought approval to extend.

"If these backfill resources contracts are not extended, the project will lose key resources ... The project is tightly resourced so any loses [sic] will impact (slippage) both Rectification and Remediation."

At the reddest end of things, Whanganui's scorecard read: "Project delayed as resources are focussed on other... districts."

"Whanganui is likely to be the last" of five small districts to get fixed. It covers 3000 people.

At the opposite end, in Hawke's Bay - where almost 11,000 people are involved- the scorecard showed it had been through "Dress Rehearsal 4 ... complete with no issues" and was "waiting on final national alignment guidance" to begin payouts.

"Even at the smaller districts millions of lines of data need to be investigated," said the report for October.

The project took years to launch after tortuous negotiations with health sector unions, and has been beset by the complexity and extent of the work, and the expertise needed by each part of the work - and there eight parts to that.

Expertise was "often hard to source", Health NZ's report said.

Not only does it have to pay everyone back for shift and leave miscalculations made complicated by hospitals' huge staff and 24-hour cycles, but also mothball a couple of dozen old and fragmented payroll systems, to replace them with one connected one.

The nightmarish fallout relates to legislation - the Holidays Act 2003 - that critics said was badly flawed. A replacement for it is also years behind schedule, with the government in September optimistically stating it had reached a "milestone" by approving an early "exposure" draft of a bill that went out for feedback.

Nurses Organisation head Paul Goulter said payroll was a fiasco that had dragged on for years.

"Our members in Auckland, Counties Manukau, Waitematā and Hawkes Bay have got their back pay but thousands of others are still waiting."

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