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Finance and
Performance Committee
21 March 2017
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Auckland's
major cultural heritage institutions: proposed independent review
File No.: CP2017/03975
Purpose
1. To
consider establishing an independent review of Auckland Council’s
investment in Auckland’s major cultural heritage institutions.
Executive
summary
2. The
cultural heritage sector comprises an important network of organisations that
preserve, reflect and promote Auckland’s rich diversity, identity and
sense of place. It provides a wide range of benefits to Aucklanders,
including educational, social, and economic opportunities. Auckland Council
makes a significant investment in the region’s cultural heritage sector,
providing more than $60 million in annual funding to major institutions.
However, those institutions operate largely independently under their own
governance arrangements, including legislative regimes designed for the
pre-amalgamation context.
3. The
existing governance system restricts Auckland Council’s ability to
provide strong oversight of its investment, to appropriately develop strategic
investment priorities for the sector, or to ensure transparency, accountability
and value for money on behalf of ratepayers.
4. While
the Auckland Plan and Auckland’s Arts and Cultural Strategy (Toi Whitiki)
set the goal of creating a complementary regional network of cultural
organisations, few concrete steps have been taken since amalgamation to achieve
this outcome.
5. Implementation of change is most likely to succeed when it is based
on well-informed analysis of the challenges and opportunities and when there is
a consensus of support. It is therefore recommended that Auckland
Council commission an independent review of its investment in the
region’s major cultural heritage institutions.
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Recommendation/s
That the Finance and
Performance Committee:
a) approve
that an independent review of Auckland Council’s investment in major
cultural heritage institutions is undertaken.
b) delegate to the Environment and Community Committee the
responsibility for establishing the review programme, including setting the
terms of reference, appointing a review panel that includes domestic and
international expertise, developing an engagement plan with affected
institutions, and communicating the purpose and outcome of the review to
Aucklanders.
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Comments
Context
6. Auckland
Council provides funding of approximately $45 million annually through levy
arrangements under the Museum of Transport and Technology (MOTAT) and Auckland
War Memorial Museum Acts. Another $16 million is distributed under the
Auckland Regional Amenities Funding Act (ARAFA). Additional money is spent
through Regional Facilities Auckland (RFA). The institutions themselves
manage assets worth over $1 billion (land, buildings, and collections).
7. Auckland’s
cultural heritage institutions operate largely independently under their own
governance and funding arrangements. The current arrangements are:
· Auckland
Museum and MOTAT have their own legislation, though council has a role in their
board appointments.
· ARAFA
provides funding to 10 wholly independent organisations: the Maritime Museum,
Stardome Observatory and Planetarium, Auckland Philharmonia, Auckland Festival,
Auckland Theatre Company, New Zealand Opera, Auckland Regional Rescue
Helicopter, Coast Guard Northern Region, Surf Live Saving Northern Region and
Watersafe Auckland.
· Auckland
Art Gallery is part of RFA.
· smaller
organisations are direct-funded by council.
8. The
Auckland Plan and Toi Whitiki set the goal of creating a complementary regional
network of cultural organisations. However, little has been done since
amalgamation to drive towards this goal or to address governance challenges in
the region’s cultural heritage sector.
Problem definition
9. Governance
across the sector is fragmented, designed for the pre-amalgamation period and
presents the following challenges:
· The
current governance framework does not enable Auckland Council to develop a
clear view of its strategic investment priorities for the sector, nor to
achieve those priorities. This restricts the council’s
ability to ensure ratepayers are receiving full value for money from
investment.
· The
current governance structures prevent collective agreement on strategic
outcomes and investment priorities. Practical cooperation can be
challenging, for example it is not possible to get a single entry ticket to
multiple venues.
10. Auckland
also faces a range of significant specific short-medium term issues.
· MOTAT
has facility, governance and organisational challenges. A draft
masterplan for capital improvements is being developed and will require
significant investment.
· The
Maritime Museum’s waterfront lease expires in 2027. Decisions on
the lease renewal depend on defining the Maritime Museum’s future role
and location in refreshed waterfront plans. It is funded through ARAFA,
making it difficult to align investment decision-making with other
museums.
· Stardome’s
lease on Maungakiekie may not be renewed beyond 2025 and decisions about its
purpose and location need to be made. Stardome is also funded through
ARAFA, making it difficult to achieve coordinated investment
decision-making.
· Collection
storage facilities to preserve Auckland’s taonga are a long-identified
need across the institutions, including for Auckland Libraries and its
important heritage collections. A 2011 project estimated the cost of such
facilities at around $80 million.
· Tension
exists over annual levy processes for Auckland Museum and MOTAT. Council
is the major funder for these institutions (79 per cent and 82 per cent
respectively) but is unable to exercise rigorous oversight of that
spending. As the levy caps are likely to rise with upcoming property
revaluation, there is a risk the museums will significantly increase their
levies, with additional costs to ratepayers.
11. In
addition, there are some upcoming opportunities for the region, but without a
clear sense of strategic priorities, the value of these opportunities is
difficult to assess. This includes space on the waterfront for a
signature cultural facility and ongoing central government interest in
‘Te Papa Manukau’, a proposed collections and exhibition centre.
12. Finally,
there are a range of smaller institutions across the region that contribute to
the cultural fabric of Auckland. Their needs, and their potential to
benefit from a more coherent governance structure of major cultural heritage
institutions may need to be considered.
