Review of CCO Review

Auckland council has been reviewing its Council Controlled Organisations for a long time now, but next week, with a hiss and a roar, Auckland Councillors (Tuesday 7th) and Local Boards (Wednesday 8th) will get the first taste in confidential workshops of what officers have come up with and various options and restructuring. The council's website describes the review like this:

The review is an opportunity to investigate if there is a need to change any council or CCOs’ activities, functions, structures or the ways in which they operate. Its aim is to ensure Aucklanders are getting efficient, integrated services and value for money. The review will also provide confidence that the council group is fully accountable to ratepayers and elected representatives. Many different opportunities for council and its CCOs to work better together will be investigated as part of the review. At this stage it is too early to tell whether this might include any structural changes. Please note that the structure of Auckland Transport is governed by its own legislation and is beyond the scope of this review. Findings from the review will determine whether any major changes to existing council and CCO structures or service delivery models are recommended. Any such changes would be clearly identified and publicly consulted on through the 2015-2025 long-term planning process.

There has been some media comment about the process. For example an NZ Herald March 2014 editorial concludes: "The council-controlled organisations have played a major role in bedding in the Super City and moving Auckland forward over the past three years. Greater council direction of their activities could threaten their effectiveness. In time, some aspects of their operation may need to be refined. But in almost all aspects, now is too soon....".

Apparently several Auckland Councillors have echoed this sentiment in confidential workshop sessions that have been held over the past couple of years. This view is along the lines, "we've been elected to govern Auckland Council and Organisations that were established by Government legislation after a Royal Commission of Enquiry and expert advice - we've not been elected, and nor do we have the expertise, to tamper with it. We should leave it alone....."

I've been talking with Auckland Councillors about the review for a couple of years, and this posting contains my feedback - for what it's worth - to councillors as they go into these workshops next week.

My biggest beef, (as an opinionated councillor) with the CCO's when they were set up in 2010 was that Watercare was not set up as a Three Water entity with responsibility for stormwater alongside water and wastewater services. That sort of integrated approach was the norm for Waiatakere City Council and North Shore City Council, and was aimed at delivering a more water sensitive urban environment. Many shared my view about this, but it was not to be in 2010, and it seems, despite suggestions from some councillors, it's not to be in 2014 either.

This NZ Herald report, almost 2 years ago, about the CCO Review, had this to say: "A source said the council was actively exploring merging four CCOs into two and scrapping Auckland Council Investments altogether. Waterfront Auckland could be rolled into Auckland Council Property. The same goes for Auckland Tourism, Events and Economic Development (Ateed) and Regional Facilities Auckland...."

From what I understand it appears that the upshot of two years work is that Auckland Council Property Ltd should be merged with Auckland Waterfront Development Agency to form an entity that could be known as Auckland's Urban Development and Regeneration CCO.

This sounds like a great idea. It's got potential. Many have been arguing that Auckland Council's Unitary Plan and Special Housing Area policies lack an implementation arm. I wrote about this last year in this posting:

"...the method is an Urban Development Structure Plan for each Urban Development Area. The mechanism is an Urban Development Agency established to make, and manage the implementation of, each Urban Development Structure Plan. The rationale, or exemplars, for this approach are the Public-Private-Partnership urban regeneration projects that have been successfully implemented in Australian cities...."

 This refers in particular to Urban Redevelopment Agencies used for urban regeneration in Perth in particular, because a whole group of Councillors - including Penny Hulse and Linda Cooper - went to Perth on a week long study tour to see how they did it there when we visited three different parts of the city that had undergone, or were undergoing, some form of urban regeneration. This visit is described quite visually in this posting and concludes:

"...what Perth learned from this sequence of three brownfield regeneration projects. None of these projects are the same of course, but the things they had in common were these: public money kick-start; tailor made regeneration agency for each community/project; 3-5 year master planning timeframe (remember - much of this is time invested in getting community buy-in and amalgamating land where needed - let alone getting infrastructure plans in place and funded); strict requirements around the provision of affordable housing (which is quite distinct from social housing)...."

