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Economists' report points to further council savings

General News | 30/10/2010

An economists’ report commissioned by the Auckland Transition Agency (ATA) has pointed to further savings that could be delivered by the Auckland Council.

Economists Taylor Duignan Barry (TDB) – who previously prepared a report for the Royal Commission on Auckland Governance in 2009 – note that the ATA has initiated efficiencies resulting in annual savings of around $95m per year, with around $75 m released in 2011/2012.

But they note: “TDB believes that there is an opportunity to secure significant additional efficiencies over and above those initiated by the ATA.”

The report estimates realised and potential savings of $175m to $195m per year and notes “overall opportunities for efficiencies are likely to be significantly larger than this estimate if efficiencies additional to those related to amalgamation are pursued.”

Annualised savings of $175m to $195m would equate to a reduction of 10-11% of the likely 2015/2016 rates bill in comparison with the situation if the amalgamation had not taken place.

The report itemises some further efficiency opportunities including:

  • Savings in “on-costs” following staff reductions – including office accommodation expenses, office supplies and furniture requirements
  • Further efficiencies in procurement – through consolidation of buying power and formalizing and managing supplier relationships
  • Enhanced asset management practices in terms of managing and programming CAPEX within the council and its CCOs
  • Further streamlining of business processes – simplification and standardisation of business processes
  • Rationalisation and consolidation of the property portfolio – enhancing the returns and disposal of properties no longer required for council purposes;
  • Online servicing of customer needs, and
  • Other efficiencies, including for example, those arising from a consolidation of the treasury function.

Download the report: Securing Efficiencies from the Reorganisation of Local Governance in Auckland (.pdf) 510k