Previous work
13. RFA and Auckland Museum commissioned a report in 2015 to identify
the strategic investment needs and opportunities across the cultural heritage
sector (Attachment A, the ‘Walker report’). The Walker report
concluded that Auckland’s rapid changes needed to be reflected better by
the cultural sector. This meant pursuing an authentic Auckland story
(with a focus on the mana of Māori cultural values) and strengthening
social cohesion through participation and learning (particularly of young
people). The Walker report concluded that this would be best achieved by
a focus on an ‘ecosystem’ of institutions rather than a collection
of single purpose organisations, and on the expectations of future Aucklanders.
14. RFA
and Auckland Museum expressed their joint support for a strategic governance
review when they submitted the Walker report to council in late 2015
(Attachment B).
Discussion and options
15. A
review process is most likely to succeed when it is based on well-informed
analysis of the challenges and opportunities, there has been robust stakeholder
participation, and there is a consensus of support. A proposed review
would seek to provide that evidence by engaging with the sector and making
recommendations.
16. The
key purposes of a review would be to:
· Clearly
set out current governance arrangements and the advantages and disadvantages of
those, for the institutions, for council as major funder, and the public who
benefit from cultural investments. This should take into account the
cultural independence of, and the benefits of long-term financial security for
institutions. It should examine the degree to which arrangements allow
for transparency and accountability to Aucklanders and the achievement of
cultural outcomes for Auckland.
· Make
recommendations about the key strategic goals the cultural heritage sector in
Auckland should be seeking to achieve, building on the 2015 Walker report for
council referred to above and taking into account the Auckland Plan and Toi
Whitiki.
· Clearly
identify what structural and governance changes should be made to achieve the
strategic goals of the institutions and council through greater coherence,
accountability, and value for money.
17. A
number of options for a review are available to council as summarised in the
table below.
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Option
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Comment
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Remain with status quo
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This will not address the current
tensions in governance and funding investment. It exposes council to
financial risk and maintains the fragmentation across the sector.
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Review single institutions
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This is a limited scope
option which could begin the process of assessing change. However, it
does not address wider strategic challenges or achieve collaborative change.
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Review selected major institutions but limit to
structural arrangements (not strategic priorities)
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This is effectively the
status quo – staff time (RFA and council) has already been dedicated to
reviewing arrangements and trying to encourage change, and little progress
has been made. Without a sense of strategic purpose for council investment,
it is difficult to determine what the best structural arrangements for
governance are.
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Independent review of strategic purpose of cultural
heritage investment, and governance structures to support it (recommended)
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Improved strategic governance is most
likely to be achieved when based on evidence and by consensus, and this
option offers the institutions the prospect of secure strategic roles (such
as greater sector leadership for the Auckland Museum), and a clearer sense of
the future investments likely to be supported by council.
This option could vary in the scope it
encompassed – this could be discussed separately from the concept of an
independent review.
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18. An
independent review is recommended by staff. It is an achievable option
which seeks to build a consensus about the issues, needs, and strategic
priorities between council and the institutions. An approach driven by
council risks being seen as biased by the institutions, and a short-term
cost-cutting exercise. This is not the intent of the review. Conversely,
an approach driven by the sector is unlikely to overcome current
fragmentation.
19. A
review should be undertaken by a person or panel with expertise in governance,
accountability, and funding, but also well-versed in delivery of cultural
outcomes and the needs of cultural heritage institutions. The panel would
need to be respected by Auckland’s stakeholders, but also central
government, given the potential for recommendations for legislative change. It
would be desirable to have domestic and international experience and expertise
included on the panel.
20. A
review should not consider the quantum or scale of council’s investment
in the sector. This is a separate question, the responsibility for which
lies with the governing body.
Consideration
Local
board views and implications
21. Decision
making and oversight in respect of regional activities is the responsibility of
the governing body.
Māori
impact statement
22. The Auckland
Plan places Māori at the heart of the city’s
future development. Cultural outcomes are a key way in which this can
occur. Despite some of the strong efforts of our institutions, especially
Auckland Museum, in the last few years, a more strategic and coherent approach
to meeting the cultural needs of mana whenua and mataawaka Māori would be
beneficial.
23. Detailed
consideration of how Māori outcomes should be
incorporated will be considered when a terms of reference is developed.
Implementation
24. If
this committee approves that an independent review should take place, staff recommend that it delegates to the Environment and Community
Committee the power to establish the terms of reference, appoint a review
panel, develop an engagement plan with affected institutions and communicate
the purpose and outcome of the review to Aucklanders. A review would ideally
take place this year and report back before the end of 2017.
25. Staff
can advise the Environment and Community Committee on possible scope options, a
process for appointing the review panel, and the skills necessary for the
reviewers.
26. The
budget for the review will be considered alongside the development of terms of
reference.
Attachments
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No.
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Title
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Page
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a⇩ 
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Investing in Auckland cultural infrastructure (the
Walker report)
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11
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b⇩
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Letter, Auckland Museum and RFA to Auckland Council,
16 November 2015
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81
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Signatories
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Author
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Edward Siddle - Principal Advisor
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Authorisers
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Alastair Cameron - Manager - CCO Governance &
External Partnerships
Phil Wilson - Governance Director
Sue Tindal - Group Chief Financial Officer
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