Venture Hawke's Bay

It has become apparent that on top of everything else there are significant financial problems at Venture Hawke's Bay.

As most people do not have a clue what this organisation is all about

Although I have no direct involvement in VHB and have met only a few of the staff as a board member of HBWCTA I thought I would try to explain a bit about this mysterious organisation. .

Even my very limited contact has always left me with concerns, mainly I think because I did not have a lot of confidence in many of those involved.

The purpose of VHB is two fold. To foster economic development, and secondly to act as regional tourism operator.

I strongly support economic development. We have low incomes, high unemployment, low population growth, and feature on the wrong side of many health statistics.

We also need to be more successful in attracting visitors. For the past several years our numbers as measured by visitor bed nights have been dropping at a rate that puts us seriously into negative territory, and makes us one of the worst performing areas in the country.

Around 2003 the Napier and Hastings Councils combined with the Regional council and agreed to provide an additional $200 000 each on top of funding already being provided for tourism development bringing the total budget funded incidentally by ratepayers to a little over $1.2 million a year.

This organisation became Hawke's Bay Inc with former former Hawke's Bay Regional Council Chairman Ross Bramwell as its first Chair person. The first two Chief Executives departed quite quickly and the third Janet Takarangi was appointed in 2008. As best I can fathom it was during this period that quite substantial financial reserves were built up effectively because for much of the time there was no Chief Executive on the payroll

A year later both the NCC and HDC decided to stop their funding and pass control and responsibility for funding to the Regional Council. Effectively this was a sneaky way of increasing rates because the RC introduced a new targeted rate where as previously it had been funded from existing council resources. If you look at your regional Council rates bill you will find a specific sum dedicated to paying for VHB.

At the same time Ross Bramwell stood down and was replaced by long time critic Regional Councillor Neil Kirton. There seemed to to have been endless problems over a long period with the accuracy of the financial reports. We can only assume the Regional Council headed by Andrew Newman were more than happy to take on this additional responsibility. They probably saw it as an elevation of their regional status.

A board was appointed consisting of representatives of the 3 councils, and at least 3 people with commercial backgrounds. The board however, and this is critical, was not a governing board but a consultative board, meaning financial control was in the hands of the Chief Executive, the Chairman Neil Kirton and the Regional Council Chief executive Andrew Newman.

Staff numbers then built up rapidly with at least 17 positions on the establishment. Additionally several consultants seemed to be engaged on various assignments.

Throughout 2010 the whole empire has been unravelling. A $130 000 advertising campaign based around a $57 000 animation was intended to boost visitor numbers over summer, but fell foul of many accommodation providers especially Moteliers.

Numbers may have lifted slightly in January but the depressed state of the industry continued unabated. There was continuing and ever more shrill criticism, until in June 2010 the Chief Executive decided to leave.

Rumors about the financial plight have been circulating for quite some time but now the balloon has gone up.

The nearly half million dollar deficit is a major blow out and only about half can be funded from reserves. The rest will come from a loan from the Regional council to be repaid over 5 years meaning there will be less money for essential work in the future. Clearly this is a disaster and the situation is not sustainable.

At a recent meeting of tourism interests Regional Council CEO Andrew Newman was a key speaker. He talked about some of the problems and indicated there would me more redundancies both to bring expenditure down, and to free up money for promotional activities. I felt there was a lack of acceptance of accountability, and I saw no evidence of a plan to move forward.

The simple fact is ratepayers are being billed over a million dollars a year to support an organisation that seems to have had few successes. The decisions relating to VHB are traceable to the Regional Council and with elections looming now is the time to be asking the hard questions.

Clearly ratepayers will not tolerate a further increase in the targeted rate, and why should they. There is little evidence the money already spent has produced any lasting benefits.