Part 2: The transition and the first two years of the Auckland Council

Auckland Council: Transition and emerging challenges.

The transition arrangements and the intentions of the Auckland reforms

2.1
The Auckland reforms have their origin in the Royal Commission on Auckland Governance, which reported to the Government in March 2009. The Royal Commission and the Government considered that local government reforms in Auckland had a nationwide context. Auckland is our largest city and home to more than a third of the country's population. The Royal Commission concluded that bold change was needed to make Auckland the most exciting, vibrant metropolitan centre in Australasia.1

2.2
In designing the most appropriate system of governance for Auckland, the Commission sought to produce a structure capable of meeting not just immediate needs but the needs of the region during the next 20 to 50 years. The Commission was guided by four principles, which it acknowledged are inherently in tension with each other. These four principles were:

  • common identity and purpose: Auckland's governance arrangements should encompass the interests of the entire Auckland city-region and foster a common regional identity and purpose, which supports integrated planning and decision-making;
  • effectiveness: the governance structure should deliver maximum value within available resources, in terms of cost, quality of service delivery, local democracy, and community engagement;
  • transparency and accountability: roles must be clear, including where decision-making should be regional and where local; and
  • responsiveness: the structure should respect and accommodate diversity and be responsive to the needs and preferences of different groups and local communities.2

2.3
In 2009, the Government, with Hon. Rodney Hide as Minister of Local Government, intended the new governance structure to enable Auckland to reach its full potential as the engine room for the country's economic growth. The Government wanted Auckland to be a region that:

  • attracted people and investment;
  • had first class infrastructure and lifestyle; and
  • would encourage our children and grandchildren to build their futures in New Zealand.3

2.4
Five separate Acts of Parliament provided for the changes to achieve the Auckland local government reform. These Acts were:

  • the Local Government (Tamaki Makaurau Reorganisation) Act 2009, which provided for the establishment of the ATA to manage and oversee the transition from May 2009 until the establishment of the Council on 1 November 2010;
  • the Local Government (Auckland Council) Act 2009, which prescribed much of the governance structure of the Council, including the governing body and local boards, and provisions for the funding and powers of local boards; and
  • three Acts which addressed many transitional matters, including employment issues, accountability for CCOs, resolution of disputes between local boards and the governing body of the Council, and spatial planning:
    • Local Government (Tamaki Makaurau Reorganisation) Amendment Act 2010;
    • Local Government (Auckland Council) Amendment Act 2010; and
    • Local Government (Auckland Transitional Provisions) Act 2010.

2.5
Much of the work of the ATA was carried out while these Acts were being prepared and were progressing through Parliament. The ATA had just 18 months to carry out the amalgamation of Auckland's eight former city, regional, and district councils into a single Auckland Council.

2.6
The ATA was aware that the initial phases of the new Council's operation would be demanding. A major objective was to enable the new Council to focus on preparing the policies, strategies, and plans needed to achieve the reforms' intentions and drive Auckland forward, rather than becoming caught in running day-to-day operations.

2.7
In a report on its activities, the ATA identified some of the important changes that the Council would need to ensure happened during the first two years of its operations.4 These included:

  • administrative changes to support the new governance body and local boards;
  • planning changes;
  • financial and rating changes; and
  • underlying administrative infrastructure.

Administrative changes to support the new governance body and local boards

2.8
Local boards needed to adopt their first local board plan by 31 October 2011. The plan had to cover at least the three years from 1 July 2012 to 30 June 2015. The Council needed to adopt a local board funding policy by 1 July 2012.

2.9
CCOs needed to agree their statements of intent with the Council. The statements of intent needed to outline how the CCOs would give effect to the Council's objectives, including the spatial plan, long-term plan (LTP), and other strategic plans.

Planning changes

2.10
The Council needed to prepare a spatial plan that outlined its long-term strategy for growth and development in Auckland. The spatial plan would inform the Council's priorities and objectives for the LTP.

2.11
The Council needed to prepare an annual plan by 30 June 2011 and an LTP by 30 June 2012.

2.12
The Council also needed to standardise the Resource Management Act plans of the former councils. This process will take a number of years because of the legislative requirements involved. The Government has recently decided to amend the Resource Management Act 1991 to provide a one-off process for the Council's first unitary plan. The Government's intention is to shorten the time it will take to make the plan operative while ensuring that Aucklanders still have comprehensive input into the plan.5

Financial and rating changes

2.13
The Council needed to prepare financial policies and strategy to replace the interim financial policies of the ATA. The Council needed to do this by 30 June 2012 so the new policies and strategy could be included in the 2012-22 LTP. The Council also needed to prepare rating policies and mechanisms to apply from 1 July 2012, as part of its 2012–22 LTP.

