Sir Don McKinnon: Merging CCOs will be good for Auckland

A number of important institutions remain 'outside the tent' of Auckland Council control and this is an on-going problem, writes Sir Don McKinnon. Photo / Dean Purcell, file

Opinion

COMMENT

When I was asked to chair the new Regional Facilities Auckland back in 2010, my first question was: how did this collection of assets come together and what about the museums, Eden Park and others that were not part of this new organisation?

I was told the Government "just ran out of time and the RFA became a catch-all at the end".

So there it was - the last Council-Controlled Organisation (CCO) created - with some facilities and not others, an uncertain budget and an empty balance sheet for the first 18 months. A huge challenge for myself with a new and very competent board.

Since the creation of the new Auckland, the CCOs have been a key piece of the puzzle, managing major public assets, delivering key essential services, and providing cultural, leisure and entertainment opportunities for Aucklanders.

Sir Don McKinnon. Photo / Supplied

It was timely, then, that a decade on mayor Phil Goff called for a comprehensive review of the CCOs. Miriam Dean and her fellow review panellists have done a remarkable job wrestling with the legacy of Auckland's Super City creation. Auckland, they conclude, must continue towards integration and consolidation of civic facilities and organisations.

This would be achieved partly through the proposed merger of Auckland Tourism, Events and Economic Development (Ateed) and RFA and, to that, I would agree.

Such a move would ensure Auckland completes the mission that was set when the council was consolidated from one regional council and seven territorial authorities into one, and a range of key delivery-focused functions were grouped into five Council-Controlled Organisations (CCOs).

The original Super City merger has been good for Auckland. I know of no big cities that have successfully grown the political boundaries to keep up with the growth in population.

It was essential to get ahead of the massive jigsaw puzzle we inherited, where many pieces did not fit.

In the cultural and sporting facilities a number of important institutions sat outside the tent and this has remained an ongoing problem for Auckland.

The CCO Review is a key opportunity to address those gaps and bring greater clarity to the natural broad division of all facilities.

It is also important to recognise the reasons for the creation of the CCOs as recommended by the Royal Commission.

They were formed to improve the effectiveness and efficiency of Auckland's Local Government by taking an Auckland-wide approach and separating the governance provided by the political arm, which sets parameters and expectations, from delivery - the day-to-day implementation by these organisations.

The approach allowed for operationally focused organisations to make decisions that were devolved from council.

They also achieved economies of scale through bringing similar assets, functions or services together. In the case of RFA, operating Auckland's three stadiums - Mt Smart, Western Springs and North Harbour - under one umbrella saved Auckland ratepayers $1 million a year.

Many of these functions also had commercial remits and earned revenue or could recover costs for the city, such as Auckland Transport through gathering fare revenue; RFA's stadiums and performance venues under Auckland Stadiums and Auckland Live; or key Auckland events managed by Ateed or RFA.

This is significantly different to the council itself, which attracts funding through rates.

Meanwhile, it was intended that accountability would be achieved through the governance arrangements. The council has always had the power to appoint the chairs and board members to the CCOs and to have regular reporting from the CCOs to ensure alignment with council strategy and policy.

The full merger of Ateed and RFA has real merit in my view. It brings together the tourism, economic growth, investment and event attraction with Auckland's key cultural, performance, sporting, leisure and business event infrastructure and assets.

Auckland Live events, such as film festivals at the Civic, have only tapped the potential for cultural attractions. Photo / Supplied, file

This has the potential to generate operational efficiency and increased value for Auckland in areas such as event attraction; supporting the entertainment, sport, arts and live performance sectors, at a time when all are hurting, and through leveraging the portfolio of venues and assets into tourism, business events and investment.

What's more, there is the possibility of achieving the promised integration with other important institutions in Auckland that currently are funded by but sit outside the council family.

I am very much aware of the historically challenging politics around the suggestion that the War Memorial Museum, Eden Park and Motat be fully merged into the new entity. However, given the ratepayer and taxpayer investment in these facilities, the politics can't be dominated by single-issue pressure groups alone. Without bringing them into the tent, any meaningful change to Auckland's cultural and stadium operations is unworkable.

In normal times, the proposed merger is a logical one. In these turbulent times, it makes even more sense as it will offer greater efficiency and effectiveness and help the city achieve greater impact. I would commend it to councillors and encourage them to support it and move quickly to unlock the benefits for Auckland and Aucklanders as we seek to collectively respond to the immense challenges generated by Covid-19.

• Sir Don McKinnon ONZ GCVO is a former Deputy Prime Minister, Foreign Minister and Secretary-General of the Commonwealth. He served as chair of RFA's board from its creation in 2010 until 2018.