A wave of relief has swept across Auckland’s 21 local boards after being offered temporary reprieve as they struggle with cost pressures.
The local boards united in a letter to Auckland Mayor Wayne Brown strongly objecting to the expectation that they absorb a $17.6 million budget shortfall.
Auckland Council’s proposed cost-cutting measures are tied to the Fairer Funding initiative – a scheme intended to ensure more equitable funding across Auckland’s local boards.
The Ōtara-Papatoetoe local board was the hardest hit, facing a deficit of $1.3 million.
Chairman Apulu Reece Autagavaia said he was “super happy” with the news that local boards wouldn’t need to seek additional funding for the cost pressures this year.
After receiving the letter, dated March 10, from the combined chairpersons voicing their concerns, the mayor responded.
“The mayor replied, saying he had directed staff to respond to the letter just days after we sent it,” Apulu said.
“Then, just yesterday, staff responded, stating that local boards would not need to look for funding for the cost pressures.”
The news provided temporary relief, but the chairpersons remain concerned about next year’s financial outlook.
“We don’t have to find cuts, but we’ll have to have the same discussion next year because it’s built into the Long-Term Plan in terms of the funding.
“We’re super happy about this financial year but, again, it’s likely we’ll have to have this discussion all over again for next year.”
Fairer solution sought
While most, if not all, chairpersons wanted to ensure they were equitably funded, it also meant some local boards have lost out in terms of funding or being able to cover rising costs, Apulu said.
The announcement provided more time to consider a fairer solution ahead of next year’s budget, he said.
“One of the issues is that the full financial picture of each local board is hard to get because there are 21 boards, and there’s only so much staff can do. It’s really difficult for us to make decisions on where to make savings or efficiencies without the full picture.”
A portfolio review was expected to provide clearer insights, but Apulu said this wouldn’t be ready until next year.
This would assess the different assets in each board and provide advice, but for Ōtara-Papatoetoe, staff wouldn’t be able to do that until next year, he said.
“It’s really hard for us to make the savings the mayor wants us to make when we don’t have the right information to make those decisions.”
‘We’re all facing cost pressures’
Brown recently told LDR that the transition to the Fairer Funding Model had to be better managed, and it would be.
“We want to empower our local boards and communities by delegating greater decision-making powers and budgets.
“But let me be clear: Accountability goes hand-in-hand with autonomy. Everyone is in a tough situation right now. We’re all facing cost pressures, including Auckland households. I expect local boards to be increasingly disciplined and financially responsible.”
Ross Tucker, group chief financial officer for Auckland Council, said the council “is embarking on a challenging transition to an equity-based funding model that will see local boards being empowered with more budget autonomy as well as greater budget responsibility”.
“Following discussions with the Mayor, council staff contacted Local Board chairs on March 17 to advise that the coming financial year, 2025/2026, will now be treated as a transition year. This will address cost pressures without any reduction or redistribution of the proposed fairer funding top-ups for 2025/2026.”
Tucker said service level changes would not be required from local boards for the coming year. Instead, budget mitigations would be managed through other means in the annual plan process. Staff would collaborate with local boards to reduce cost pressures, increase revenue, and develop long-term solutions starting in 2026/2027.
LDR is local body journalism co-funded by RNZ and NZ On Air.