2.14
The Council needed to assess development and financial contributions for the transitional period applying to the adoption of an LTP from 1 November 2010 to 30 June 2011, and review and implement its development and financial contributions and fees and charges regime by 1 July 2012.

Underlying administrative infrastructure

2.15
The Council needed to integrate and streamline its core systems, such as for finance and regulation, to improve effectiveness and efficiency. It also needed to decommission many legacy systems from the former councils. In its report on its activity, the ATA advised that the former councils' information technology systems alone covered many different operating systems and software, with more than 2500 individual software applications.6 Subsequently, the Council has revised the ATA's initial estimate; identifying more than 5000 individual applications.

2.16
The Council needed to consolidate the asset management plans of the former councils. It needed to do this to inform the development of the LTP and to ensure appropriate maintenance and renewals of community assets. It also needed to develop new assets to cater for growth or improve service levels.

What we heard – good progress has been made but Auckland Council is a work in progress

2.17
Two years on, many of the changes the ATA identified have been implemented and significant progress has been made on others. The kind of change sought by the Auckland reforms and the Council will take time, but there are high-level indications that this change is occurring.

2.18
In July 2012, Auckland moved up four places to be ranked as the ninth most liveable city in the world on Monocle Magazine's annual quality of life top 25 cities index. Monocle Magazine attributed the lift, among other things, to Auckland's new governance structure. In 2009, the Royal Commission on Auckland Governance noted that Auckland ranked fifth on the Mercer Worldwide Quality of Living Survey. In 2011, Auckland had moved to third place.

2.19
As discussed in paragraphs 2.7-2.16, the Council needed to make important changes during its first two years of operation. In the following paragraphs, we review the progress the Council has made during the last two years.

Administrative changes to support the new governance bodies and boards

2.20
A significant administrative challenge arising from the governance changes has been getting financial and service information for each local board to support the boards in their governance and community engagement work.

2.21
The Council has encountered day-to-day difficulties with aspects of legislation. The Council raises these with the Department of Internal Affairs as they arise, to consider whether changes to legislation are needed. For example, the Council's Chief Executive must seek delegations from each local board to enable him to carry out his duty to ensure the effective and efficient management of the Council.

2.22
There is significant public support for some integrated services. For example, Aucklanders can use their library cards at any of the region's libraries. However, many services do not yet have the integrated service and financial information that the governing body and local boards require to carry out their governance roles. For example:

  • Local boards need integrated information for capital, operating, and project expenditure as well as to establish a basis for funding allocations for each board area. Some local boards expressed concern that funding formulas are based on the population of each local area. This is seen as disadvantaging local areas that are geographically dispersed.
  • The governing body needs integrated information for monitoring the Council's operating units against budget, capital project, and operating expenditure across the Council, as well as consolidated and parent and CCO financial monitoring.
  • The Independent Māori Statutory Board needs integrated information for assessing the expenditure directed to benefit Māori.

2.23
People we spoke to considered that, to support the new governance arrangements, the Council needs to continue to:

  • standardise and unify the strategy and policy work programme;
  • clarify the expectations and the mandate/discretion of local board funding policy; and
  • prepare long-term local area plans that set out future asset investment needs.

Planning changes

2.24
The ATA described the new planning system for Auckland as "the cornerstone of the Auckland reforms". It foresaw that achieving one spatial plan, LTP, and unitary resource management plan would be challenging for the planning and policy activities and elected bodies of the Council. However, it also saw that there would be efficiencies for the region's citizens, businesses, and organisations in having one set of consistent rules and policies, rather than the eight sets of different plans and policies, numbering in the hundreds, that existed before the amalgamation.7

2.25
The ATA and the Council, through their transition effort, have provided a stable operating platform for the Council's strategic and regional planning work. Since the amalgamation, the Council has prepared a unified Auckland Plan, which fulfils the statutory requirement to prepare a spatial plan for the region, and has adopted a consolidated LTP for 2012-22. In our view, these have been good achievements that were made within a tight time frame.

2.26
A significant component of the Auckland reforms was providing a stronger basis for regional leadership. Legislation has provided this by changing the roles and responsibility of the Mayor, and by requiring a spatial plan for the Auckland region.

