Super City designers identify $250m in savings

Rodney Hide says he was surprised at the level of savings. Photo / Richard Robinson

The agency designing Auckland's Super City has found savings worth hundreds of millions in a week, says Local Government Minister Rodney Hide.

He said when the Auckland Transition Agency went through the eight Auckland councils' 10-year plans they flagged projects that would not be necessary under the Super Auckland Council.

Mr Hide, who as Act leader has campaigned on reducing costs to ratepayers, said he was surprised at the level of savings.

A spokesman for the agency said savings of hundreds of millions of dollars were found between the draft 10-year plans and the final versions.

The savings include proposed upgrades of council buildings and information technology worth more than $60 million and more than $55 million respectively, and land purchases by Auckland City Council and the Auckland Regional Council worth $134 million.

"In each of these cases the projects have been ring-fenced and cannot proceed without the conformation of the agency," the spokesman said.

"Some of the reductions came from projects being constrained.

"For example, some council building upgrades have been put on hold until the property requirements of the new Auckland Council are resolved."

The agency has also instructed councils to make efficiency gains before the Super City comes into effect in November next year through combined purchases of information technology licensing agreements, resolving cross-council legal actions and applying a "sinking lid" policy on staff recruitment.

Mr Hide raised the savings at a Waitakere Enterprise Business breakfast last week.

Waitakere Mayor Bob Harvey said it was an astonishing amount of cost savings to be found across the Auckland region.

"The ratepayers of Auckland will be delighted or devastated whichever way they try and cut that money."

A financial report ordered by the Royal Commission on Auckland Governance said creating a Super City would cost between $120 million and $240 million over four years and bring savings of between $76 million and $113 million by 2015.

The report, by Taylor Duignan Barry, said the findings were a preliminary and partial assessment based on the Auckland councils' 2008 annual plans.

It estimated efficiency savings of 2.5 per cent to 3.5 per cent of the councils' total spending of $3.2 billion.

Many of the savings would come from shared services.

There would be other savings in water and wastewater, stormwater, community assets and regulatory/planning/governance areas.

The commission also heard how the creation of a mega-city of 2.6 million people for Toronto cost C$275 million and was predicted to bring savings of C$300 million a year.

Eight years later a report found the reforms generated few, if any, savings.

* Super savings

COUNCIL BUILDING UPGRADES

New facade for Auckland City Civic Building $25m

UDC Building (Auckland City) $2m

Kotuku House (Manukau) $12m

Franklin District Council new civic building $18m

Papakura District Council building upgrade $4.2m

Total (rounded up) $62.7m

INFORMATION TECHNOLOGY

Customer first programme (Auckland City) $24m

Technology development (Auckland City) $20m

IT upgrade (Manukau) $8m

IT upgrade (Waitakere) $1m

Financial and document management system (Papakura) $2.6m

Total $55.6m

LAND PURCHASES

Auckland City Council $121m

Auckland Regional Council $13m

Total $134m