John Carter MP
National Party Local Government Spokesman

12 June 2006

Audits of long-term council plans cost $8 million

The auditing of local councils’ long-term council community plans has been a farce, with $8 million of ratepayers hard-earned money being wasted on them, says National’s Local Government spokesman, John Carter.

Under the Local Government Act 2002, all councils are required to produce a long-term council community plan (LTCCP) outlining work programmes for the next 10 years to promote the social, economic, environmental and cultural wellbeing of their communities.

“But the auditing exercise has been a waste of up to $8 million of ratepayers' money,” says Mr Carter. “It’s a monument to the lack of trust that central government has in local government. Several mayors I’ve spoken to have called it a waste of both time and resources.”

Mr Carter says that of the 77 LTCCP audits, 74 have received a complete clearance but three have not.

"In these particular cases, the comments are just matters of opinion about future assumptions.

"In one case, a council's plan was criticised for a lack of accurate inflation predictions for the next 10 years.

“Under these plans, councils have to make a number of assumptions and then basically guess what inflation will be 10 years down the track.

“Not even Treasury can predict inflation rates that far ahead. They and other forecasters have difficulty even predicting inflation a year ahead.

“The lack of effectiveness of audits has also been shown up. For example, the audit of the Wanganui District Council's plan missed a $6 million over-run on a project in the plan. That's not good enough."

ENDS

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