2.27
The purpose of the spatial plan is to contribute to Auckland's social, economic, environmental, and cultural well-being through a comprehensive and effective long-term (20- to 30-year) strategy for Auckland's growth and development.

2.28
Under the Local Government Act (Auckland Council) Act 2009, the spatial plan sets a strategic direction for Auckland and its communities. It integrates social, economic, environmental, and cultural objectives to enable the Council and other parties to carry out coherent and co-ordinated decision-making. The spatial plan must:

  • recognise and describe Auckland's role in New Zealand;
  • visually illustrate how Auckland may develop in the future, including how growth may be sequenced and how infrastructure may be provided;
  • provide an evidential base to support decision-making for Auckland, including evidence of trends, opportunities, and constraints within Auckland;
  • identify the existing and future location and mix of residential, business, rural production, and industrial activities within specific geographic areas of Auckland, and critical infrastructure, services, and investment within Auckland;
  • identify within Auckland nationally and regionally significant recreational areas and open-space areas, ecological areas that should be protected from development, environmental constraints on development, landscapes, areas of historic heritage value, and natural features; and
  • identify policies, priorities, land allocations, and programmes and investments to implement and resource the implementation of the strategic direction.

2.29
We were told that the legislative changes to regional leadership have been taken up with conviction, vision, and energy by those involved. Most people we spoke to told us about the success of the Auckland Plan and of the important role that the Mayor was playing in leading the plan. The Mayor's message in his foreword to the Auckland Plan reiterates the message that we heard from those we spoke to:

Auckland's time has come. We have a widely-shared vision to be the world's most liveable city. And for the first time in our history, we have a single, comprehensive plan to deliver this vision for all of Auckland and all its people – the Auckland Plan. It is a plan that will help us compete on the international stage, and one that will help every Aucklander achieve the best they can. Auckland is our place, and we are ready to grasp this opportunity for a prosperous future.8

2.30
The Auckland Plan encapsulates the aspirations for the Auckland reforms. Hon. Rodney Hide, the Minister of Local Government, who oversaw the reform legislation, told us that his aim was to achieve a governance jurisdiction that could address the region's problems. The Royal Commission and the Minister considered that Auckland combined many of the ingredients for social and economic success. However, they also saw that change was needed on a number of fronts to realise the opportunity that the combination presented. The Royal Commission identified that messy and inefficient urban growth, infrastructure constraints, social disparity, and poor urban design all needed urgent attention.

2.31
It was seen as important that local and central government worked together to:

  • deliver lower regulatory and delivery costs for businesses and individuals, improve infrastructure, and promote innovation to help make Auckland more productive; and
  • protect Auckland's natural environment and adopt measures to improve the built environment and public realm, making Auckland more attractive to residents and visitors, and better able to compete as an international city.

2.32
The Royal Commission identified two broad, systemic problems with Auckland's former local government arrangements – weak and fragmented regional governance and poor community engagement. It cited disputes between councils over urban growth and the development and sharing of important infrastructure, inconsistent standards and plans, and limited sharing of services between councils. The Commission considered that this resulted in delayed (and sometimes suboptimal) decisions for the region, poorer services at a higher cost than necessary, and prolonged formal and duplicative consultation instead of true connection with their communities.

2.33
The Commission concluded, and many people we spoke to agreed, that the former councils had lacked the collective sense of purpose, constitutional ability, and momentum to address issues effectively for the overall good of Auckland.

2.34
As we were writing this report, Parliament was debating the role of local authorities in the economic, social, environmental, and cultural well-being of their communities. Many people we spoke to observed that the expectation of local government to contribute to community well-being had been fundamental to the Auckland reforms.

2.35
The scope of the Council's statutory responsibility in preparing a spatial plan for Auckland extends beyond the Council's direct operations and budgets. The Council must prepare and adopt a spatial plan for Auckland under the Local Government (Auckland Council) Act 2009. The purpose of the spatial plan is to contribute to Auckland's social, economic, environmental, and cultural well-being through a comprehensive and effective long-term (20- to 30-year) strategy for Auckland's growth and development.

2.36
The responsibility for the preparation and leadership of the spatial plan positions the Mayor and the Council as leaders of the Auckland region. It requires the Mayor and Council to articulate a vision for the Auckland region and seek co-operation with that vision from central government and other stakeholders, including the private sector and the community at large.