 One of Auckland's first urban regeneration projects is New Lynn town centre. It has been successful in some ways, and there are some aspects that have been criticised. Every bit of urban regeneration is a learning experience. Urban regeneration is a relatively recent activity in Auckland, partly because we are a relatively young city, and also because the pressures for urban change have been slow. European and US cities have been engaged in urban regeneration projects for over fifty years now, and a lot of experience has been gained about the process that we can usefully learn from here in Auckland. One of the key learnings is that urban regeneration institutions require a different sort of local government culture than is usually found in a Council. A few extracts from UK manuals:

The new skills that managers of regeneration need. “…not only are they taking on roles as community champions or leading change processes, but the increased need to work in partnership with communities or partners beyond their own organisational boundaries, and stimulate cultural changes, have implications on how they perceive their roles…”

The significance of leadership in engaging stakeholders, and the: “….messy and ambiguous settings lead managers to attempt to make sense and develop some order and clarity…”.

Best practice in the modern public sector environment now demands:
1) Citizen involvement
2) Greater democratization
3) The need to build capacities and improve quality and performance
4) A requirement for skills mixes located in different people at different times
5) An understanding that no one organisation or person possesses all the skills and competencies to undertake activities
6) Effective performance by regeneration managers, who synthesise past experiences, skills, knowledge, behaviours and competencies within organisational, but increasingly in cross-boundary, settings.

The most significant take-away for Auckland is that regeneration demands a different way of thinking and behaving from public officials, and that they also need to respond and change in a dynamic and changing environment. Emphasis is placed on the need for organisational and managerial behaviours that “learn”, and that “public learning” requires a systematic approach to:
1) Develop a shared understanding of current realities and vision for the future;
2) Develop questions on gaps between current and desired state, in order to agree publicly with stakeholders on the way ahead;
3) Develop a climate or culture in the parts of their own organisations to gain commitment and combat coercion;
4) Challenge rhetoric of competition with collaboration and partnership;
5) Place a high value on learning in human resource processes and performance and appraisal;
6) Develop and value a learning ethos, discourage action fixated behaviours;
7) Reinforce learning, discourage competition and short-term target setting, and incorporate into pay and reward systems.

So what does all this mean for the CCO review, and the recommendation that the Auckland Council Property (ACPL) and Waterfront Development (AWDA) CCOs be merged. Cutting to the chase here. There is a clear need for some form of Urban Regeneration Implementation agency in Auckland. It is also clear that the Waterfront Development Agency, which has grown and been developed over the past 7 or 8 years from its Auckland Regional Council Sea + City days, has done a great job so far at Wynyard Quarter. It is well known that AWDA employs specialist and talented people. It is probably less well known that AWDA as an institution exhibits many of the characteristics of urban regeneration excellence mentioned above.Which is partly why AWDA rates so highly in Auckland Council's Staff Engagement Survey which measures job satisfaction, feeling valued at work, able to apply skills and such like. This sort of working environment is highly attractive to skilled staff.

I think the rest of Auckland could benefit from the knowledge and experience that has developed within AWDA, but only if the culture and institutional style that allowed and encouraged AWDA to develop as it has, continues in any merged structure...

This is my suggestion. There will be all sorts of options. The thinking behind this, apart from best practice advice about the need for appropriate institutional culture and approach, include:

• the need to separate Auckland Council planning and budgetting responsibilities from CCO implementation responsibilities and activities. Thus it may be appropriate for implementation oriented activities presently located in Auckland Council's city centre planning department to be seconded or included within AUDRC (Auckland Development and Regeneration CCO).
• the need to establish fit-for-purpose-entities to manage particularities of urban brownfield projects. These should have a presence on location. Manukau towncentre for example - part of the Southern Initiative. New Lynn was an example. Like Perth examples. One size does not fit all. Entities need to be tailor made, supported by CCO specialist staff.
• city centre waterfront regeneration requires different skillset. Particular attention to and knowledge of: reclaimed land; stakeholder relationships with marine industry and port facilities; ferry and fishing traffic; management of city centre public places; leasehold land tenure; large scale developments like ASB and Hotel.
• there are opportunities for cooperation between CCIG and AWDA, so that AWDA implementation skills are deployed elsewhere along Auckland's waterfront.

Councillors and Local Board Members, best of luck for next week and future decision-making about CCO's. My key advice: "don't throw the baby out with the bathwater."

(Expression of Interest: Joel was an ARC Councillor when its entity Auckland Regional Holdings established Sea + City Ltd as the development agency for Wynyard Quarter, and while SEA + City proceeded with associated planning between 2005 and 2010.  Joel was engaged until recently by Auckland Waterfront Development Agency to provide planning services as part of its challenge team.)