13% Staff Axed For New Council

in RWC 2011 by Jon C — September 28, 2010 at 2:16 pm | 2 comments

13% of Auckland local body staff have lost their job in the local government re-organisation.

In the ‘months to follow” that will increase to 16%.

Auckland transition agency revealed the details this afternoon:

• The number of staff working for the current councils and their subsidiaries is reducing from 9,430 full-time equivalent employees 12 months ago to 8,207 by 1 November 2010.  That is a reduction of 1,223 employees – or around 13%.
• he number of employees will fall further in the months that follow, taking the ‘business as usual’ size of the organisation to 7,907 full-time equivalent employees by 1 July 2012). That is a total reduction of 1,523 employees – or around 16%
• The annual wage bill for the Auckland Council will fall from $604.0 million per annum (at 1 November 2009) to $537.5m at 1 November 2010 – a reduction of $66.5 million per year.
• This will further reduce as the 300 transition employees leave the organisation, leaving an annual salary bill of $513.0 million by 1 July 2012 – or a reduction of $91.0 million per year on 2009’s figures.
• The number of redundancies is smaller than the reduction in staffing numbers. This is due largely to the non-replacement of staff by councils during transition. Approximately 650 positions are expected to be made redundant. Termination letters are currently being issued by the Auckland Transition Agency (ATA).
• The one-off costs of redundancy payments are estimated to be in the range $15 million to $20 million. The precise figure will depend on the final number of positions being terminated and the individual terms and conditions of employees being made redundant.

Mark Ford, Executive Chairman of the ATA, said that the number of redundancies was lower than the total number of job losses for reasons including the non-replacement of some staff who left during the transition period and other factors including the use of fixed-term contract employees in some circumstances.

Mr Ford said: “The councils, their senior management and the unions have all worked collaboratively with the ATA to ensure our strategies in this area were as effective as possible.

“No one wanted to hire new staff then be forced to make them redundant – so the approach that was taken both minimised the staff and organisational disruption associated with redundancy but – critically – reduced the redundancy payment exposure which would ultimately be shouldered by Auckland ratepayers.”

The PSA national secretary Richard Wagstaff said 13% is too high and good knowledge has been lost.

“The question now is, have they gone too far and will the new council organisations be forced to rehire new staff to fill the gaps?

“The Minister for Local Government is talking up the millions of dollars these cuts will shave off the new council’s wage bill but the reality is you can’t cut hundreds of jobs without losing valuable knowledge and experience.

“It’s always a dark day when job cuts are announced, especially on this scale. It’s a huge loss of skill, experience and institutional knowledge.”

Local government minister Rodney Hide said the annual salary bill of the new Auckland Council will fall to $513 million - saving ratepayers a total of $91 million per annum.

“This is a great result for the people of Auckland.”

The one-off costs of general staff redundancy payments are estimated to be in the range of $15 million to $20 million. “I would note that the ATA has not at this stage included redundancy payments for the CEOs of the councils.”

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