Consultants cost DCC $32m

Paul Orders
Paul Orders
After spending more than $30 million on consultants in three years, Dunedin City Council staff are under pressure to slash spending on outside help, it has been confirmed.

Figures released to the Otago Daily Times this week show the council spent $32.59 million on consultants, within Dunedin and further afield, over the past three years.

Annual spending was dropping steadily, down from $13.34 million in 2009-10 to $8.66 million in 2011-12, a trend council chief executive Paul Orders was keen to see continue.

"We don't need consultants to tell us the time.

"Consultants should be used only in the absence of capability and capacity among DCC staff. That's a rule of thumb for me."

Paul Orders
Paul Orders
The figures were released following an ODT request under the Local Government Official Information and Meetings Act 1987. They covered the financial years beginning in 2009-10 and spending on consultants involved a range of council capital projects, including the Regent Theatre, Otago Settlers Museum and Dunedin Town Hall upgrades.

They also covered the use of consultants within day-to-day council operations, and to cover spikes in workloads, such as the Auckland company asked to help with a sudden rush in building consent applications earlier this year.

The operational side had had the biggest decrease in spending, down by nearly half, from $6.98 million in 2009-10 to $3.78 million in 2011-12, the figures showed.

Spending on consultants for capital projects was also down, from $6.35 million to $4.87 million during the same period.

Mr Orders said the overall bill in part reflected the number of capital projects the council had committed to, and "decisions made before my time".

"My concern is the consultants expenditure is coming down. That's the primary issue, and that shows significant difference."

The steady reduction reflected pressure on budgets and the drive to find savings, and that was expected to continue as capital projects were completed in coming years.

Council staff had been given the message to cut costs while protecting service levels, including the use of consultants, during the long-term plan process which began last year.

That was expected to continue as part of the next annual plan budget process, he said.

"The trend is moving in the right direction. For an organisation like the DCC, facing financial pressures, the squeezing of consultancy expenditure is a basic step.

"Our operational costs are under close scrutiny, and it is incumbent on managers to restrain spending on consultants whenever possible."

Council staff have been asked to find millions of dollars in further savings to achieve a targeted rates increase of no more than 4% for 2013-14, followed by 3% in 2014-15, having already helped achieve a 5% target earlier this year.

At the same time, staff numbers themselves were dwindling as part of the savings drive, down from 681 full-time equivalents (FTEs) last year to 665 earlier this year.

Mr Orders said the loss of staff did not lead to greater reliance on consultants, as might be expected, because the cost-cutting reviews had led to an increase in productivity within the organisation. Despite that, it would still be more economic to use consultants rather than recruit additional council staff, to provide in-house expertise in some cases.

"But you always do that in the context of what added value is that external view going to provide to the organisation, in terms of quality of service delivery or in terms of savings," he said.

"That's the philosophy we're trying to apply."



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