Last week, the Value for Money Committee (which I chair) reported some really positive results by way of savings and efficiencies.
Section 17a of the Local Government Act requires all local authorities to periodically review the cost-effectiveness of their services. A value for money review encourages efficiency gains and is also an opportunity to reassess and improve the delivery of services to our communities and residents. Through our Value for Money Committee work programme, we have well and truly exceeded the expectations of that review and delivered some tangible results for Aucklanders.
Saving money each year isn’t new. Since amalgamation, Auckland Council has accomplished cumulative operating savings of $2.4 billion!
That said, the Value for Money Committee is a new committee that was established for the first time at the start of this political term, back in 2019. Its objective is simply to look for money saving opportunities and to consider the cost effectiveness of the governance, funding and delivery of Council. In this term, the committee has achieved over $447 million of financial benefits, including operating savings and efficiency achievements of $259.7 million, and group procurement savings of $96 million. Our asset recycling programme has achieved $92 million and also ensures that Council is efficiently using its capital and prioritizing funds to achieve our planned activities and projects. It’s all about ensuring we are spending responsibly.
Following on from last year where we exceeded our record high target of $120 million of savings (coming in at $126 million), we look to exceed our target again. As of 31 May, Auckland Council had achieved 100.8% of the $90 million savings target that had been set as part of our Recovery Budget, with a month still left in the financial year. Over half of that is enduring savings which means we have made a good start towards next year’s savings target.
Achieving savings and efficiencies was already well underway when the pandemic emerged in early 2020, but being faced with a crisis has certainly sharpened our thinking and focus in this space, as it has done for many other organisations throughout New Zealand and around the world. Our annual budget for the 2022/2023 year, which we will formally adopt shortly, has identified an ongoing budget gap of between $90 million and $150 million, so we know that we have some way to go, and more savings and efficiencies to find.
I look forward to sharing the projects planned for our ward as part of our Annual Budget 2022/23 with you once its been formally adopted on 29 June.