Hide keeps distance from IT blowout

Rodney Hide. Photo / Brett Phibbs

Super City reporter Local Government Minister Rodney Hide says there is nothing contradictory about a promise last year to build a new Super City computer system for $126 million and the final bill of $576 million.

Writing in the Herald in June last year to "get a few facts on the table", Mr Hide said there was a $60 million upfront investment for information technology and a "further $66 million on IT to finish the job post November 1 (when the Super City came into being)".

Yesterday, Mr Hide and Auckland Transition Agency boss Mark Ford distanced themselves from the projected $576 million bill to complete a new computer system, saying their job was only to get a basic system in place for the Super City on day one.

At no stage in the Herald article or in a May 27, 2010, press release on transition costs did Mr Hide mention the long-term IT costs, which were presented to Auckland councillors behind closed doors this month.

Making matters worse for ratepayers, the council has only budgeted $150 million for the $450 million cost over the next eight years. This has left a $300 million shortfall that will have to be borrowed or paid for from rates at a time of economic hardship.

Last night, Auckland Mayor Len Brown also distanced himself from the huge costs.

"I am unsure of what the minister expected the 10-year costs would be. Certainly in the first two years around transition, we have managed to keep costs in line with what was forecast," Mr Brown said.

The $576 million cost, revealed by the Herald last week, led to more feedback after IT commentator Russell Brown raised it on his Public Address blog.

"There were warnings last year ... that a nasty surprise was developing in the process of merging council IT systems for the new Auckland Super City; that long-term costs were being buried by the Auckland Transition Authority to make the process look better.

"Even if we are charitable and assume that this is all simply the cost of equipping a robust unitary authority, it is not what we were told would happen," Mr Brown said.

He had earlier blogged that the IT problem had been described to him as "the Auckland Council as a leaky building" - it looks fine on the outside, but is rotten underneath.

Former regional IT head John Holley said no one was being held accountable for the cost blowout, which had been predicted by industry people based on the lack of an IT strategy by the transition agency.

Mr Holley said the $66 million figure to complete the Super City computer system was obviously "bollocks".

Mr Hide quoted a transition agency report to Parliament saying it was a "magnificent achievement to put in a new platform" on day one but the Auckland Council was now faced with the challenge and the cost of building an IT system for the long term.

Said Mr Ford: "It was always clear that further spending was likely at a later stage, but the level of future expense, timing and prioritisation are issues for the council to decide."

Auckland Council chief executive Doug McKay said there was no cost blowout with IT.

He said the $450 million figure in the budget was for IT spending over 10 years, whereas the $126 million figure used by Mr Hide was for a day-to-day system developed by the transition agency and implemented over two years.

The projected $450 million over the next eight years, he said, would go into the council's long-term plan next year and be subject to consultation.

Mr McKay said the council would be "all ears" to IT experts and all projects would include a business case.