Auckland Transition Agency

30 October 2010

Economists’ Report Points The Way To Further Council Savings

http://img.scoop.co.nz/media/pdfs/1010/TDB_Report.pdf

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 total annualised savings of $175m to $195m 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.

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.

ends

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