There's "incredible disappointment" among community mental health providers that a promise of multi-year contracts is yet to be honoured, an industry representative says.

But Mental Health Minister Matt Doocey told RNZ about 80 percent of organisations would have multi-year contracts by the end of 2026, and Health NZ said the transition was underway.

Providers' contracts with Health NZ are rolled over annually, and they have consistently been calling for longer terms to give them more certainty.

But once again the contract rollover date - 1 July - passed before new contracts were sorted.

Some were yet to receive the paperwork, while others had received single-year contracts which was "a total surprise" said Sally Pitts-Brown, chief executive of national provider, Pathways, and chair of Platform, the industry body.

Pitts-Brown said organisations needed long term investment but instead had been forced to trust that annual rollovers would continue.

"The fact that we only have [single]-year contracts up till now has seemed incredibly inefficient and actually disrespectful for those of us that work in the area," she said.

Agencies were excited last year following Minister Doocey's commitment to multi-year contracts, she said, but that had now been replaced with disappointment and confusion, after learning providers in some of the four health regions would not receive them.

"There's incredible disappointment that we are being told so late in the piece, and in fact after 1 July, that the commitment is not going to be honoured for all regions."

Pitts-Brown wanted Doocey's latest commitment - that 80 percent of providers would have multi-year contracts by the end of the year - in writing.

"I think that's the least that providers can ask for."

Minister says longer contracts are on the way

Doocey said he had been very clear with Health NZ that they must move to multi-year contracts, because single year deals were "not good enough".

"But when I got the agreement in principle around policy that we moved to 80 percent being multi-year contracts, I was advised that it would take around 18 months to two years to do that. So we're well over halfway in that process," he said.

Part of the reason for the delay was due to timing with the government's Budget, which was delivered at the end of May.

"There's always a bit of a mad dash administratively between May and the first of July to renew those contracts," he said.

"But I just want to affirm my commitment that growing the NGO and community sector is something that I'm very committed to."

Doocey said community providers received about a third of the more than $3 billion ring-fenced for mental health and addiction services, and he wanted that to grow to half.

'Complex' transition to multi-year contracts

Health NZ's mentally well director Lisa Gestro said the rollover programme was considerably more complex than previous years, combining annual renewals with modernising legacy contracts, strengthening contract management practices and transitioning to the agency's new national contracting system.

"All of this was required to enable the safe transition to multi-year contracts," she said.

"Many legacy agreements have evolved over more than a decade through successive amendments, provider-specific terms, and locally developed service specifications. Before these agreements can appropriately transition to the new national contract framework, they require review and alignment to ensure they remain fit for purpose."

Gestro acknowledged delays had created concern, but noted funding and service delivery had been maintained throughout the process.

"Health NZ will continue to work closely with Platform ... to ensure a smooth as possible transition," she said.

Health NZ said year-long agreements would remain for some providers due to operational or policy reasons, such as planned service reviews or procurement activity, or that they're based on time-limited funding.

All four health regions were working towards multi-year agreements, it said.

Labour criticises minister but can't make same promise

Labour's mental health spokesperson Ingrid Leary said Doocey had broken a promise.

"It's a dog's breakfast," she said.

"Organisations can't hire staff, retain clinicians, or plan services without certainty, and until those contracts are actually signed, providers are still operating with no certainty. It's mental health service users who miss out."

But Leary did not commit Labour to multi-year contracts, saying the party was yet to release its relevant policies.

"Labour will take an evidence-based approach to what is going to provide the best service for end users and the best value for money for taxpayers," she said.