A world-first hybrid body combining central and city government could soon plan the use of $12 billion of taxpayer-funded social spending in Auckland.

The Royal Commission on Auckland Governance says the results of such massive social spending "fall short" of what is needed to address critical social issues such as helping all children to get the best start in life.

It proposes a new Social Issues Board combining people from the new Auckland Council and central Government to plan a "redistribution of central and local government resources to address the critical social issues".

Former Ministry of Women's Affairs head Elizabeth Rowe, who prepared the commission's background report on social issues, said she was not aware of any other city in the world that controlled social spending through a similar hybrid body.

But it was welcomed yesterday by regional agencies ranging from the Auckland City Mission to the Employers and Manufacturers Association.

The commission says the new Auckland Council should take a central role in planning social wellbeing because it is critical to Auckland becoming "a world-class city".

"Auckland does poorly on many indicators of social wellbeing. The extent of deprivation is significant, and it equates to lost potential."

It points to extreme inequalities across the region on indicators such as infant mortality, with infants born in Manukau twice as likely to die in their first year as those in Rodney.

More than half of all children in the country's poorest 10 per cent of school districts are in the region.

"The inequalities within the region are significant and unacceptable," it says. "The new governance structure must enable these inequalities to be addressed if Auckland is to become a leading Asia-Pacific city."

It says national taxpayers spend $11 billion to $12 billion a year in the region through the Ministries of Social Development, Health, Education and Justice, Housing NZ and the Accident Compensation Corporation.

"It is therefore unlikely that the challenge of reversing poor outcomes lies with resource shortages, but rather with ensuring that current resources are applied where the greatest needs lie."

It says the region's four "critical social issues" are:

Helping all children get the best start in life.

Improving the transition of young people from school to work, further education or training.

Improving public transport, particularly to disadvantaged communities.