Auckland Council’s finance & performance committee will vote next Monday on the first recommendations from an assessment of whether it’s getting value for money from its various arms, including council-controlled organisations.
Mayor Phil Goff welcomed the findings of the first group of reviews yesterday: “The reviews have identified potential savings of up to $373 million over 10 years. I expect the realised savings to be reinvested in vital services & infrastructure for Auckland.
“I instigated these reviews because elected representatives on council have an obligation to ensure that what we do is effective & efficient, and provides Auckland residents with the best value for the money they invest in us.
“With unprecedented population growth, Auckland has a massive need for investment in services & infrastructure to keep pace with this growth. Money is a scare resource and we need to make sure that we are getting the best return from what we spend.
“Auckland is New Zealand’s first council to review comprehensively & in depth the value for money in what it does. This is a legislative requirement under section 17a of the Local Government Act.
“The reviews are the culmination of months of work by council professional staff, with input from external experts in the areas under review and overseen by an independent reference panel.”
The reviews note that the council has already delivered efficiency savings for Aucklanders. However, they also noted that further integration of functions, shared procurement & services, clear performance measurement and better strategic & operational co-ordination could lower operational & capital expenditure considerably and improve services.
The report notes that, through amalgamation, Auckland Council’s water services have delivered benefits to Auckland ratepayers saving hundreds of millions of dollars. However, Mr Goff said more could be done: “There is potentially $300 million in savings to be achieved through further integration, joint procurement & capital planning across the council’s 3 water services.
“$13 million of those savings could be realised immediately by combining operations & maintenance of our water & stormwater services, which I support.”
Communications & engagement
Mr Goff said it was to him during the mayoral campaign that there were issues with the structure of communications across the council group and the review clearly supported that: “I support a cut of at least 15% to the operating budget of communications & engagement over the next 3 years, and joint procurement between council & CCOs that in total represents potential savings of $54.5 million over 10 years.
“I cannot predetermine the outcome of next week’s committee, but I expect work will begin quickly across council & CCO communications functions to cut costs, improve co-ordination and to develop a group-wide strategy to address low levels of trust in the council.”
The reviews note that the council’s waste service has saved $165 million in operating costs since amalgamation and has a clear plan to reduce domestic waste, which the report said was working.
However, the report also concluded that the council’s waste service would “benefit from a broader business case methodology, and will also need to assess a shift of focus from residential to commercial & industrial waste, which accounts for 86% of all waste in Auckland.
“The environment & community committee will examine these recommendations, and it & professional staff will report back on changes which need to be made,” Mr Goff said.
International investment attraction & global partnerships
The review of council & CCO investment attraction & global partnerships found the functions were well organised & aligned, and business processes accorded with best practice. It recommends exploring a fee-for-service as a way to offset costs where direct personal benefits from the council’s activities can be identified.
The 4 reviews are the first tranche of a systematic value-for-money review process across the entire council group that will examine all ratepayer-funded functions & services during this term of council.
The second group of reviews is underway and includes the council’s group procurement and parks & open spaces. They’re due for completion early next year.
Auckland Council, finance & performance committee agenda Monday 6 November:
9, Value for money section 17A review programme
Three waters terms of reference
Three waters value for money (s17A) review report 2017
Domestic waste terms of reference
Domestic waste value for money (s17A) review report 2017
Communications & engagement terms of reference
Communications & engagement value for money (s17A) review report 2017
Investment attraction & global partnerships terms of reference
Investment attraction & global partnerships value for money (s17A) review report 2017
Attribution: Mayoral release, agenda.