The number of staff who will be employed by the new Auckland Council and its subsidiaries is outlined today (Tuesday, 28 Sept 2010) by the Auckland Transition Agency.

Information has been prepared which shows the total number of employees in the old structures (eight councils, their council-controlled organisations (CCOs) and related entities) and compares this with the numbers to be employed by Auckland Council and its CCOs on Day One – November 1, 2010.

This Day One number will fall further as an estimated 300 employees on transition-related and project work leave the organisation prior to the start of the second full year of the new structure on 1 July 2012.

The attached tables show:

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%.
The 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, paid tribute to council staff and their representatives for the way in which they had engaged in the transition process.

“This is a large and complex restructure which continues to involve many people in significant change,” he said. “I have been hugely impressed by the way in which council staff have dealt with a period of great uncertainty.

“Within the next few days all existing council employees will have a far greater level of certainty and the clearest possible idea about their future employment options within the new structure.”

Mr Ford 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.

“I am confident that the new structures being put in place will be fit for purpose and will equip the new council and its subsidiaries so they can deliver in line with the expectations of the people of Auckland.”

Full-time equivalent positions

1 November 2009

1 November 2010

(Day 1)

Reduction

(1 Nov 2010 v 1 Nov 2009)

Redundancies (estimated)

1 July 2012

(“business as usual”)

Reduction

(1 July 2012 v 1 Nov 2009)

9,430

8,207

1,223

650*

7,907

1,523

Dollars

1 November 2009

1 November 2010

(Day 1)

Reduction

(1 Nov 2010 v 1 Nov 2009)

Redundancy costs (estimated)

1 July 2012

(“business as usual”)

Reduction

(1 July 2012 v 1 Nov 2009)

$604.0m

$537.5m

$66.5m

$15m - $20m*

$513.0m

$91.0m

Notes:

The 1 November 2009 FTE totals comprise permanent, part-time and vacant positions in the following entities: Auckland City Council; Auckland Regional Council; Auckland Regional Holdings; Auckland Regional Transport Authority; Auckland Regional Transport Network Limited; Auckland Transport Infrastructure Ltd; Enterprise Franklin Development Trust; Enterprising Manukau; Enterprise North Shore; Film Auckland; Franklin District Council; Manukau City Council; Manukau Water; Manukau Building Consultants Limited; Metro Water; Manukau Leisure Services Limited; North Shore City Council; NSC Holdings; Papakura District Council; Rodney Economic Development Trust; Rodney District Council; Sea + City Projects Limited; The Edge; Tomorrow's Manukau Properties Ltd; TMPL (Flat Bush); Tourism Auckland; Waitakere City Council; Waitakere Enterprise; Waitakere Properties Limited; Watercare Services Limited.

The 1 November 2010 FTE totals comprise permanent, part-time and vacant positions in the following entities: Auckland Council: Auckland Council Investments Limited; Auckland Council Property Limited; Auckland Tourism, Events & Economic Development; Auckland Transport; Regional Facilities Auckland; Watercare Services Limited; Auckland Waterfront Development Agency.

* The number of redundancies refers to positions (not FTEs). It is subject to change as some employment offers are made and accepted or rejected. The total costs of redundancy will depend on the final number of positions made redundant and on individual circumstances and exclude chief executive redundancies which may be subject to individual contracts. The range given above is indicative only at this stage.

Structural changes

	1 November 2009	1 November 2010
Tier 1	13	8
Tier 2	88	42
Tier 3	403	176
Tier 4	1523	614
Tier 5 and below	7403	7367
Totals	9430	8207

The “business as usual” position

Approximately 300 further reductions in FTE are expected prior to 1 July 2012 in the following areas:

Accounting Services (single rates / implementation of additional SAP functionality)
HR (standardisation of systems and processes)
Planning (rationalisation of legacy planning requirements / reduction of policy)
Projects (end of Rugby World Cup)
Property (standardisation of systems and processes)