2.37
An example of how the Council is seeking co-operation in achieving the Plan's vision for Auckland is the Southern Initiative, which is an important initiative of the Auckland Plan. It focuses on the Council working with central government, businesses, and communities to achieve the best possible outcomes for people in areas of high social need. The Council is committing only $1.8 million or $180,000 each year of seeding money to the Initiative. However, through this spending, it is giving local insight and trying to support more integrated spending and effort in the area, including more than $6 billion of central government spending.

2.38
The Auckland Plan covers, among other things, economic development, transport, and the Southern Initiative. Underpinning the Auckland Plan are the LTP, which was adopted earlier this year, and the unitary resource management plan, which is being prepared.

2.39
The actual funding and service intentions of the Council are set out in the Council's consolidated LTP. The LTP shows the services and financial capital and operating expenditure areas common to most of local government.

2.40
Critical challenges identified by the Auckland Plan are:

  • population growth and demographic change;
  • housing availability and affordability;
  • climate change and energy security;
  • international economic competitiveness;
  • social and economic inequalities;
  • environmental quality; and
  • infrastructure planning, provision, and funding.

2.41
Transformational shifts sought are:

  • dramatically accelerate the prospects of Auckland's children and young people;
  • strongly commit to environmental action and green growth;
  • move to outstanding public transport within one network;
  • radically improve the quality of urban living;
  • substantially raise the living standards for all Aucklanders and focus on those most in need; and
  • significantly lift Māori social and economic well-being.9

2.42
We were told that the Auckland Plan is strongly supported within the Council and in other organisations the Council works with, as well by the public. The Department of Internal Affairs told us that the Government has responded to the Plan, noting its significance in aligning national and Auckland priorities.

2.43
We have observed the support for the Auckland Plan during our audits. This support is an early indication of the significant and promising differences that new governance arrangements could achieve. However, we were told that regional integration is creating "winners and losers" as it begins to affect communities and households – for example, the current rating changes and consolidation of contracts for services.

2.44
Despite the Council's success in adopting its consolidated LTP, many people we spoke to expected that the LTP would be significantly reviewed for 2015-25 and that many assumptions and projects would be re-examined and questioned. Those we spoke to gave several reasons for this expectation:

  • There was limited experience and knowledge about the likely ongoing cost of the new Council's operations. The closing balances for the Council's first year of operations were not available when the 2012-22 consolidated LTP was prepared. The Council has strong planning, forecasting, and financial management practices, and increasingly stable operations continue to improve forecasting.
  • There may be refinement of the expectations of growth rates in different areas that could affect the spending forecast for infrastructure development.
  • Many initiatives included in the 2012-22 consolidated LTP were inherited from the former councils. Local boards will reassess these initiatives as they settle into their governance role in the period leading up to preparation of the next LTP. Initiatives will either remain in the LTP because they continue to be relevant or will be replaced by higher priorities.

2.45
The Council is now focusing on the unitary resource management plan and on reviewing and harmonising bylaws. Based on the experience of other councils, a unitary resource management plan can be expected to take a minimum of several years to carry out. As noted in paragraph 2.12, the Government intends to amend the Resource Management Act 1991 to provide a once-only process for the Council's first unitary plan.

2.46
The ATA and the Council have worked to provide more customer-focused and consistent regional building and environmental services, including streamlining resource consent and building control services. Pre-lodgement services for building and resource consents have been rolled out region-wide, and more than 850 forms used by the former councils were reduced to 120 forms to be used consistently across the region. Under the Local Government (Tamaki Makaurau Reorganisation) Act 2009, the Council was given one year to get Building Consent Authority Accreditation. It was permitted to operate under temporary accreditation until that was achieved. The Council achieved this accreditation in October 2011.

2.47
Regulatory and other fees and charges were standardised by the ATA to the lowest level in the region (except for the former Franklin District Council) in anticipation of economies-of-scale benefits from amalgamating services. However, the service costs where relatively lower level direct fees were charged by the former councils were sometimes met to a greater extent through general rates, and the Council has since increased some of the lower standardised fees set by the ATA.

Financial and rating changes

2.48
Perhaps the most significant test of public trust that the Council has faced since the handover from the ATA has been adopting a unified rating system for the Auckland region. Rates are the largest source of income (more than 70%) for the Council. Other income sources include fees and charges, roading subsidies, and development contributions.

