Desley Simpson: Auckland Council balancing books in an unpredictable pandemic

'It's Auckland Council's job to support businesses in surviving this season so they can thrive in the next. For as they grow, so does Auckland's economy.' Photo / Dean Purcell

Opinion

OPINION

For many organisations, looking back at the books from the past financial year has them bracing for impact. Auckland Council was no different.

The council should be able to demonstrate to ratepayers it is always striving for greater efficiencies and prove tangible improvements to the delivery of services every year.

In light of a once-in-a-generation drought and a global pandemic, one may have expected our recent annual report to be full of bad news, but it wasn't.

In the Annual Report 2020/2021, the council delivered more for Aucklanders and saved the most money it ever has. The council reported a $2.5 billion infrastructure investment, just $110 million short of its biggest-ever spend.

Auckland Council spent $1.1 billion on developing Auckland's roads and public transport assets and $195 million on new water sources - delivering an extra 90 million litres per day to support the regional recovery from the drought.

Home to around 1.7 million people, investments like this are necessary to support Auckland's growing population. Infrastructure is the most crucial asset to support this growth, but also, the most expensive.

Sitting alongside this near-record capital investment, was delivery on an absolute record level of savings. The council has never set a savings target anywhere near $120 million yet achieved and exceeded it, delivering more than $126m in just one year.

To put this in context, this is greater than the rates collected last year from any one of 17 out of Auckland's 21 local board areas. These savings were made possible through a variety of means including hard-won efficiencies in professional services and outsourcing work where possible.

The council and all but two CCOs reduced staff numbers and kept core operating costs $50 million below the previous year. In essence, the council delivered more for less.

However, the council's finances do not exist in a vacuum. In some ways, our books can be seen as a reflection of the health of the regional economy.

In the early stages of recovery, Auckland's economy fared better than many predicted.

Increased demand for property provided revenue from property development activities.

Infrastructure growth charges, development contributions and consenting revenue exceeded the emergency budget by a total of $270 million.

Desley Simpson. Photo / Supplied, File

As Auckland Council moves into the next recovery phase, many of the challenges that it was preparing for with the emergency budget sadly remain. Border closures and Covid-19 lockdowns continue to severely impact fee revenue from events, shows and festivals. Revenue from our cultural venues and community facilities such as the zoo, art gallery, pools and libraries are also impacted, having been closed for extended periods.

Public transport patronage remains extremely low, well below pre-Covid-19 levels and time can only tell how quickly Aucklanders will jump back on buses, ferries and trains once the city starts opening back up.

One could be forgiven for originally thinking 2020 was an isolated, tough battle. In reality 2021, for many organisations, has rivalled 2020 for its challenges and major uncertainty beyond this point remains.

The emergence of new virus variants, the longest ever Covid-19 alert level 4 lockdown, continued border restrictions, skill shortages and challenges with importing infrastructure materials mean we must stay vigilant to future risks and maintain our ability to adapt.

Looking forward, the council and government must work together to support the city through the mounting economic and social costs of lockdowns while working towards higher vaccination rates.

The gradual lifting of level 3 restrictions will do wonders for the mental health of some but we know that, for many Aucklanders, feelings of hopelessness are driven by the rapidly reducing viability of their businesses in these conditions.

It's Auckland Council's job to support businesses in surviving this season so they can thrive in the next. For as they grow, so does Auckland's economy.

We must provide the services that Aucklanders need in the most efficient way, to provide a solid platform for recovery.

The council has achieved savings in the "easy" areas, and in some of the more challenging areas too. Auckland Council continues to seek efficiencies and it has locked in a further $90 million of ongoing savings each year for the next 10 years.

I want Aucklanders to have an assurance that the resilience the council achieved with the emergency budget has paid off.

Our Covid-19 impacts are deep, wide and ongoing, so this may well be our most difficult phase yet.

• Desley Simpson is an Auckland councillor and chairwoman of the Finance and Performance Committee.