I hereby give notice that an ordinary meeting of the Revenue, Expenditure and Value Committee will be held on:

 

Date:

Time:

Meeting Room:

Venue:

 

Tuesday, 14 November 2023

2.00pm

Room 1, Level 26
135 Albert Street
Auckland

 

Komiti mō te Moni Whiwhi, mō te Whakapaunga me te Uara / Revenue, Expenditure and Value Committee

 

OPEN ADDENDUM AGENDA

 

 

 

 

MEMBERSHIP

 

Chairperson

Cr Maurice Williamson

 

Deputy Chairperson

Cr Wayne Walker

 

Members

Cr Angela Dalton

Cr Daniel Newman, JP

 

Cr Chris Darby

Cr Greg Sayers

 

Cr Julie Fairey

Cr Sharon Stewart, QSM

 

Cr Shane Henderson

IMSB Chair David Taipari

 

IMSB Member Tony Kake, MNZM

Cr Ken Turner

Ex-officio

Mayor Wayne Brown

 

 

Deputy Mayor Desley Simpson, JP

 

 

(Quorum 5 members)

 

 

 

Duncan Glasgow

Kaitohutohu Mana Whakahaere Matua /
Senior Governance Advisor

 

13 November 2023

 

Contact Telephone: +64 9 8902656

Email: duncan.glasgow@aucklandcouncil.govt.nz

Website: www.aucklandcouncil.govt.nz

 

 


Revenue, Expenditure and Value Committee

14 November 2023

 

 

ITEM   TABLE OF CONTENTS                                                                                         PAGE

 

11        Service and financial performance review programme                                            5

 


Revenue, Expenditure and Value Committee

14 November 2023

 

 

Service and financial performance review programme

File No.: CP2023/17125

 

  

 

Te take mō te pūrongo

Purpose of the report

1.       To agree the approach and initial priorities for reviewing service and financial performance of individual council and council-controlled organisation (CCO) departments and activity groups to identify potential value for money opportunities as set out in the Revenue, Expenditure and Value Committee’s Terms of Reference.

Whakarāpopototanga matua

Executive summary

2.       The Revenue, Expenditure and Value Committee was established to assist the council to be cost effective and make financial savings. In achieving this, the committee have been tasked with undertaking a programme of service and financial performance reviews of individual council and CCO departments to identify potential opportunities for improving value for money and savings.

3.       It is proposed that that these reviews be undertaken through scheduled committee workshops, supported by material including a line-by-line analysis of expenditure in PowerBI (with an accompanying explanation of line items, costs, trends and movements) and service profiles for each council and CCO department.

4.       Initial priorities for the review programme have been identified in discussion with the mayor and the committee chair including activity areas within Auckland Transport and council’s Parks and Community Facilities department.

5.       Subject to any changes agreed by the committee, workshops will be set up for these initial review priorities.

Ngā tūtohunga

Recommendation/s

That the Revenue, Expenditure and Value Committee:

a)      whakaae / agree the approach for reviewing service and financial performance of individual council departments and council-controlled organisation activity groups to identify potential value for money opportunities as set out in the committee’s Terms of Reference

b)      whakaae / agree the initial priorities for the service and financial performance review programme as follows:

i)        direct operating expenditure delivered by Auckland Transport, including in relation to the following service profiles:

A)      Auckland Transport Business Support, in particular corporate functions

B)      Public Transport – Bus, Ferry and Other

C)     Parking & Enforcement, in relation to improving revenue

D)     any other spending on marketing and consultation

E)      any other spending on business cases, planning and design work for unfunded transport projects

ii)       direct operating expenditure by Parks & Community Facilities

iii)      unfunded policies and mandates.

 

Horopaki

Context

6.       Since this new council term began, there has been a focus on proactive identification of savings and revenue opportunities and ensuring the cost-effectiveness of funding and delivery across the Auckland Council Group. The establishment of the Revenue, Expenditure and Value Committee and its responsibilities assist with reinforcing this focus. Included as part of the committee’s responsibilities is undertaking a programme of reviews of the service and financial performance of individual council and CCO departments, and requesting  rinvestigation of identified potential opportunities for improving value for money from these reviews.

7.       This report sets out an approach and initial priorities for these reviews.

8.       The service and financial performance reviews to be undertaken by the Revenue, Expenditure and Value Committee are part of a wider programme of reviewing the cost-effectiveness and performance of council services including section 17A[1] ‘delivery of service’ reviews (an update on the section 17A review programme is provided in another report on this agenda).

Tātaritanga me ngā tohutohu

Analysis and advice

9.       The service and financial performance reviews will be undertaken as part of a rolling programme during committee workshops. The confidentiality of these workshops will be considered on a case-by-case basis taking into account legislative withholding reasons[2]  including any specific commercial sensitivity of the area under review.

Supporting material

10.     In order to carry out its responsibilities including undertaking a line-by-line analysis of expenditure across the Auckland Council group, the provision of budget data at a granular level has been a focus for this committee. As part of the direction setting for the Long-term Plan 2024-2034 (LTP), the Mayor requested additional material to allow for more meaningful and granular data about the costs and services of each individual council or CCO department. To facilitate this review of existing budgets through the LTP process and beyond, two key sources of information have been provided. These will form the basis of the material for the service and financial performance reviews:

a)      PowerBI tool – an online tool that provides context and an easy interface to enable committee members to interrogate budgeted expenditure data for council service areas, Auckland Transport, Eke Panuku and Tātaki Auckland Unlimited[3].

b)      Service profiles – to complement the greater availability of financial information (provided through the PowerBI tool), individual budget profiles for each council and CCO department have been provided to committee members as part of the LTP process. Each profile provides a snapshot of activities and services delivered by each council department or CCO major activity, linking approved funding with corresponding outputs, legislation and/or council direction for the Annual Budget 2023/2024.

