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John Milford: Wreda isn't working and here's why

I doubt even the success of the recent LookSee initiative has been enough to stave off what I now see as the inevitable.

In this business, perception is reality and the perception is that Wreda is not working.

I have no doubt it has the ingredients for success, so why has it not been more visibly successful?

What happened from the merger of Grow Wellington, Positively Wellington Tourism, Destination Wellington, Positively Wellington Venues and Major Events?

There never is just one failing, and I suspect the answer lies in a mix of a bad governance model – which resulted in Wreda's focus being split as it tried to satisfy the demands of its nine shareholding councils.

There was also a lack of committed buy-in from those same masters (Wellington City Council excepted). A slow merge of the disparate parts hasn't helped, either.

A clue to the lack of buy-in lies in how economic development in the region is funded:

In 2016, Wreda received around $18 million of ratepayer funds. Of that, Wellington City contributed around $14m, while Greater Wellington ratepayers, which included Wellington City and the seven other councils, together contributed just $4.1m.

That's a huge imbalance in incentive if I ever saw one.

But the real kicker is that there is also additional economic development spending in the region, conservatively estimated at more than $19m.

While each of the seven other councils are making a rather paltry contribution to the region's economic development organisation, back in their own patches they've been maintaining – even increasing – their economic development activities to the tune of around $13.1m in total.

A further $600,000 goes towards the Wellington Regional Strategy Office, another outlier.

Right there are examples of duplication of effort and expense that run directly counter to what the councils agreed was the intent behind Wreda – to spearhead and deliver a coordinated approach to economic development.

A report commissioned by Local Government Commission last year laid out concerns with Wreda's model, including:

- Significant variation in expenditure on economic development across the councils

- Areas of potential duplication across the region

- A perceived lack of strategy or vision and measurable key performance indicators

- Concerns about the effectiveness of monitoring.

Crucially, it also pointed to concerns around sustainability of the model, saying the unequal funding arrangements "are a potential source of tension", and "good working relationships between the parties … is an ongoing requirement if the model is to succeed".

So, where to now?

Given where the lion's share of the funding comes from, the operations could be hauled back under Wellington City Council, forgoing the small amount of funding from the other councils.

It would, at the least, have the capability to provide the short-term life support needed.

We would want to see more work with business partners, and for its success to form one of the council's key performance indicators.

The relationship with the other councils could be on a transactional basis, where they are offered the chance to contribute on a project-by-project basis, as was done with Positively Wellington Tourism before the merger.

A possible exception could be to put Venues' operations into the hands of Wellington Regional Stadium Trust, which would also likely run any new indoor arena.

I throw this out there as a starting point to a discussion we must have if our region is to progress for the benefit of all who live in it.

It's just a shame that something that started out with such promise has come to this.

John Milford is the chief executive of the Wellington Chamber of Commerce
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