The Watchdog

Keeping citizens in the loop

The Aucklander : ‘Super-city splurge’

Super-city splurge

Edward Rooney | 12th May 2011

Photo / Nz Herald

As Auckland Council reaches the six-month mark, Edward Rooney investigates the millions of dollars being poured into the private sector to prop up basic council services.

Split Enz sang of spending Six Months in a Leaky Boat. It seems Auckland Council has spent six months leaking money to contracting consultants.

Auckland Council is paying almost $2 million a month to outsource planning work as it struggles to keep pace – even during a slow period of construction.

The Aucklander sought information on the amounts consultants had billed Auckland Council since November 1 last year.

The council is unable to provide detailed information and asked The Aucklander for almost $3000 to pay for a person to spend a week compiling an itemised account of the work it has contracted out.

However, from what we can glean:

Since taking up the new administration, the value of contracts let out until March 31 this year in the planning department comes to $8.75 million. For a five-month period that’s an average of $1.75 million a month.

Other departments also letting out significant contracts are regulatory ($3.02 million) and human resources ($442,000).

Mt Eden resident Vivien Fergusson is aghast when The Aucklander tells her the cost of consultant planning.


“That’s totally spectacular,” she says.

Mrs Fergusson is particularly critical of planning processes by council. She believes successive councils have used rates money to enforce the degradation of her area for the past 30 years.

“The council uses our money to spoil our city,” she says.

Deputy mayor Penny Hulse is fuming about the cost of outside consultants.

“Look, it doesn’t surprise me, to be honest,” she says. “I do think we need to hold [Local Government Minister] Rodney Hide and the Auckland Transition Agency to account for the rather large costs we are having to bear. We’re over 100 planners short.”

Previous councils across Auckland had about 10,000 staff which the Auckland Transition Agency attempted to reduce to about 8500 positions. “We are sitting at around 7800-ish so there is still a shortfall of staff,” Ms Hulse says, adding she believes the planning department is where the shortage is being felt the most.

Council chief planning officer Roger Blakeley defends the use of consultants, saying there is a wide range of complex activities requiring specialist skills.

“It makes commercial sense to bring in external expertise when it is required rather than permanently increasing staff numbers,” he says.

“We constantly review the balance of staff and consultants to ensure the mix is right and to ensure that projects and services are delivered efficiently and effectively so that Aucklanders get value for money from their council.”

Despite the $8.7 million injection of work from consultants over the past six months, Auckland Master Builders Association president Darrell Trigg says builders report that little progress has been made in getting planning permits from the council.

“Our members are saying one of the frustrations is still the timeline for getting projects under way,” he says.

“I’m not sure if this new council has had time to bed in yet but if there was a magic wand to wave and provide a solution our members would be very happy, put it that way.”

Builders are keen to get the word out that they are not the ones holding up the works.

“It’s like a well-worn record now that no one seems to be listening to,” he says. “Once we get to the actual building, that’s the easy part.”

Statistics NZ announced last week the number of building consents issued in Auckland for the year ended March was 3579 units, down 1.4 per cent on the previous year. The trend for the number of new dwellings authorised, including apartments, has fallen steadily since April last year to the lowest level since statistics on them were first compiled in 1982.

Mayor Len Brown told The Aucklander in January it would take another six to 12 months for the full costs of the transition to be known. Ms Hulse now says it may take longer. “Costs are still being absorbed, as you can see by the figures you have obtained.”

She says the council is being criticised for a 4.9 per cent increase in rates while having to grapple with transition costs. “It’s like the movie Men In Black. It’s like people have had a penlight pointed in their eyes and they’ve forgotten that we’ve been saddled with all these costs.

“We’re in here just trying to make this damn thing work.”

The most recently released figures for the transition costs were a $56 million bill to support day-to-day computerised functions, such as human resources, payroll, the financial system and purchasing.

In March the set-up costs for the Super-city were estimated at $200 million. Ms Hulse said she was criticised for claiming the transition costs would be “upwards of $200 million”.

“I was pooh-poohed for that but I’m prepared to stick by it. Rodney Hide has been saying $90 million but it’s going to be a lot more than that. We need to sheet this home to the ATA and Rodney Hide.”

AUT Public Policy Institute’s director David Wilson said the new council was never going to deliver great savings, especially once the loss of expertise and institutional knowledge was factored in. “This is another example really of the kinds of hidden costs that result from a massive restructure,” he says. “Any talk of cost savings prior to the restructure are laid bare by this sort of information.”


May 15, 2011 - Posted by | Fighting corruption in NZ, Transparency in Govt spending

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