Auckland Council’s Value for Money Committee has today reported that the council has exceeded its saving target for the 2021/2022 financial year – one month ahead of schedule.
Chair of the council’s Value for Money Committee, Cr Desley Simpson, says a $90 million ongoing operating savings target was included in the 10-year Recovery Budget (2021-2031) to maintain essential services and high levels of spending on infrastructure.
“The council achieved $90.7 million, or 100.8 per cent, of the $90 million savings target on 31 May, with a month still left in the financial year.
“Over half are enduring savings, so we have also achieved around $52 million of savings towards our savings target of $90 million for 2022/2023.
“The Value for Money Committee was formed at the start of our current electoral term in 2019, and through its activities has achieved over $447 million of financial benefits. These include operating savings and efficiency achievements of $259.7 million as at 31 May and group procurement savings of $96 million as at February this year. Our asset recycling programme has achieved $92 million and also ensures the council is efficiently using its capital and prioritising funds to achieve our planned activities and projects.
“We have an obligation to provide value for money for Aucklanders and we are committed to delivering the services that Aucklanders need in the most efficient and effective way. It is all about ensuring we are spending responsibly, and I am proud of the savings progress we have made so far.”
Mayor Phil Goff welcomes the early achievement of the yearly savings target, which he says follows more than a decade of focus on savings and efficiency by Auckland Council.
“Since its formation in 2010, Auckland Council has accomplished cumulative operating savings of $2.4 billion. Without the achievement of these savings, rates would be 14 per cent higher,” he says.
“The reports show a hard focus by council on achieving the benefits of amalgamation for ratepayers. Consolidation of legacy council buildings for example has halved the previous level of corporate floor space, cutting energy costs by 50 per cent and saving $180 million over 10 years by avoiding costs such as maintenance and renewal.
“Hitting our 2021/2022 savings target ahead of schedule reflects council’s ongoing drive to increase efficiency and manage expenditure. We will maintain this focus to ensure we continue to provide value for money to ratepayers while delivering the investment in critical infrastructure and services our city needs and that Aucklanders rely on.”
Auckland Council General Manager Value for Money, Ross Chirnside says these savings were able to be achieved due to a variety of factors.
“COVID-19 has played a lead role in all our lives over the past couple of years, and it has impacted our operations at the council as well.
“Achieving value for money is critical and even more important so council can continue to invest in Auckland. Our expenditure has been lower than planned, as we have taken a cautious approach to managing our finances, had different ways of working and delays to capital projects during lockdowns and restrictions, and had staff vacancies we have not been able to fill due to labour market conditions.
“We have made ongoing cost reductions through projects such as a billing system enhancement in Regulatory Services, a review of corporate property maintenance services and the sale of Amenity and Infrastructure Management Services (AIMS).
“Moving forward, we are continuing to look for areas where we can operate more efficiently and reduce costs, and we have a pipeline of further savings initiatives and opportunities. However, it is challenging to find ongoing cost reductions that can contribute to future years’ savings targets, given the financial pressure from the tough economic environment of high interest rates and inflation that we are currently in.”
The Annual Budget 2022/2023, which will be adopted at the end of the month, identifies further operating budget gaps and prioritises the continuing value for money activity for the next council term.