Assessing arrangements for jointly maintaining state highways and local roads

Performance audits from 2007: Follow-up report.

In most districts, central and local government agencies carry out their road maintenance responsibilities separately. Three district councils (Rotorua, Marlborough, and Western Bay of Plenty) have formal collaborative arrangements to manage and maintain local roads and state highways passing through the districts as a single road network. Several other collaborative agreements between local authorities and central government have been proposed but have not proceeded.

During our audit, Transit New Zealand (Transit) was the central government agency responsible for maintaining state highways.

The scope of our audit

We looked at how central and local government agencies were collaborating to maintain state highways and local roads. We considered whether the three existing collaborative agreements between district councils and Transit were working well, and resulting in effective maintenance of local roads and state highways at lower cost.

We also looked at why four other proposed collaborative agreements had not proceeded. We drew together views on the lessons learned and on what made collaborative agreements more likely to succeed.

Our findings

Overall, we concluded that collaborative agreements between Transit and district councils could be an effective means to maintain local roads and state highways.

District councils were getting greater savings and more non-financial benefits than Transit from these agreements. However, from its national perspective, Transit saw significant drawbacks. It believed that managing state highways as a national network becomes fragmented and not as efficient under such agreements.

Transit had decided not to pursue further collaborative agreements. In our view, Transit had not thoroughly assessed the merits of current collaborative agreements against the drawbacks it perceived. We considered that a thorough assessment along the lines we suggested would result in a more robust basis for making future decisions on whether and how to collaborate.

Of the four proposed agreements that had not proceeded, the reasons for not proceeding were different in each instance. However, differences between Transit and the district councils on their preferred model for collaboration were an important factor.

Our 10 recommendations included seven about the specific arrangements between the district councils and Transit. We also made three recommendations to Transit and local authorities, to:

  • more fully assess the value of collaborative agreements with local authorities;
  • use our recommended assessment of collaborative agreements as a robust basis for informing future decisions on whether and how to collaborate; and
  • refer to the success factors identified in Part 7 of our report as a guideline to help the parties make well-informed decisions about any future collaboration.

Responsibility for implementing our recommendations transferred from Transit to the New Zealand Transport Agency (NZTA), which was established in August 2008.

The response to our findings and recommendations

Western Bay of Plenty, Marlborough, and Rotorua District Councils, and NZTA each accepted the recommendations in our report.

We recommended that Western Bay of Plenty District Council and NZTA introduce a more comprehensive system to track cost-savings, and how these savings are being used. The Council has carried out two-yearly project evaluations that confirm that savings are intact and being used to improve the road network. NZTA is about to start investigating a more comprehensive system for tracking expected savings against the current contract.

As we recommended, Marlborough District Council and NZTA’s Marlborough Roads Office have discussed succession for the Asset Engineer position if staff changes occur, and plans have been made to fill the position. Our second recommendation about more specific targets for the Council’s service expectations from Marlborough Roads is being taken up as part of the 2009-19 Long-Term Council Community Plan process.

Our four recommendations to Rotorua District Council and NZTA were about reviewing the delegation agreement. That review has been delayed because of NZTA’s establishment and amendments to the Land Transport Management Act 2003. However, the Council and NZTA are both committed to putting the recommendations in place. Discussions between NZTA and the Council have agreed a no-surprises approach to the review. The review, and, accordingly, carrying out our recommendations, is expected to be completed by 30 June 2009.

NZTA has not yet begun to assess the value of collaborative agreements with local authorities, but intends to do so by mid-2009. Although NZTA is not looking to enter any new joint arrangements with local authorities, it remains open to the possibility.

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