7 Apr 2020

Covid-19: Auckland Council puts external contracts on hold

5:53 pm on 7 April 2020

Auckland Council is cutting all non-essential work to mitigate the financial impacts of Covid-19.

Auckland Mayor Phil Goff.

Auckland mayor Phil Goff. Photo: RNZ / Dan Cook

The council announced this afternoon external contracts for non-essential work had been paused over the past two weeks to keep costs down.

Chief executive Stephen Town said contract work did not include employees of council on fixed-term contracts.

He said the cuts would affect an unknown portion of the council's 1100 contingent workers involved in consultancy and project management services for capital works projects, event operations, non-essential asset maintenance, fleet servicing, and internal business improvement projects.

"Workers who are affected may be eligible for the government's wage subsidy package, depending on their individual circumstances.

"In addition, all permanent staff recruitment is on hold until further notice, and under-utilised permanent staff will be redeployed into roles currently filled by contingent workers.

"This will help us to manage costs in this unpredictable period, while retaining the necessary capacity and skills to restore services when we move into the recovery phase and beyond."

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Auckland Council has developed criteria for approving exceptional circumstances where non-essential expenditure may still be required.

These could include expenditure which relates to legislative compliance, completion of projects with substantial sunk cost, property transactions due for settlement, or the completion of in-flight procurement processes for outsourced services.

"We know this will be distressing news for some of our external contractors and contingent workers during what is an already challenging time. It's not a decision that has been made lightly.

"These are valued partnerships and hard-working individuals who have been committed to serving Aucklanders and to making our city a great place to live," Town said.

Auckland mayor Phil Goff said Covid-19 lockdown had significantly reduced the council's rates and non-rates revenue.

"We do not have the option of borrowing more, nor putting rates up other than what has already been outlined.

"We will maintain critical services and continue to invest in much needed infrastructure that will also stimulate jobs and recovery. However, we have to prune back desirable but non-essential expenditure."

Goff said the council could not continue to pay temporary workers, consultants or contracted workers when it could not provide work for them.

"It's a tough but necessary decision we simply have to take."

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