2.49
The Council has completely overhauled the rating systems used by the former councils to provide a stable and predictable basis for rating throughout the region. The main platform of the new rating system is a capital value-based general rate, with eight property type-based differentials ranging from 0.25 to 2.63 for each dollar of capital value, and a uniform annual general charge ($350 for each separately used or inhabited part of a property). The Council has taken a taxation approach to rating rather than attempting to set rates to reflect the benefits received from services in each area.

2.50
The new system has meant significant shifts in the rates paid by households. These shifts are influenced by changes in the valuation of properties and by the extent to which the new system differs from that used by the former councils. The rates some ratepayers pay have reduced, while those of others have increased. Because of the former councils' very different rating systems, the new rating system is being introduced over three years to manage the adjustment for different properties and locations.

2.51
The Council has made an extensive effort to communicate the changes to the rating system. However, as the actual dollar amount of rates paid is different for each property, elected members and staff recognised that many ratepayers would not be aware of the effect for them personally until they received their rates assessment. No-one welcomes increased rates bills, and everyone we spoke to was aware of the high public expectations for the Council to be disciplined in the use of rates. Despite the changes to the rating system, the pattern of rates payments has been close to normal, which may indicate that the public has accepted that a unified Council requires a unified rating system.

2.52
Although the Auckland reforms were not primarily carried out to reduce costs, economies of scale and opportunities to leverage buying power were anticipated from a larger Council. The Council has reported $81 million of efficiencies in the first year and is forecasting $1.7 billion of efficiency savings (in most instances, maintaining or improving service levels) during the next 10 years.

2.53
Efficiency gains have been made through the bargaining power brought by the Council's scale in procurement. The Council has consolidated multiple contracts with the same supplier for similar services throughout the region, and rationalised the numbers of suppliers of similar services, to improve value for money. For example, park maintenance contracts in the region were recently merged from 78 to 12 contracts, resulting in savings compared to previous contract costs. However, some elected members spoke of the loss of work for locally based contractors and the resulting loss of wider community connections. We were also told that there have been service reductions in some areas.

2.54
The Council currently funds just under 65% of its depreciation expenses. It will build to fully funding its depreciation expense during the term of the LTP. Debt is drawn down only when costs are committed, and forecast capital expenditure is deferred until it is actually required. Although the Council's focus on managing operating costs will generate further savings, the Council's longer-term growth and development needs see the Council's group debt rise from $4.03 billion at 30 June 2011 to the $12.7 billion in 2021/22 forecast in its LTP. About half the projected debt relates to transport activities; a quarter to water, wastewater, and storm-water activities; and a quarter to other core Council activities.

2.55
This debt forecast is based on projected rates increases of 4.9% for each year of the LTP. A 3.6% increase was passed by the governing body for 2012/13, the first year of the LTP, Recently, in proposing the Council budget for 2013/14, the Mayor has indicated a rates increase of 2.9%. In the longer term, debt looks likely to increase and to become a more significant factor in the Council's financial management. Figure 2 shows the Council's net borrowing and the limit based on total revenue.

Figure 2
Auckland Council's net borrowing

Figure 2 - Auckland Council's net borrowing.

Source: Auckland Council (2012), Auckland Council Long Term Plan 2012-2022, chapter 2, page 43.

2.56
Debt is increasing during the long term as the Council invests in infrastructure but, as discussed in more depth in our report on matters arising from the 2012-22 LTPs, the forecast debt remains well within the policies' limits of the Council and appears prudent. The Council has sophisticated treasury management functions to manage its working capital requirements, borrowing requirements, financial investments, and treasury-related risks. Recent legislative changes permit the Council to borrow in foreign currency.10 The Council also has good credit ratings, as shown in Figure 3.

Figure 3
Auckland Council's credit ratings

Affirmed
date 		Long term
NZ$		 Long term
foreign currency 		Short term
NZ$
Standard & Poor's (Australia) Pty Limited February 2012 AA/Outlook stable AA/Outlook stable A-1+
Moody's Investor Services Pty Limited April 2012 Aa2/Outlook stable Aa2/Outlook stable

Underlying administrative infrastructure

2.57
One of the biggest challenges for the new Council is supporting and embedding the culture it seeks. People spoke of creating a "can-do" organisation that lives out such principles as common purpose, transparency and accountability, and effectiveness and responsiveness.

2.58
A critical component of the smooth and seamless handover from the ATA to the Council was the Council's ability to integrate and maintain financial operations. More than $100 million has been invested in setting up the Council's financial, procurement, and payroll systems and the associated monitoring and management.

