Council “savings” questioned

Auckland Council’s latest performance report shows savings of $95.7 million, exceeding the annual $90 million target.

Of the total, $61.5 million was from ongoing cost reductions, while $34.2 million was from one-off expenditure reductions such as project delays.

The performance report said the target “was exceeded due to a strong focus on cost reduction in the current financial circumstances”, but Councillor Christine Fletcher wasn’t buying it.

“I realise that it is a difficult time, a transitional time and the way council staff presented today is quite clear, except on one point – the way that we characterise project delays as somehow contributing to our savings targets,” Fletcher said.

Fletcher raised the same issue last year and said that while it may seem pedantic, she was concerned that the way savings were presented, distorted council’s financial position to the public.

She asked why delays were used to meet the saving’s target.

Financial and business performance general manager Nicola Mills said project delays resulted in one-off savings.

“When we prepare our budgets, we make assumptions around when any particular project will be completed – if a project is delayed by six months, those running costs won’t start to be incurred,” Mills said.

“It does give us savings compared to what we budgeted for.”

Fletcher said the choice to use delays could confuse the public.

“Does it genuinely represent a saving? I know what you are trying to present but is that the best way to express it?”

Mills said the finance team would take on the feedback and see if they could be more clear on how savings were presented.