Auckland Council budget blowout: New details

NewCore is an IT project to merge the outdated systems which Auckland Council inherited from the eight local bodies that were amalgamated into the "Super City". Photo / Thinkstock

New details about an Auckland Council IT project with soaring costs can be revealed.

A briefing to councillors this morning about the "NewCore" programme was supposed to be held in secret, but was opened to the public after the Herald revealed more money was needed to complete the ambitious project.

The first stage was supposed to go live in May with the project completed by June 2016, but council bosses yesterday confirmed a delay of 12 months.

The project is designed to consolidate the outdated operating systems of the eight local bodies that merged in 2010 to become the Auckland Council and had an approved budget of $71 million.

But a further $60 million is needed because of areas where the "original business case assumptions have not proved correct", as well as an extra $13 million for testing according to the presentation to the Finance and Performance committee.

A further $20 million is needed for other projects to be brought forward with NewCore, bringing the total cost to $171 million - $100 million more than the budget approved for it two years ago.

Chief operating officer Dean Kimpton said there was no change to the overall budget as the extra cost would come out of the $500 million previously budgeted for IT over the next 10 years. But he asked the committee to approve $24 million of capital spending to be brought forward, a recommendation which was narrowly passed after nearly three hours of debate.

Though the merits of the project were not questioned by councillors, concerns were raised about the lack of progress reports and oversight since the $71 million was approved in November 2012. Quarterly updates will now be provided and Mr Kimpton said lessons had been learned from other troubled IT projects, such as Novopay.

Several factors had caused the delay to "NewCore", he said, mainly the technical complexity of amalgamating the systems inherited from the eight previous councils in Auckland - including more than 5000 applications - none of which were suitable as a starting point.

Abandoning NewCore, or even slowing progress down, was not an option as the implementation of the Unitary Plan and council by-laws would rely on the success of the technology.

Councillor Cameron Brewer questioned how so many problems were not identified as part of the 2012 business case, and likened the increased cost to a house renovation.

"It's not about NewCore, it's about the other IT spend. It's like having $100,000 for a house renovation and you want to spend $20,000 on the bathroom - which goes up to $40,000."

Mr Kimpton carried on the analogy: "We're renovating the bathroom and we've found some rotten timber. We've got to fix that, so the we'll put the landscaping on hold."

NewCore Budget

* Original business case - $71m

* "Uncovered complexity" - $61m

* Testing - $13m

* Other - $7m

* Projects brought forward - $20m

TOTAL - $171 million