2.59
By contrast, there has been less development and focus on the other information technology and systems. Some people we spoke to said that the ATA had not developed the information technology strategy enough before handover to the Council. Although the ATA had chosen and put in place a financial system (SAP), it had not dealt with other information technology platforms or systems. With hindsight, one person observed that specialist advice on IT mergers could have been helpful for the transitions of other core IT platforms. We agree with this observation and note that much IT transition work remains to be carried out. The Chief Executive has formed an advisory group of experienced IT experts from major New Zealand corporations.

2.60
People we spoke to saw the lack of development of other IT platforms and systems as creating barriers to the Council maintaining its forward momentum. It was also seen as contributing to high workloads for staff. The Council continues to anticipate financial savings from consolidating and rationalising services and delivery channels, as it has done with procurement to date. IT systems integration and investment were seen as essential to achieving these anticipated savings. However, for a large range of service delivery and corporate functions, the Council is still operating the legacy collection of information systems it inherited from the former councils.

2.61
In March 2012, staff reported to the Strategy and Finance Committee on proposals to improve the performance management systems for the Council's 8000 employees (including CCO staff).11 Staff told the Committee that the Council:

  • manually recorded and tracked all activities related to employee performance management;
  • did not have common behavioural competencies and consistent objectives throughout the organisation; and
  • did not have tools to measure employee performance levels.

2.62
The report concluded that, unlike other organisations of a similar size, the Council was not yet using systems to support, assess, and improve the performance and capabilities of its staff.

2.63
As well as the lack of formalised systems for performance management, we were told that the expectations and needs of staff are changing. In particular, there is a growing need for staff who can navigate within the Council's complex governance structures and administrative bureaucracy.

2.64
We were told that the quality of management and monitoring information given to the Council's Senior Leadership Team has been poor, although it is improving. We also heard that information system and management issues are affecting those in governance roles. Elected members expressed concern that they did not know when or by whom the work to integrate the Council's systems was being carried out.

2.65
For example, many elected representatives we spoke to raised concerns about information management of community grant funding. We were told that this was supported by 51 different systems used by the former councils that had not yet been brought together. This had made decision-making about grants difficult, because an overview of what organisations had received could not easily be put together.

2.66
In our annual audit for the year ended 2012, we noted that there had been little improvement in the systems the Council has to collect, record, analyse, and report its performance. This was the first year for which the Council was required to report against local board agreements. It uses a number of systems to collect data. Many of these systems are legacy systems, and appropriate controls and quality assurance processes were not in place for managing the integrity of performance information.

2.67
We also recommended that the Council improve its reporting of large projects and related contracts that involve the Council and CCOs, and of large projects that are divided into subprojects across different business units within the Council. Improved reporting is needed to give the governing bodies of these projects, and the Council, better oversight of the projects, and to limit the risk of project issues and cost overruns.

2.68
As a public entity, the Council's focus should be on delivering services to its communities now and sustainably into the future. The Council acknowledges that it needs to improve its service delivery and management information. In the next financial year, the Council will report against its 2012-22 consolidated LTP. The Council needs to take ownership of its service and management performance expectations and ensure that it has systems in place to collect and report information throughout the year.

Our observations on the transition

2.69
The following observations on the transition from the ATA to the Council and the first two years of the Council's operations are drawn from what we were told by those we interviewed, and from our own annual audit interactions with the Council.

2.70
Unified and integrated direction has been achieved through the vision and plan for the Auckland region. The Council and the Auckland region have benefited from integrated planning. We heard from everyone we spoke to about the unifying and focusing benefits of the Auckland Plan. The Plan has provided a coherent strategic regional direction, including a sense of purpose, a sense of regional identity, and recognition of Auckland's national significance. This direction has a lot of organisational, stakeholder, and public support.

2.71
This regional direction has enabled the Council to prioritise its activities throughout the region for the first time. The Council has carried out extensive planning work in preparing the Auckland Plan (incorporating the spatial plan) and in adopting the 2012-22 consolidated LTP and a unified rating system. It has been taking action on its planning, beginning major and much-needed initiatives in transport; in water, storm, and wastewater infrastructure; and in community services, such as for regional events and the Southern Initiative. Many people we spoke to told us that the proof of the success of the amalgamation lay in the planning achievements of the Council in the last two years.

