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Concerns Over Auckland Council Transition Costs Unfounded

Thursday 4 November 2010, 5:57PM

By Rodney Hide

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AUCKLAND

New Auckland Council Deputy Mayor Penny Hulse’s concerns that the new Council’s transition costs are unclear and potentially ‘huge’ are simply unfounded, Minister of Local Government Rodney Hide said today. 

“Prior to November 1, the Government approved $94 million for the transition to the new Auckland Council, which consisted of the Auckland Transition Agency (ATA) costs and the costs for IT.  Although the numbers are not yet finalised, I have been assured by the ATA that it is likely it has come in under budget, Mr Hide said.

“Post November 1, the Auckland Council’s planning document includes a net budget for further transition costs of approximately $100 million for the period from 1 November 2010 to 30 June 2011.

“The one-off redundancy costs - estimated by the ATA to be between $15 million to $20 million – are included in this consolidated figure and are more than offset by the $64.5 million annual reduction in total salary costs of the new Auckland Council.  This saving will increase to $91 million per year by July 1 2012. 

“All the information which outlines the net impact of transition is shown in the Auckland Council’s Planning Document, which is available on its website: www.aucklandcouncil.govt.nz/planningdocument

“In addition, economists Taylor Duignan Barry - who previously reported to the Royal Commission on Auckland Governance - have identified further efficiencies that the new Council could deliver which equate to realised and potential savings of $175 million to $195 million annually.

“If the Council follows their recommendations this would result in a projected rates reduction of 10-11 percent in 2015/2016 in comparison to what rates would have been if the amalgamation had not taken place.

“Despite Mrs Hulse’s claims, the new Auckland Council is well equipped to deliver substantial savings to the people of Auckland.  What is clear however is that the delivery of these savings to the people of Auckland is very much dependent on the actions of the new Council,” Mr Hide said.