Wednesday 1 November, 2017

Value for Money reviews identify $373 million savings

Auckland Mayor Phil Goff has welcomed the findings of the first group of Value for Money reviews of council operations.

“The reviews have identified potential savings of up to $373 million over ten years. I expect the realised savings to be reinvested in vital services and infrastructure for Auckland,” Phil Goff says.

“The recommendations of the report released today will go to the Finance and Performance Committee next Monday. Subject to the support of elected representatives, the Chief Executive will be tasked with implementing them.

“I instigated these reviews because elected representatives on Council have an obligation to ensure that what we do is effective and 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 and 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 and in depth the value for money in what it does. This is a legislative requirement under s17a of the Local Government Act 2002.

“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. I thank them and Finance and Performance committee chair and deputy chair, Ross Clow and Desley Simpson, for their hard work and commitment to achieving the results.

“These are the first of a series of value for money reviews across the entire Council group which will honour my commitment to work with Council and its CEO to achieve efficiency and to do more with less,” Phil Goff says.

The reviews note that council has already delivered efficiency savings for Aucklanders. However, further integration of functions, shared procurement and services, clear performance measurement, and better strategic and operational coordination across council and its CCOs could lower operational and capital expenditure considerably and improve services.

Three waters

The report notes that through amalgamation, Auckland council’s water services have delivered benefits to Auckland ratepayers saving hundreds of millions of dollars. However, the Mayor says there is more that can be done.

“There is potentially $300 million in savings to be achieved through further integration, joint procurement and capital planning across council’s three water services,” Phil Goff says.

“$13 million of those savings could be realised immediately by combining operations and maintenance of our water and stormwater services which I support.”

Communications and Engagement

“It was clear to me during the mayoral campaign that there were issues with the structure of communications across the council group and the review clearly supports that,” Phil Goff says.

“I support a cut of at least 15% to the operating budget of Communications and Engagement over the next three years and joint procurement between council and CCOs that in total represents potential savings of $54.5 million over ten years.

“I cannot predetermine the outcome of next week’s Finance and Performance Committee, but I expect work will begin quickly across council and CCO communications functions to cut costs, improve coordination and to develop a group-wide strategy to address low levels of trust in the council,” says Phil Goff.

Waste

The reviews note that council’s waste service has saved $165 million in operating costs since amalgamation and has a clear plan to reduce domestic waste in Auckland that is working.

The Value for Money report says that Council’s waste service will benefit from a broader business case methodology and will also need to assess a shift of focus from residential to commercial and industrial waste which accounts for 86% of all waste in Auckland.

“The Environment and Community Committee will examine these recommendations and it and professional staff will report back on changes which need to be made,” says Phil Goff.

International investment attraction and global partnerships

The Value for Money review of council and CCO investment attraction and global partnerships found that the functions are well organised and 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 council’s activities can be identified.

“I welcome this report which is very positive. The recommendations for better evaluating performance and recovering costs where appropriate are sound and should be followed through,” says Phil Goff.

The four 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 and services during this term of council.

The second group of reviews are underway and include council’s Group Procurement and Parks and Open Spaces. They are due for completion early next year.

The Value for Money reports will be tabled at Auckland council’s Finance and Performance Committee on Monday 6 November in a public session.

ends

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