2.72
Being reliable builds public, staff, and partners' trust. The first priority in the first days and weeks of the new Council was to be reliable in its day-to-day services. The Chief Executive and senior leaders were aware of the complexity of the amalgamation, and dealt with many funding and transitional issues. They would have been aware every day of things that could have gone wrong and thrown doubt on the wisdom of the amalgamation. They focused on continuing seamless day-to-day frontline and financial service delivery. The result was overall public acceptance of the changes, which surprised many. The handover from the ATA to the new Council went largely unnoticed, and few issues or complaints were received.

2.73
Strong and principled leadership committed to working together is fundamental – and is hard work. In particular, we noticed that everyone we spoke to is committed to making the Auckland reforms work the best they can. Many people we spoke to acknowledged the importance of the vast knowledge drawn from officers – some of whom had little prospect of reward, recognition, or future employment – before the handover to the new Council. Although these people may not have personally supported the amalgamation, and although their own livelihoods were affected, many worked tirelessly to achieve the amalgamation and the results that have followed. We were told that, because there is so much planning and service integration work yet to be done, many of the governors and staff of the Council continue to have very heavy workloads.

2.74
Many people we spoke to told us about the strong leadership of the Mayor and senior officers of the Council and the CCOs, and of their commitment to the principle of working together for Auckland. There was also acceptance that there have been and will be mistakes, not because anyone has done anything wrong but because there are always things that are not known. We were told that the attitude and culture of commitment to making things work is more important than having perfect structures, legislation, or plans.

2.75
Tight transition arrangements created momentum for the new Council. Amalgamating the eight former councils into one Council was a big task, and we heard a range of views that some things could have been done differently or better. For example, some people we spoke to would have preferred the ATA to leave more of the senior appointments for the Council to make. Others would have liked the ATA to have spent more time defining and describing governance roles.

2.76
It was important that there was a transition agency. It was also important that its time was short, so its focus was on preparing for those to come. The ATA did not try to make every decision, but it did have the power to oversee significant decisions. Amalgamation by legislation meant that the ATA and the Council needed to focus on giving effect to the changes. Most people we spoke to felt that the amalgamation would not have happened if it had not been legislated. Those working with and in the Council have accepted that the future of local government in Auckland is an amalgamated council.

2.77
Change is ongoing – Auckland Council is a work in progress. The immediate transition to a unitary Council has passed. The stability of day-to-day services has been ensured, and the main strategy and planning documents have been prepared. The Council is starting to optimise the value that can be gained from the initial change process. Many people we spoke to considered that it will take two to three electoral periods to settle the changes, to consolidate and standardise service systems and processes, to unravel and resolve issues, and to learn how to better understand and manage inherent tensions.

2.78
The Chief Executive and the Executive Leadership are now leading a process of organisational transformation to improve the Council's capability to deliver the Auckland Plan and value for money. However, significant challenges remain. As one of the largest organisations in the country, the Council will wrestle with its size to communicate effectively between its governance tiers, departments, and CCOs, and to be responsive and agile. Significant work remains to:

  • understand the different policies and regulations currently in force;
  • understand the levels of service and the performance of each area against these levels, and determine future service levels that are seen as fair and equitable; and
  • develop systems to address the Council's internal and external service performance needs.

2.79
There are inherent tensions built into the Council's governance arrangements and with other players, including at a national level. The Council will need to constructively manage these tensions to maintain support for, and confidence in, the plan for Auckland.

1: Report of the Royal Commission on Auckland Governance (March 2009), Executive Summary, paragraphs 3-11.

2: Report of the Royal Commission on Auckland Governance (March 2009), Executive Summary, paragraphs 22-23.

3: Making Auckland Greater, April 2009, page 10.

4: Auckland Transition Agency (March 2011), Auckland In Transition: Report of the Auckland Transition Agency, Volume 1, pages 20-28.

5: Department of Internal Affairs, letter to the Office of the Auditor-General, 15 November 2012.

6: Auckland Transition Agency (March 2011), Auckland In Transition: Report of the Auckland Transition Agency, Volume 1, page xv.

7: Auckland Transition Agency (March 2011), Auckland In Transition: Report of the Auckland Transition Agency, Volume 1, page 21.

8: See www.theplan.theaucklandplan.govt.nz/.

9: See www.theplan.theaucklandplan.govt.nz, section C.3.

10: Section 107 of the Local Government (Auckland Council) Act 2009.

11: Agenda Item 10, Strategy and Finance Committee, Thursday 8 March 2012.

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