Engineering concerns about NAG model

Dr Jonathan Leaver

An associate professor in civil engineering at Unitec and Omaha resident has underscored concerns should North Rodney leave Auckland and become an independent unitary authority.

Dr Jonathan Leaver said smaller unitary authorities tend to lack engineering expertise and suffer from cronyism and corruption. However, his views are strongly contested by the Northern Action Group (NAG), which is championing an independent Rodney.

Dr Leaver’s remarks echo a controversial independent consultant’s report released last month, which predicted rates would need to increase by 48 per cent to cover budget deficits if North Rodney were to separate from Auckland.

The Morrison Low report also said there would likely be significant capability and capacity issues for a unitary authority that would have about half the population of the smallest current unitary authority in NZ.

Dr Leaver said larger authorities, such as the current Auckland Supercity, had a significant pool of engineering talent, able to give much better expert advice on the nature of work required to solve problems.

“As we have seen at Mangawhai with the sewage treatment issues there, if you have a small body of engineering expertise in a unitary authority, then you don’t have the level of risk management that you would in a larger authority,” Dr Leaver said.

Back in 2013, the Auditor General blasted Kaipara District Council’s handling of its Mangawhai sewerage scheme saying the council was “out of its depth” in handling the project and did not fully understand its complexity.

The Kaipara District Council borrowed $63 million to cover ballooning costs and hiked rates by an average of 31 per cent in an attempt to pay the bills.

Dr Leaver said another advantage for larger authorities was that they could also group many individual engineering projects together and get a better price from contractors. Smaller authorities with fewer projects could not achieve the same economies of scale.    

He added there was more chance of corruption occurring in small unitary authorities. He said there was a higher probability of underhand collusion between parties who knew each other in a small district where there was a limited number of places where people socialise. In a larger authority it was more likely the contract administration would be more removed from those bidding for the work.

“All these things combined present quite a high risk for ratepayers where they are looking to get the best value for money from their rates,” he said.

But Bill Townson, chair of the Northern Action Group, said Dr Leaver was wrong on every point.

He said councils could readily outsource their specialist engineering requirements so that small councils had the same access to expertise as large ones.

He added that in a small council in-house engineers were likely to have a much more intimate knowledge of their area and its history, all of which could be brought to the table when larger and more tricky projects were being discussed with outsourced expertise.

Mr Townson also dismissed the idea that larger councils could get a better deal on contracted services.

He said bigger councils favoured bigger contractors who charged more for work in rural and coastal areas than cheaper local contractors. The cheaper local contractors cannot bid on larger council contracts because they don’t have the scale to undertake region-wide work.

He said Dr Leaver’s views reflected a mistaken belief that economies of scale apply universally and without limit.

“Most people do not handle complexity well, and organisations get more complex and less efficient as they get bigger,” he said.

Mr Townson said there was no evidence to show that corruption was more or less of a problem in smaller councils. If it occurred, it was more a case of bad management and lack of accountability rather than a reflection of the size of the council.

He said local councils actually had better accountability – better alignment and visibility of projects with ratepayers.

“Ratepayers automatically become fierce watchdogs of council and its staff’s practices. It is much easier to hide misdemeanours in a large organisation than a small one,” he said.


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