Auckland mayor Phil Goff has taken the unusual step of directing the city's economic development agency to conduct a clean-sheet assessment of what it does or face an external review.

Photo: RNZ / Diego Opatowski

The move has some council insiders questioning whether the mayor has overstepped his mandate, and revives tension with an agency he clashed publicly with soon after taking office.

In a letter written to Auckland Tourism, Events and Economic Development (ATEED) chair David McConnell, Mr Goff proposes the agency's board launch a "first principles" review which in effect asks the agency to justify everything that it does and how it operates.

"We would much prefer this approach, to the alternative of commissioning external parties," wrote Mr Goff.

Mr McConnell is overseas, but in a short written statement said his board had already asked senior management to start a strategic review in the lead-up to the council setting its 10-year budget next year.

The letter, in effect, also asks ATEED to justify work it does which may overlap with work done by central government agencies such Callaghan Innovation.

No one will comment other than in short written statements, but RNZ understands council insiders have raised eyebrows at the mayor's almost solo approach to directing ATEED.

The letter is co-signed by councillor Ross Clow, who chairs the Finance and Performance Committee. He did not wish to comment.

Council sources spoken to by RNZ have called the mayor's action unusual, and possibly overstepping his mandate in acting without reference to a wider group of councillors.

It's the second major intervention by Mr Goff in ATEED's work.

Mr Goff clashed with the agency almost as soon as he took office in November last year, publicly ordering it stop spending money on a proposed global market and talent attraction programme.

ATEED had worked on the $500,000 project with the backing of the council, prior to Mr Goff's election.

A firmly worded letter from Mr McConnell to the mayor, seeking clear direction on what should happen to the almost-completed project, remains partially withheld by the council.

RNZ obtained a redacted version in March this year, and the Ombudsman's Office is still considering an appeal by RNZ over the withheld content.

At the time Mr Goff told RNZ he had made the call on the project before being fully briefed on it.

Mr Goff was too busy to be interviewed by RNZ on his recent letter asking the agency to reassess its operations, and did not reply to written questions.

In a written statement, he said he had "directed ATEED to take a hard look at its focus, and its efficiency and effectiveness".

"I have asked ATEED to identify whether and where there may be duplication with other agencies from central government, and to set out the core activities that deliver real value for Auckland that they need to focus most on."

Lifting Auckland's economic performance was a key motivation behind the amalgamation of Auckland eight local bodies in 2010.

However of the five main council controlled organisations set-up to run at arm's length from the politicians, ATEED is the one that has attracted the most, critical attention from Mr Goff.

Mr Goff is not allowing the agency's board to prepare one view of its own future, but asks it to prepare options that "we" would work with ATEED on refining.

Some of ATEED's work is already being examined in one of a series of "value for money" reviews being conducted by the council in line with a statutory requirement.

The internal review underway by the agency's management is the first major exercise for it's freshly-installed chief executive Nick Hill.

Cost increase

Meanwhile, senior management costs the economic development agency have jumped by nearly 90 percent in two years, but the reason is not entirely clear.

ATEED said the addition of two new general managers accounted for part of the increase of almost $1 million.

The agency's latest annual report includes a further payment equivalent to the salary of a third top executive.

However, the council's agencies do not reveal individual sums paid for severance or early termination, and these collectively amount to $2 million, according to the council's own group report.

Overall ATEED staff costs rose by nearly 14 percent in the two years.