CCO Reform: Overview
What is CCO Reform?
Council-controlled organisation (CCO) reform is Mayor Wayne Brown’s policy to take back control of CCOs and stop wasteful spending. As a key initiative of the mayoral proposal, the policy is being developed and deliberated as part of council’s annual budget process. Any changes would take effect from 1 July 2025.
The mayoral proposal supports narrowing the focus of CCOs to delivery, and returning policy, strategy and planning to council, which is consistent with the original intent of the Royal Commission on Auckland Governance. It also proposes bringing some CCO functions and services back in-house under council control.
CCO reform is a high-level assessment of the CCO model and system performance. It does not assess the performance of individual CCOs, and there is no proposed change to funding or service levels, or activities currently delivered by CCOs.
It does, however, focus on the functions and services delivered by Auckland Transport, Eke Panuku, and Tataki Auckland Unlimited. For each of these CCOs, the following options will be considered: (1) full disestablishment, with all CCO functions and services transferred to council, (2) partial reform, with council responsible for some functions and services including policy, strategy and planning, and the CCO responsible for delivering remaining services, and (3) the status quo.
Watercare and the newly established Auckland Future Fund are not included in the scope of the proposed reform, and Port of Auckland Limited is not a CCO.
Why do we need CCO reform?
Council-controlled organisations were introduced when Auckland Council was formed in 2010. After four reviews and a raft of recommendations to improve the CCO model, structural reform is required to address the challenges that persist, including: (1) strategic misalignment, (2) operational confusion, (3) wasteful spending and duplication, (4) insufficient democratic accountability, and (5) low public trust and confidence.
To put this in context, CCOs absorb over half of Auckland Council’s current annual operating budget of around $6.4 billion and control two-thirds of the region’s publicly owned assets, valued at almost $47 billion, and are funded in part by 40 per cent of total rates.
Systemic issues, like strategic misalignment, are often the result of flaws in organisational structure, systems and culture. They arise from the interactions, dependencies and conflicts between different parts of an organisation. Addressing these challenges requires a whole system approach that tackles the root cause.
What are the main goals of CCO Reform?
CCO reform aims to ensure the CCO model is fit for purpose, and the council group as a whole is fit and better able to realise Auckland’s growth potential in a strategic and sustainable way. There are three main goals: (1) to improve strategic alignment and integration between council decision-making and CCO activities, (2) to increase democratic accountability and transparency around the functions and services delivered by CCOs, and (3) to deliver better value and better outcomes for Aucklanders, by ensuring group operations and service delivery are more focused, effective, and efficient.
What is proposed for Auckland Transport?
The mayoral proposal supports a full reset of AT; transferring all policy, strategy and planning functions for transport to council.. It is also proposed that back-office functions be provided under council’s group shared services programme. Legislation change is required to make structural changes to AT. Mayor Wayne Brown and Transport Minister Simeon Brown are in advanced talks. Both agree reform is needed.
What is proposed for Eke Panuku?
The mayoral proposal supports bringing urban regeneration and property management back in-house under council control, to ensure better alignment and integration with other growth-related activities, which would result in the disestablishment of Eke Panuku. All policy, strategy and planning functions would also return to council.
What is proposed for Tātaki Auckland Unlimited?
The mayoral proposal supports bringing economic development, major events, and destination marketing back in-house, and returning all policy, strategy and planning functions to council. Tātaki Auckland Unlimited would retain its trust structure to manage regional facilities, including Auckland Art Gallery, Auckland Zoo, theatres and stadiums.
What is the timeline for proposed reform?
Any changes would take effect from 1 July 2025, at the start of the next financial year. As a key initiative of the mayoral proposal, CCO Reform is being developed and deliberated as part of the council’s annual budget process, and follows much the same timeline. Decisions on the CCO model and structure will be made in December, to be followed by advice on an approach to implementation.
Is there an appetite for change?
