Independent review of Auckland CCOs has pointers for QAC – QLDC improvement

Extracts from “Review of Auckland Council’s council-controlled organisations: report of independent panel” July 2020

Miriam Dean QC led an independent review of Auckland Council’s council-controlled organisations, published in July this year.

Many of the points made apply to Queenstown Lakes District Council and Queenstown Airport Corporation – especially in the lack of strategic guidance, accountability, governance and meaningful dialogue between the two. Here are some pertinent extracts from the overview. If you would like to read the full report, here is the link.

Page one:

“The council has the means to make two significant improvements to the model generally. One is to give CCOs clear strategic direction (which would enable them to translate the council’s high-level plans into practical work programmes) and the other is to give CCOs guidance on how to strike a balance between commercial and public interests (which would eliminate a good deal of the criticism levelled at CCOs by the public).

Too much has been made of the notion that CCOs are commercial entities. They are not. Some of their activities are commercial in nature and they must often exercise commercial judgement and business expertise, but at heart they are community-owned entities that exist to provide services to those who partly or wholly fund them – Aucklanders. As a result, they must be more conscious of community expectations and appropriately balance commercial and public interests…”

Page two:

“One of our main tasks was to consider whether CCOs are sufficiently accountable to the council and the community. The short answer is the council has all the necessary levers at hand to ensure accountability, but it is not using them effectively – and in one important respect, not at all. Yet strong accountability (including transparency) is at the heart of good local government – and it also goes both ways. The council’s many plans, policies and strategies offer almost no practical strategic direction to CCOs. They do not contain careful, detailed information about the council’s expectations of CCOs so they can set their work programmes and priorities accordingly…”

“The accountability mechanisms themselves are not without problems either. Letters of expectation, for example, are too vague and fail to give CCOs adequate guidance in preparing their statements of intent. CCOs’ statements of intent vary enormously in length, clarity, presentation and performance measures and are poorly aligned to CCOs’ activities and objectives. CCOs’ reporting to the council is also variable and is missing vigorous discussion of their performance…”

“The council’s governance of, and liaison with, CCOs is not working as it should. Problems include a failure to recognise the importance of relationships with CCOs; a lack of commitment by some councillors to attending CCO induction days, workshops and other opportunities to learn more about their businesses; forums that do not encourage free and frank conversations; poor and patchy information flows; insufficient support for councillors in holding CCOs to account; and insufficient resources for the council unit charged with monitoring CCOs’ activities and budgets, which are considerable.

Finally, there is insufficient face-to-face discussion and meaningful dialogue between CCOs and the governing body, especially in relation to the council’s strategic planning processes for CCOs. No amount of mechanisms will make accountability work – it takes people, and relationships between people, to achieve this…”

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