'A contractor is not a charity': Wellington campaign launches to reduce council outsourcing
Wednesday, 6 May 2026
Wellington City councillors will tonight be presented with a report calling for a drastic reduction in the use of contractors ‒ including one company ultimately owned in the Cayman Islands.
“We are now forty years into an economic experiment that has severely eroded public service capacity and raised costs for ratepayers,” the 19-page Unions Wellington report claims.
“By outsourcing public services for decades, the Wellington City Council has lost expertise and capacity and is now forced to rent back its lost knowledge, skills and assets from high-priced firms whose primary objective is value extraction rather than public service.”
Contractor controversy recently arose at council-owned Wellington Water, where it was discovered poor practices meant contractors could dramatically over-charge with the costs ultimately borne by rate-payers.
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Public outrage over contracted parking wardens saw the council bring them back in-house in 2014.
Now Unions Wellington, in its Wellington Works report, is calling for many more services once provided directly by council employees to come in-house, starting with “low-hanging fruit” such as engineering, non-litigation legal services, cleaners and security.
Making this push realistic is the fact that mayor Andrew Little ‒ elected with an overwhelming majority ‒ campaigned on looking at bringing services in-house when it made financial sense. Deputy mayor Ben McNulty then passed a cost-saving plan that asked council staff to look at in-housing traffic management.
Unions Wellington ‒ which last term successfully lobbied to stop the council selling its shares in Wellington Airport ‒ threatened legal action when the council was looking this year to start new contracts for cleaning services rather than considering bringing them in house.
The Wellington Works report, which will officially be given to councillors at an event tonight, acknowledged that some of its estimates were best-guesses “due to the lack of public information and council contracts”.
But it said the council could save significant money at a time Wellington City rates were surging.
“A contractor is not a charity; their bid must include a profit margin ‒ typically ranging from 10 to 20% ‒ to satisfy shareholders and owners,” it says. Decades of contracting meant the council had lost in-house knowledge of what services should cost, leaving it open to “price gouging”.
It highlighted Wellington’s under-construction sludge plant, which has blown out in cost from $200m to $500m.
“The fact that the council is budgeting nearly $8.5 million just for external project management and $8 million for financial and commercial management on a single project indicates a profound lack of internal oversight,” the report says.
“These are not specialist engineering tasks; they are core management functions that have been privatised at a premium.”
It went on to highlight that Envirowaste ‒ contracted by the council for waste services ‒ was ultimately owned by a “shell company” in the Cayman Islands.
Unions Wellington co-convener Sabina Rizos-Shaw said the report was a “blueprint” for how the council could in-source services.
“We’re excited to see what the mayor, councillors, and community make of it.'