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Home / New Zealand

Auckland Councillors not told for months of IT blowout

Bernard Orsman
By Bernard Orsman
Auckland Reporter·NZ Herald·
5 Mar, 2015 04:00 PM3 mins to read

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The council yesterday released documents under the Official Information Act on the NewCore project, which has soared in cost from $71 million to $157 million. Photo / Jason Oxenham

The council yesterday released documents under the Official Information Act on the NewCore project, which has soared in cost from $71 million to $157 million. Photo / Jason Oxenham

Officers knew of problems with NewCore programme that pushed cost up to $157m.

Auckland Council officers were aware of big problems with an IT project for months before they informed Mayor Len Brown and councillors, official documents show.

The council yesterday released documents under the Official Information Act on the NewCore project, which has soared in cost from $71 million to $157 million.

Last November, the Herald revealed that the NewCore programme, designed to consolidate the computer systems of the eight councils that merged in 2010 to become the Auckland Council, faced a budget blowout.

The following day, the council revised the original budget to $157 million and pushed back the 2016 start date to 2017.

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The council intends to absorb the extra cost within a $500 million IT budget over 10 years.

Documents show that in December 2013, an independent review by EY (formerly Ernst & Young) recommended delaying or rescheduling the delivery of NewCore from the design phase to the build phase.

By May 2014, alarm bells were truly ringing in a "deep dive ... governance review", also conducted by EY.

Among the concerns were that programme director Glenn Bittle was too involved with the detail to devote sufficient time to the bigger macro issues, suspected poor performance of some NewCore programme staff, no formally defined roles and accountabilities for the programme, and timelines slipping.

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"Too many quasi-decision makers are involved and issues requiring resolution suffer from a lack of active, timely resolution while ownership is debated and the issue is rearticulated numerous times," said the EY report, which recommended a change to the governance structure.

Council chief operating officer Dean Kimpton, who has been given the job of "resetting" the programme, said the alarm bells started to ring in late 2013.

Around March 2014 officers went into a "pause" phase to slow down work.

"We recognised we had issues. My job was to come in ... identify those issues, work with EY and the leadership team to get it sorted and re-baseline that project," he said.

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In November 2012, former chief finance officer Andrew McKenzie and IT manager Mike Foley assured councillors the total cost of the NewCore programme was $71 million, made up of $58 million of capital works and $12.9 million operating costs.

A slideshow presentation to councillors described NewCore as a "key part of our journey towards delivering the value of one council and a transformed customer experience".

This was the last formal briefing councillors had on the IT programme before they were asked to increase the budget in November last year.

Mr Kimpton said Mr McKenzie provided a verbal briefing to councillors on the need to adjust the budget for NewCore in about September last year.

Mayor Len Brown said: "It's clearly not unheard of for large IT projects to become more complex as they progress.

"While, in hindsight, an earlier briefing to councillors would have been appreciated, I have complete confidence that this project is now running on time and within budget and in the people working on it."

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Who knew what, when?


November 2012: Councillors assured NewCore programme would cost $71m
December 2013: EY recommends delaying the build phase
May 2014: Alarm bells ring over governance
September 2014: Councillors receive verbal briefing of need to adjust budget
November 2014: Herald reveals budget blowout and council revises budget to $157m.

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