11.     Due to the commercial sensitivity of certain information that they contain, these information sources have been provided to elected members on a confidential basis. Offers of staff assistance with the Power BI tool have been provided.

Initial priorities

12.     After discussion with the mayor and the committee chair, the following council and CCO departments and activity areas have been identified as initial priorities for the service and financial performance review programme:

i)        Direct operating expenditure delivered by Auckland Transport, including in relation to the following service profiles:

A)      Auckland Transport Business Support, in particular corporate functions.

B)      Public Transport – Bus, Ferry and Other

C)     Parking & Enforcement, in relation to improving revenue

D)     Any other spending on marketing and consultation

E)      Any other spending on business cases, planning and design work for unfunded transport projects

ii)       Direct operating expenditure by Parks & Community Facilities

iii)      Unfunded policies and mandates.

Approach

13.     To support achieving the intended outcomes of these reviews, committee members will consider material including a line-by-line analysis of expenditure in PowerBI (with an accompanying explanation of line items, costs, trends and movements) and the service profile information (which may be supplemented by additional information) in advance of the review workshops and identify questions or areas to the committee chair that they want to consider for optimising value. This will enable the committee chair and the relevant budget holders/managers to agree the scope and approach for each review and any subsequent additional supporting information to be provided to the committee in advance of the workshop.

14.     In addition there will be some standardised questions across all service reviews that will help to provide some consistency and structure for these workshops covering:

·    statutory requirement relating to the service/ activity

·    future fit-for-purpose - readiness to respond to broad future trends/opportunities and/or continued relevance in light of likely changes in context (e.g. technology/digital developments; growing/changing population; climate weather events).

·    key cost drivers for the service area and any additional deliverables/services have been added over time to increase the cost base

·    cost effectiveness – value derived compared with cost to serve/deliver

·    procurement approach related to the sourcing of major contractual commitments and subsequent contract management activity.

15.     Following each workshop, any proposed savings or potential opportunities to improve value for money identified by the committee would be reported through with staff advice to a subsequent committee meeting for resolution with agreed next steps and timelines identified.

16.     The approach for the reviews (including the standardised questions and materials) will be reviewed and refined as the programme progresses to ensure that it is achieving the intended outcomes.


 

Tauākī whakaaweawe āhuarangi

Climate impact statement

17.     For each review, the committee will need to consider the impact that any proposed savings or identified potential opportunities to improve value for money will have on climate change.

Ngā whakaaweawe me ngā tirohanga a te rōpū Kaunihera

Council group impacts and views

18.     Many of the responsibilities of the committee are group-wide including the programme of service and financial performance reviews, line-by-line expenditure analysis, analysis of value for money and efficiency initiatives, and section 17A reviews.

19.     A number of Auckland Transport service/ activity areas are identified as initial priorities and other CCOs will be included as the programme progresses.

Ngā whakaaweawe ā-rohe me ngā tirohanga a te poari ā-rohe

Local impacts and local board views

20.     Local boards have decision-making responsibility for local activities and assets. The budgets and responsibility for delivery of these activities sit across many of council’s departments. As a result, local activities and budgets will be included as part of the service and financial performance reviews of the individual council departments to identify potential opportunities for improving value for money. Any impacts on local service delivery and levels of service and local board decision-making will need to be assessed on a case-by-case basis.

Tauākī whakaaweawe Māori

Māori impact statement

21.     For each review, the committee will need to consider the impact that any proposed savings or identified potential opportunities to improve value for money will have on Māori and outcomes for Māori.

Ngā ritenga ā-pūtea

Financial implications

22.     The purpose of the service and financial performance reviews is to consider the cost-effectiveness of funding and delivery across the council group and to proactively identify savings opportunities. Where identified, these opportunities will be investigated to prove the opportunity (with consequences) and then  be recommended for inclusion as part of the budgeting process and for implementation.

Ngā raru tūpono me ngā whakamaurutanga

Risks and mitigations

23.     There may be cost and resourcing implications relating to the size of the opportunity assessment work required. To the extent that these are unable to be provided for via reprioritisation, they will be identified as part of the opportunity scoping activity.

Ngā koringa ā-muri

Next steps

24.     Subject to any changes agreed by the committee at this meeting, workshops will be set up for the initial review priorities identified in this report. The first of these workshops has been scheduled for Wednesday 13 December 2023 with the programme to continue into 2024.


 

Ngā tāpirihanga

Attachments

There are no attachments for this report.     

Ngā kaihaina

Signatories

Author

Kerri Foote - Executive Officer : CFO Division

Authoriser

Peter Gudsell - Group Chief Financial Officer

 



[1] S17A Local Government Act 2002, introduced by Local Government Amendment Act 2014.

[2] Local Government Official Information and Meetings Act 1987, section 7.

[3] Due to the central government water reforms, Watercare was not included.