20 Nov 2010

New Auckland Council costs rise

1:04 am on 20 November 2010

The cost of running the new Auckland Council has risen despite the shedding of more than 1200 jobs.

At the end of its work, the Auckland Transition Agency claimed there would be net savings by next June of $37 million from merging eight councils into one from 1 November.

However, figures from the new council show that even after cutting about 1200 jobs, the merger costs alone will add nearly 1% to rates.

Significant savings and a forecast rise in rates of 3.9% will be possible only if a further $48 million in savings can be found by next June.

The council says it is working on cost-cutting, including the phasing out of old IT systems.

Without any further savings, rates next year would rise by 7.3%.

Minister confident of savings

Local Government Minister Rodney Hide says the agency was conservative in estimating potential savings in overheads and procurement.

He is is still confident big savings can be found from the merger.

Mr Hide expects the council will find new cost savings in excess of $48 million.