Monique Ford / Stuff
Advisors are pushing to take a closer look at how they could provide basic maintenance services in-house despite experts advising against the idea. (File photo)
Experts say bringing services in-house will not help Wellington City Council cut costs, but councilors say their report is ‘disappointing’ and want to take a closer look at the idea.
In late 2021, Wellington City Council called for an investigation into whether it could stop or reduce outsourcing and set up teams to deliver services such as maintenance, roads, garbage, traffic management and water. The internalization of these services would reverse the privatization that took place in the 1990s.
Morrison Low, a management consulting firm specializing in government, presented a slide show to the council on Tuesday suggesting the proposal was not worth it and, in the case of road maintenance, legally impossible.
Fleur Fitzsimons said “it’s a shame the board outsourced the work on outsourcing”. She said she was disappointed with the scope of the report, which she described as a “missed opportunity”.
* Waste, water, roads: Wellington council plans to bring it all in-house
* Wellington Mayor Andy Foster’s council revamps cop criticism of councilors
* Wellington councilors call on auditor general to investigate irregularities in central library privatization
In their presentation, the consultants said that once specialized services such as housing redevelopment, seismic reinforcement, construction of a tiger enclosure at the zoo and quarrying were removed, the only services that the council could provide internally were service planning for cycle paths and urban development.
Those services accounted for just $32 million of the council’s $1.1 billion long-term plan. Based on their general analysis, the firm concluded that it was not worth the board taking the idea any further.
The report was triggered by the revelation that Wellington Water spent $31,000 on a week of traffic management.
Tamatha Paul said it was “strange” that Morrison Low was chosen to complete the report. “Of course, private companies that provide public sector services will tell you that it’s not worth doing the work in-house.”
She wanted the board to take a closer look at integrating services in-house with a longer-term attitude. “It’s really important for our board to start exploring how to provide these services internally and build this capacity.
Fitzsimons thought the scope of the report was too narrow. “It was just about trying to do the next 10 years of work in-house, which is obviously difficult because it will take some time to get up and running. The real benefits of setting this up in-house would be seen in over time.”
Rising construction costs are already a major obstacle to achieving the council’s ambitious long-term plan.
Fitzsimons said the report looked for problems rather than opportunities. She acknowledged that the shadow of CitiOperations still looms large in the discussion – an internal consultancy maintenance department where 150 jobs were cut without advisers knowing.
Paul said “the saddest thing to hear was Morrison Low saying yes, we used to deliver this, but now we don’t have the resources and we’d have to start from scratch”.
“We know this has happened over time, but it’s hard to hear. The initial obstacle is not a reason to stop doing it.
She said there were public good benefits as well as cost savings. The council had demonstrated these benefits for the public good when it moved parking services in-house, which meant it could ensure workers were paid the living wage.
Morrison Low declined to comment.
The presentation outlined other options for the council, including creating a council-controlled organization to deliver services, or a council-controlled commercial organization that would focus on making profits like Christchurch’s Citycare.