I hereby give notice that an ordinary meeting of the Finance and Performance Committee will be held on:




Meeting Room:



Tuesday, 21 March 2017


Reception Lounge
Auckland Town Hall
301-305 Queen Street


Finance and Performance Committee








Cr Ross Clow


Deputy Chairperson

Cr Desley Simpson, JP



Cr Dr Cathy Casey

Cr Mike Lee


Deputy Mayor Bill Cashmore

Cr Daniel Newman, JP


Cr Fa’anana Efeso Collins

Cr Dick Quax


Cr Linda Cooper, JP

Cr Greg Sayers


Cr Chris Darby

Cr Sharon Stewart, QSM


Cr Alf Filipaina

IMSB Chair David Taipari


Cr Hon Christine Fletcher, QSO

Cr Sir John Walker, KNZM, CBE


Mayor Hon Phil Goff, JP

Cr Wayne Walker


Cr Richard Hills

Cr John Watson


IMSB Member Terrence Hohneck



Cr Penny Hulse



Cr Denise Lee



(Quorum 11 members)




Mike Giddey

Senior Governance Advisor


16 March 2017


Contact Telephone: (09) 890 8143

Email: mike.giddey@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz




Finance and Performance Committee

21 March 2017



ITEM   TABLE OF CONTENTS                                                                                        PAGE


21        Auckland's major cultural heritage institutions:  proposed independent review 5   



Finance and Performance Committee

21 March 2017



Auckland's major cultural heritage institutions:  proposed independent review


File No.: CP2017/03975





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.



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.





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. 



Remain with status quo

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. 

Review single institutions

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.

Review selected major institutions but limit to structural arrangements (not strategic priorities)

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.

Independent review of strategic purpose of cultural heritage investment, and governance structures to support it (recommended)


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.

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. 


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. 


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. 








Investing in Auckland cultural infrastructure (the Walker report)



Letter, Auckland Museum and RFA to Auckland Council, 16 November 2015






Edward Siddle - Principal Advisor


Alastair Cameron - Manager - CCO Governance & External Partnerships

Phil Wilson - Governance Director

Sue Tindal - Group Chief Financial Officer


Finance and Performance Committee

21 March 2017







































































Finance and Performance Committee

21 March 2017