Restructuring costs city councils

The Dunedin City Council might have spent more than $200,000 on severance payments in a year, but figures from the Wellington City Council have tipped the scales.

It was reported last week the DCC - which employed 679 full-time equivalent staff - spent $204,382 shedding four surplus employees as a result of internal restructuring in the financial year to June.

The payments, made in November or December last year, included one of more than $70,000 to a senior manager in the council's information systems department, two others of more than $55,000 and one - to a junior member of staff - of more than $17,000.

The DCC bill was higher than severance payments made in the same period by the Otago District Health Board, an organisation four times the council's size, which employed 2393 full-time equivalent staff and spent $122,383 terminating the contracts of six employees.

The DCC bill was also twice as high as that paid by the Auckland City Council, New Zealand's largest, which employed more than 2350 full-time equivalent staff and made nine payments totalling $102,667, a spokesman said.

However, in response to Otago Daily Times questions, WCC staff have since confirmed the council - which employed about 1500 full-time equivalent staff - spent just over $600,000 shedding 30 employees in the same period.

WCC spokesman Richard MacLean said when contacted the job losses were the result of restructuring and belt-tightening during the economic downturn, mainly within the council's strategy and policy and customer service divisions.

"It's higher than a typical year, it would be safe to say . . . [but] it's not considered extraordinarily high.

"The majority of staff at the [Wellington] council have redundancy agreements written into their contracts. It's all just part of being a fair employer. If people lose their jobs they can't be sent down the road with nothing."

The figures meant each WCC staff member to lose their job received on average about $20,000, well below the DCC's average spend of $51,095.50.

However, DCC chief executive Jim Harland said he believed the Wellington figures put the DCC spend in context.

chris.morris@odt.co.nz

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