Part 5: Auckland Council s next long-term plan

Matters arising from Auckland Council's planning document.

In this Part, we highlight important matters for Auckland Council to consider when developing its long-term plan for 2012-22. We cover:

  • the heightened interest in transparency, accountability, and financial management of local authorities;
  • Auckland Council's strategic direction and the importance of consistency and integrated planning across the whole group;
  • the significant planning that Auckland Council will need to do, including the long-term plan for 2012-22 and the spatial plan; and
  • key matters the long-term plan for 2012-22 will need to address, including:
    • a performance framework that addresses Auckland Council's unique governance and accountability arrangements; and
    • a clear financial strategy.

Context for the 2012-22 long-term plan

The Auditor-General is required to audit all local authorities' long-term plans, and will next be doing so for the long-term plans for 2012-22. These audits will be carried out in the context of heightened interest in transparency, accountability, and financial management created by the Local Government Amendment Act 2010.

Auckland Council's strategic direction

After the election of Auckland Council's first new members – for the governing body and local boards – and the formal start of its operations from 1 November 2010, Auckland Council can begin to develop its own strategic approach through consultation.

Integration of planning

The planning document was in place on 1 November 2010, and provides useful context for considering strategy. Auckland Council's strategic direction will help guide the various aspects of the Council's planning.

Auckland Council needs to do significant planning, and it will be important that the various aspects are integrated and aligned with the Council's chosen strategic direction. It will also be important to align Auckland Council's planning with that of its council-controlled organisations. Key aspects of Auckland Council's planning include:

  • integrating the underlying information of the former councils and of their council-controlled organisations – for example, their respective asset management plans;
  • preparing the annual plan for 2011/12, and setting transition rates for that year;
  • developing a spatial plan; and
  • preparing Auckland Council's long-term plan for 2012-22.

The planning document acts as Auckland Council's long-term plan until the Council develops the 2012-22 long-term plan. The Local Government Act 2002 provides the mechanism for changing a long-term plan, and Auckland Council will need to use this mechanism if it decides to change the planning document before it has developed the 2012-22 long-term plan.

Significant planning needs

Auckland Council has unique features of governance that are reflected in the planning document and that will need to be developed further in its long-term plan for 2012-22. This is so that the purpose32 of the long-term plan for 2012-22 can be met in a way that reflects Auckland Council and its unique features.

Shared governance and accountability between the governing body and local boards

The planning document makes an initial allocation of decision-making to local boards and sets initial budgets for each local board for 2011/12.

The reform legislation provides mechanisms for developing local board agreements and plans between the governing body and each local board, in conjunction with a local board funding policy. Through these mechanisms, Auckland Council will need to confirm or change the initial arrangements reflected in the planning document and set a long-term basis for determining these matters.

Over time, Auckland Council will need to establish levels of service delivery in each local board area. It will also need to develop a detailed performance framework that addresses the accountability of both aspects of its shared governance.

Substantial subsidiaries

It will be important for Auckland Council to establish detailed performance expectations and accountability arrangements for its council-controlled organisations to ensure that their objectives are aligned with those of Auckland Council.

This will include developing a policy on accountability for substantive council-controlled organisations and individual statements of intent for each of the council-controlled organisations.

The planning document includes information about the financial and non-financial aspects of Auckland Council's council-controlled organisations. It will continue to be important to present these financial and non-financial aspects in an integrated way, as this will provide a clear overall performance picture of critical areas of Auckland Council's service delivery.

Other key aspects of the 2012-22 long-term plan

Service performance

The different levels of service of the former councils were carried over to Auckland Council on 1 November 2010. The planning document presents these as consolidated on an average basis across the Auckland region.

Auckland Council will need to decide the appropriate levels of service, and the associated investment and funding arrangements. It will also need to progressively identify relevant levels of service at the local board level.

The measures and targets included in the planning document require Auckland Council to have underlying systems and processes to record, manage, and ultimately report its actual performance in its annual report. These systems are being developed after the transition, and will also need to keep pace with Auckland Council's development of strategy and the detailed content of its overall performance framework.

Developing a long-term financial strategy

We have for some time emphasised the importance for a local authority to have a clear financial strategy – and that this is a major issue that should be clearly presented to the community.33

The planning document reflects the consolidation of the financial approaches of the former councils. Auckland Council will need to decide its own financial strategy to meet the requirement that all local authorities manage their finances prudently.

Auckland Council will need to decide its financial strategy in the context of:

  • completing the integration of the financial and funding policies of the former councils;
  • establishing approaches to setting transition rates for 2011/12, a single rating system from 2012/13, and a rates transition management policy for up to a further three years from that year; and
  • finalising the funding arrangements for Auckland Council's local boards, and between Auckland Council and its council-controlled organisations.

32: Section 93(6) of the Local Government Act 2002.

33: Amendments to section 101A of the Local Government Act 2002 created a new statutory requirement for preparing and adopting a financial strategy, and including it in a long-term plan.

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