CCO plans - getting to the truth

Auckland Regional Council chairman Mike Lee. Photo / Glenn Jeffrey

The Government's plans for seven council-controlled organisations (CCOs) to run at least 75 per cent of services in the Super City have brought claims and counter-claims about a public lock-out of assets.

Critics say decisions affecting jewels such as the Auckland waterfront and important transport issues will be made by unelected directors far removed from democratic control.

They question if Auckland is moving towards a "corporate city, not a democratic city".

Ministers - including Local Government Minister Rodney Hide, who as Act leader wants to shrink local government to core activities and let the private sector run commercial activities - say transparency and accountability is a key feature of CCOs.

Employers and Manufacturers (Northern) chief executive Alasdair Thompson yesterday said the Government's final piece of Super City legislation made it clear the CCOs would be accountable to the Auckland Council, and ratepayers would hold councillors accountable for CCOs' performance.

The CCO model is not new, but there has been nothing on the scale envisaged for the Auckland Council, which will be the largest council in Australasia.

Auckland councils now operate 34 CCOs, many of them very small. These have been set up by the region's eight councils after public consultation.

Plans for a mega-water CCO and a waterfront development CCO for the Super City were flagged at the outset of the Royal Commission on Auckland Governance.

The Government has gone against the norm by legislating for three CCOs - water, waterfront development and, most contentiously, a mega-transport CCO, to be called Auckland Transport.

It will spend $650 million (more than half the total rates bill) on everything from major roads and public transport to more mundane things such as fixing footpaths.

This means the Auckland Council will not be able to abolish these CCOs without a law change.

The agency designing the changes has recommended four more CCOs - council investments; economic development, tourism and events; major regional facilities; and property holdings. These will not be legislated for.

CCOs are designed to take control from politicians and the public to get things done in a business-like manner. They do not hold public meetings, the directors like to stay under the radar, but they do consult ratepayers at times.

THE FACTS BEHIND THE CLAIMS:

Public meetings:

* CLAIM
Labour's Phil Twyford, Waitakere deputy mayor Penny Hulse and others:
CCOs will not have to hold public meetings and issue agendas and minutes.

* FACT
All CCOs are exempt from those parts of the Local Government Official Information and Meetings Act that require councils to hold public meetings. The public can apply under the act for details of decisions already made. This normally takes at least one month and can drag on for months with appeals to the Ombudsman.

Appointments

* CLAIMS
Local Government Minister Rodney Hide and Transport Minister Steven Joyce:
The Auckland Council will be able to appoint or dismiss CCO directors at any time.

* COUNTER-CLAIM
Phil Twyford:
The Auckland Council will not be able to sack directors without justification and due process.

* FACT
Rodney Hide and Steven Joyce will appoint the initial directors of the seven Super City CCOs for up to three years. Thereafter, the Auckland Council will appoint the directors. Auckland councillors are prohibited from being directors, except for two seats on the Auckland Transport CCO. Neither the Local Government (Auckland Law Reform) Bill – the third and final piece of Super City legislation – or the Local Government Act 2002, both of which contain provisions for CCOs, spell out the process for dismissing directors.

Transport - Accountability

* CLAIMS
Auckland Regional Council chairman Mike Lee:
Auckland Transport is not required by legislation to act in accordance with the requirements of the Auckland Council, nor is it accountable to the council.

* COUNTER-CLAIM
Rodney Hide/ Steven Joyce:
The model includes strong accountability mechanisms between the council and CCOs. Its directors will report to the council at least every three months. They will be monitored by the Auckland Council through a governance and monitoring unit. Aucklanders will know more about the performance of its CCOs than ever before.

* FACT
The Local Government (Auckland Law Reform) Bill sets up Auckland Transport, but nowhere in the bill does it say it 'must' act in accordance with the requirements of the Auckland Council. Instead, it says the council "may" require a CCO to "include in its statement of intent a narrative on how the organisation will contribute to the council's … objectives and priorities for Auckland". The objective of Auckland Transport is to "undertake its functions in a way that contributes to an affordable, integrated, safe, responsive, and sustainable land transport system for Auckland". Under the Local Government Act 2002, CCOs must report to the council every six months. Under the Local Government (Auckland Law Reform) Bill, the Auckland Council "may" require it to report every three months. CCOs will be under the watch of a governance and monitoring unit, but a lack of policy grunt within the council to control them is a concern to local government legal specialist at Kensington Swan, Grant Hewison.

Transport - Strategy

* CLAIMS
Mike Lee:
Auckland Transport is not required to give effect to the regional land transport strategy, or any other Auckland Council policy that relates to the transport strategy.

* COUNTER-CLAIM
Rodney Hide/ Steven Joyce:
The regional land transport programme (a list of projects and spending priorities) has to be consistent with the regional land transport strategy. The public will have a say on transport matters through consultation on the transport strategy, funding applications, the prioritisation of projects through the regional programme and local board plans.

* FACT
Under the Local Government (Auckland Law Reform) Bill, Auckland Transport has to prepare a regional land transport programme for Auckland in accordance with the Land Transport Management Act 2003. This act says the programme "will contribute to a region's outcomes that are identified in the relevant regional land transport strategy".

Transport - Resource management

* CLAIMS
Mike Lee:
Auckland Transport will not be required to have regard for the wider land use and development objectives of the Auckland Council.

* COUNTER-CLAIM
Steven Joyce:
Auckland Transport will have to comply with statutory land use plans. Consultation on the implementation of transport activities will also occur under the Resource Management Act and other regulatory requirements that will impose their disciplines on Auckland Transport, as well as giving process rights to those affected by an activity. There is no requirement in legislation for Auckland Transport to give effect to the spatial plan.

* FACT
Auckland Transport will have to follow regulatory requirements under the Resource Management Act.

Transport - Intentions

* CLAIMS
Mike Lee:
The Auckland Council may change Auckland Transport's statement of intent but, unlike the Crown Entities Act, the bill does not require Auckland Transport to act in accordance with the statement of intent.

* COUNTER-CLAIM
Steven Joyce:
In an introduction paper on the final Super City bill in December, he said the council "may" require the statement of intent of a CCO to tell how the CCO contributes to the council's wider objectives and priorities for Auckland.

* FACT
The key word here is "may", not "must". Under the Local Government Act 2002, statements of intent are broad-brush documents that set out the objectives and performance targets. The day-to-day workings of Auckland Transport will be left to the board and hundreds of bureaucrats.