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Thursday
Nov272014

Auditor-General Issues Stern Warning

The Auditor-Geneeral Lyn Provost has issued a stern and timely warning to councils this week regarding their propensity to postpone capital works (infrastructure, renewals and services) for short term (electoral) benefit - exactly what has hapened here since the advent of this present Council four years ago. 

The really hard hitting stuff came in the final few paragraphs:

Local government infrastructure and capital management needs to improve to meet the challenges ahead

All this means that local authorities need to "step up" in managing their infrastructure assets. For instance:

  • The focus needs to be on sustainable services and long-term fiscal strategy, not short-term budgets.
  • Planning and risk management exercises must inform decision-making. All those involved with asset services need to talk and work closely – planners, asset managers, finance officers, engineers, and operational departments. Budgeting must be connected to planning, asset management, service management, and risk management.
  • Although local authorities tend to have a lot of data, they do not necessarily use it well, or use the best data, to support decision-making.

And:

In 2015, my appointed auditors for local authorities will audit the 2015-25 long-term plans, which will include 30-year infrastructure strategies for the first time. Because these strategies are a new requirement, the 2015 versions are likely to be the basis for improvement and development in future long-term plans.

However, these infrastructure strategies will cover periods during which local authorities will need to make decisions about, and changes to, the services and service levels that they can sustainably and affordably provide.

Councillors and communities need good information so they can understand and make choices about the services that are so important for their future. We have found that the information to enable understanding and choices is not consistently available – this must change.

Read between the lines, and you will understand that this warning applies to our Council as much, or more  as it does to any other council in this country. New councils in particular are notorious for formulating macho cuts to renewals and services in order to meet election rate promises, or to ensure their own survival through the next election. Sound familiar?

The consequences of these cuts, and the development contribution shortfalls that occured in the first three years here are now obvious. Meanwhile our erstwhile councillors are struggling with the need to incorporate acceptable loan repayment and interest liability provisions into their Ten Year Plan that already has so much Day inspired fluff and flannel on economic development and 'feel-good' (Zoom-Zone!) projects. The resulting rating projections will surely shock when they are finally established early next year.

That assumes of course that Leach has no other rabbits up his hat on further renewal and service postponements. Should that be the case, he will need to look very closely at the warning issued by Lyn Provost. And it will not take too long for the effects of postponed roads and water projects to become obvious.

 

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