PSA MEDIA RELEASE
May 26, 2008
For Immediate Use

Auckland City Council Case Highlights Cost of Contracting Out

The millions of dollars the Auckland City Council is paying to former staff who have become consultants highlights the cost to the public of contracting out-work by local government bodies and other public sector organisations, says PSA National Secretary Brenda Pilott.

The Auckland City Council chief executive has overseen payment of $8.7 million over the past four years in consultancy fees to 29 former staff and companies linked to former staff. The council’s spending on consultants is budgeted to soar to $62.2 million this year, up 9.6 per cent on the $56.7 million budgeted.

“The millions of dollars Auckland City Council is spending on paying consultants shows that contracting-out public sector work is an expensive option and it’s the public that foots the bill,”
says Brenda Pilott.

“The costs of contracting-out shows that the public gets value for money from its councils and other public organisations,” says Brenda Pilott.

“Contracting out is in reality privatisation by stealth. The Auckland City Council situation shows that the public pays more when public services are privatised,”says Brenda Pilott.

She says the PSA shares Auckland Mayor John Banks’ concern about staff leaving the council and coming back as private consultants.

“If they had valuable knowledge and skills, the council should have held on to these people,” says Brenda Pilott.

She says in some circumstances, when a highly specialised service is needed, the council may need to seek outside assistance.

“We believe if that’s case the council should set the parameters for seeking outside help, not the chief executive,” says Brenda Pilott. “It’s the council’s job to set policy, especially when so much public money is involved.”

“But it’s clear that public money is far better spent by using the skills and knowledge of public sector staff rather than by privatising public services by contracting them out,” says Brenda Pilott.

The PSA has more than 55,000 members working in the public sector with 5000 of these working in local government.

ENDS

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