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Super city merger and redundancy costs questioned

Contributor:
Fuseworks Media
Fuseworks Media
Rodney Hide
Rodney Hide

Wellington, June 3 NZPA - Discussion about the cost of looming redundancies resulting from the merging of councils in Auckland is premature and unfair to staff who are affected by the changes, says Local Government Minister Rodney Hide.

In a local government Parliamentary select committee today, Mr Hide dismissed claims the cost of the Auckland super city transition was spiralling out beyond budget and questioned a claim that redundancy payments could surpass $45 million.

Labour's Auckland issues spokesman Phil Twyford said a month ago costs of the transition were put at $34 million, then there were reports it had blown out to $112m. He said those costs now appeared to have gone up to $200m "and counting". There was another $22m according to a recent report from the Auditor-General, he said.

Mr Hide said those costs were wrong and government had advanced $94m to the Auckland Transition Agency to take it through to November 1.

The $22m being questioned was part of the $94m, which was being applied in three stages, Mr Hide said.

Of the government funding, $34m was for transition agency expenses, and there was a $60m IT investment.

Mr Hide said decisions about IT systems had committed the new council to spend another $66m after November 1.

He said Auckland councils currently spent about $90m a year on IT, with the doubling up of licensing fees accounting for a big chunk of the costs.

Councils were also spending money looking ahead to next year, but those costs were not additional.

Green MP Sue Kedgley asked for an estimate of savings expected as a result of the merger.

Mr Hide said he couldn't provide that, and the focus was on the smooth reform of Auckland governance. "It's clear there is considerable potential for efficiencies as you remove duplication...I am confident we will have a structure that will be less costly, and transparent with increased accountability than what we've got now".

The initial royal commission set up to investigate a merger had clearly stated there would be cost benefits, he said.

Mr Twyford said he had heard from "well-placed sources" that redundancy payments to council staff around the greater Auckland region could be as high as $47m.

Mr Hide said that was an issue for individual councils to address, and one he wasn't aware of, but didn't believe there was any fact behind those figures.

He said it was still up in the air as to whether some staff would get new jobs in the super city administration and it could only be upsetting for those affected if figures were made public without basis.

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