The Tainui Whanau Ora collective says funding decisions for the social service scheme should have stayed with the lead Maori government department.
The Minister for Whanau Ora, Tariana Turia, announced on Tuesday, responsibility of awarding contracts to the scheme will shift from Te Puni Kokiri to the private sector. Three non-government organisation commissioning agencies will be set up in the North Island, South Island and a Pacific agency.
The social service scheme funds providers to address the needs of whanau as a whole rather than through several different agencies.
Tainui Whanau Ora collective chairman Hori Awa says he wanted to see an integrated system with all agencies and does not see the value in breaking it up into three areas.
Under the changes, a Crown-iwi partnership group made up of senior ministers and iwi chairs will also be established, and the current regional leadership groups will be wiped.