30 Jan 2017

Council-owned company defends $16k travel bill

9:02 am on 30 January 2017

Questions are being asked about spending by a Christchurch City Council owned events company on overseas travel.

The company, Vbase, continues to record losses of $1 million to $2m a year.

Christchurch city council

Photo: RNZ / Conan Young

Documents released to RNZ show it spent $16,780 last financial year on international travel, covering everything from airfares and accommodation to meals and taxi fares and taking in destinations including London, New York and Los Angeles.

The biggest spending was by Vbase general manager, Darren Burden.

He said the trips were not a perk and were an essential part of the job.

"We have promoters who bring events to us, they're the clients that we chase. Probably the majority of our major clients are all overseas clients.

"And whilst we try to do a lot of our work through the phone or via email, it is important that we meet with our clients face to face from time to time."

Vbase senior account manager Turlough Carolan spent the second largest amount, including $1383 on three nights at a five-star London hotel while attending a conference there last year.

Mr Burden said this was money well spent as the conversations had there helped secure Christchurch the Bruce Springsteen concert.

"It was a conference which attracted a huge number of overseas promoters and a number of our clients were in attendance so that was a good investment of time.

"And I do know that when Turlough was in London that time, whilst he may have spent those nights in a hotel, he then also spent I think another two or three nights staying in the living room of a friend of his."

Mr Burden said Vbase's losses were largely due to many of the venues it used in the past being closed for earthquake repairs or, in the case of the convention centre, having disappeared altogether.

He said it still made good economic sense for the council to continue to own the company in terms of the wider economic benefit to the city of attracting large events.

"There is an ongoing cost of $1m to $2m per year at an operating level for this company but if that's returning - and I'm plucking figures out of the air here - if it's returning somewhere between $30m to $50m in terms of economic benefit each year, a question you've got to ask yourself is is that a reasonable investment.

"And I guess most people would turn around and say well yeah it would seem to be."

City councillor Yani Johanson said ratepayers were often over-sold on the wider economic benefit of events that can come at a cost to the city.

"Some of the better events are the ones that don't cost a lot of money but are things like national championships, for example, where you bring in a huge number of sports teams across the country to your city.

"So they're not the big high profile glamour events."

The council's new chief executive had done a good job of making sure staff exercised restraint in their spending, he said. While council-controlled organisations such as Vbase were not spending ratepayers' money directly, he believed they should do the same.

Mr Johanson said video conferencing with clients overseas should be used where possible instead of face-to-face meetings.

"Only in exceptional circumstances should we send expensive delegations around the world. And unless there was a very good reason to do it, we should show restraint and it should be the exception rather than the rule."

Vbase is hoping to move from recording a loss to making a profit again next year once the Town Hall is repaired, which will allow it to host events without the added cost of venue hire.

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