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2 October 2013

Hundreds of millions in potential savings for Auckland ratepayers

Auckland City should follow the initiative of the Tasman District Council to bring core council services back in house with potential savings of hundreds of millions for ratepayers.

This small council at the top of the South Island has found it is cheaper and more efficient to employ staff directly to collect rubbish, manage recycling, fix roads, provide water and wastewater services and maintain rivers than use private contractors.

The TDC says the build-up of savings to ratepayers will reach around $3.6m by year five.

As well as saving money the TDC says it will mean a better service for ratepayers as problems can be dealt with more quickly. It also cites greater control, improved planning and stronger staff commitment as some of the key advantages of the change.

“Translating this to Auckland means the potential to save hundreds of millions each year for Auckland ratepayers – alongside improving the delivery of council services.

“This is an important part of the answer to ever rising rates.”

“Auckland Council should have done an independent cost-benefit analysis comparing private contractors to directly employing staff years ago.”

“However the council is now run by private sector appointees who are allergic to employing people directly – even if it means saving money for ratepayers.”

“On Day 1 Minto for Mayor would initiate an analysis of the contracting used by the council with a view to bring services back in house and save hundreds of millions in the process.”

Auckland Council runs approximately 5000 separate contracts and it’s certain that huge savings, potentially hundreds of millions a year, can be made by employing staff directly.

The TDC experience matches research from the Project on Governmental Oversight (POGO) which has found that private contractors cost US states almost twice the amount they would pay if they employed people directly while at Federal level the US government pays as much as six times more for private contractors.

Tasman District Council has seen the benefits of direct employment. Minto for Mayor will bring the same benefits to Auckland ratepayers.

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