Timaru councillor questions why meeting on consultant spend has not happened
Thursday, 22 June 2023
A failure by Timaru’s council boss to deliver a report on the amount spent on consultants and contractors as requested, has delayed a workshop planned to bring councillors up to speed on the matter before they sign off on the district’s Annual Plan next week.
In March, mayor Nigel Bowen asked councillors to support him in working with chief executive Bede Carran to conduct an urgent review of his council’s spending on contractors and consultants amid “massive escalations”.
Following that, the council agreed to schedule a workshop to bring councillors up-to-speed prior to the finalisation of the Annual Plan on June 27.
As of Tuesday, that workshop had not been held – prompting councillor Stu Piddington to ask why during a council meeting that afternoon.
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In response, Bowen acknowledged it was hoped they would hold the workshop prior to the annual plan, before deferring to chief executive Bede Carran.
Carran said they had started work on looking into the cost of consultants and professional contractors but it had not been finished.
“We haven’t delivered it. I freely acknowledge that. It was anticipated and expected.”
He said they were trying to elucidate what costs had been incurred due to the need to bring in specialist outside expertise on projects, and what costs were related to the need to bring in contractors to plug staffing shortages.
“We want to make sure we divide, or define between that.”
Carran said the finance team play quite a part in providing that information, and they had “fully anticipated that the annual report would be finished by the end of that month”.
In explanation, Carran said that team was “stretched” in terms of capacity with an increased workload.
“It’s not looking to seek for an excuse, it’s looking to provide context. We are working on it.”
Carran then offered to produce something for next week, but warned it would be a first cut – rather than a comprehensive report.
Bowen said it was important all elected members be part of the conversation around the information once it was provided.
“What we will get out of it will still be the same whether it is now or July … I would like everyone to be here for that,” he said referencing some planned absences.
Bowen suggested they discuss the matter next week, and then plan a full discussion at a later date when all councillors could be present.
When Bowen first asked for the work to be undertaken, he said he wanted to analyse whether the best models were in place, including looking into whether contracting work out was the best option or if in house would provide ratepayers with more bang for their buck.
He also wanted the review to include procurement processes, and to look into whether it is better to employ skilled staff rather than using consultants.
Bowen said while the review may not bring about any changes, he believed the time was right to take a closer look at spending.
His request came six months after information obtained by The Timaru Herald, under the Local Government Official Information and Meetings Act (LGOIMA), revealed the council had spent almost $34 million over the past five years on consultants.
From 2018-2020, the amount spent increased at a steady rate of about $1m per year with $3.43m spent in 2018, $4.54m spent in 2019 and $5.39m in 2020.
However, the amount spent in 2021 was almost double that of the previous year – with $10.37m paid. In 2022, that dropped slightly to $10.2m.
In 2018, the amount spent on consultants amounted to 7.23% of the rate take projected in the 2017/18 annual plan ($47.49m). In 2021, the amount spent equated to 19.37% of the projected rate take in the 2020/21 annual plan ($53.56m).
The council hired the services of 160 consultants in 2018, 166 in 2019, 201 in 2020, 231 in 2021 and 247 in 2022.
The total number of different consultants used by the council over the five-year period numbered 214. The top 10 consultants were paid $19.5m over the five-year period.
The highest paid was Canadian owned global engineering consultancy WSP New Zealand Limited, which previously traded in NZ as Opus, with $8.7m paid for engineering services and design.
In March, Carran, who defended his council’s spend on consultants when the five-year figures were released estimating it to be in line with most organisations, said the council already had a process in place, which sees it look at the delivery of services and activities every six years.
However, he said a more sophisticated financial reporting system would mean those could now be further investigated.