Yes, initial feedback indicates a strong appetite for change, and support for the overall direction of the proposed reform.
CCO Reform: Changes and Impacts
What is the proposed structural change?
Under CCO reform, any proposed structural change should be consistent with the original intent of the Royal Commission on Auckland Governance; narrowing the focus of CCOs to delivery, and returning policy, strategy, and planning to council.
How will the proposed reform affect local services?
CCO reform aims to deliver better local services for Aucklanders. It focuses on more effective, efficient, and accountable service delivery by bringing some CCO functions and services back in-house under council control. This would help streamline operations and improve coordination across the council group. There is no proposed reduction in funding or service levels, or activities currently delivered by CCOs. Any changes would be implemented with as little disruption to services and customers as possible.
How will the proposed reform affect local democracy?
One of the main goals of CCO reform is to increase democratic accountability and transparency of CCO functions and services. Returning policy, strategy, and planning functions to council, and increasing delegation to local boards to make local decisions would shift the balance toward public interest, giving Aucklanders more direct influence of decisions that affect their city. Bringing some CCO functions and services back in-house would make them more visible to the public and media. CCO reform itself may increase public engagement and debate around local governance structures.
How will the proposed reform affect local business?
CCO reform aims to ensure the CCO model is fit for purpose, and the council group as a whole is fit and better able to realise Auckland’s growth potential in a strategic and sustainable way. The mayor would expect to see a more business-friendly environment in Auckland as a result of better integrated decision-making and planning across transport, land use, and economic development; the council’s key levers for productivity and growth. This will help get Auckland moving.
How will the proposed reform affect Aucklanders?
One of the main goals of CCO reform is to deliver better value for money and better outcomes for Aucklanders. A more cohesive approach to Auckland’s growth and development has the potential to significantly improve the quality of life for Aucklanders, including improved urban planning and infrastructure, better housing and transport options, economic opportunities, and environmental benefits.
How will the proposed reform affect CCO staff?
The potential impact on individual roles is not yet clear, as no decisions have been made. However, we would emphasise there is no proposed change to funding or service levels, or activities currently delivered by CCOs
As a key initiative of the mayoral proposal, CCO Reform is being developed and deliberated as part of the council’s annual budget process, and follows much the same timeline. Any changes would take effect from 1 July 2025, at the start of the next financial year. Decisions on the CCO model and structure will be made in December, to be followed by advice on an approach to implementation.
How will the proposed reform affect council?
Under CCO reform, council would have to develop new capabilities in areas brought back in-house, such as economic development and urban regeneration. Over time, this would help rebuild council’s internal strategic capabilities and knowledge base, making it less dependent on outsourcing and contractors. Insourcing would also better align service delivery and resource allocation with council’s broader strategic priorities.
How will the proposed reform affect councillors?
Under CCO reform, councillors would take on more strategic decision-making across new activities, calling for greater leadership and accountability. However, they would be better resourced with additional staff advice and support. Increased delegation to local boards to make local decisions would also help mitigate any potential increase in workload.
How will the proposed reform affect local boards?
The proposed reform aims to make CCOs more accountable and responsive to local boards and community needs, by returning all policy, strategy, and planning functions to council, and increasing delegation to local boards to make local decisions in consultation with mana whenua. Bringing urban regeneration back in-house could provide a greater governance role for local boards over local placemaking and public realm projects. The full impacts will depend on details still to be determined through deliberation and implementation.
How will the proposed reform affect mana whenua?
Under CCO reform, mana whenua engagement would be enhanced through increased delegation to local boards to make local decisions in consultation with the iwi or hapu that holds mana whenua over that area. Bringing some CCO functions and services back in-house could provide opportunities for direct engagement between mana whenua and council on certain issues, and improve consistency in the way iwi or hapu are consulted, rather than engagement being mediated by different CCOs in different ways. The full impacts will depend on details still to be determined through deliberation and implementation.
