Case study 4.5

Asset management for public entities: Learning from local government examples.

Organisation E – Deferred maintenance today stores up a problem for the future

Ongoing deferred maintenance and a high volume of unplanned maintenance is not a desirable position. The added complexity of a declining population that results in a reducing potential for future residents to pay, strongly suggests that this organisation is not taking a strategic long-term view of managing its assets.

As a district council, this organisation’s approach to roading maintenance saw approximately 65% of its work as part of planned programmes, and 35% as reactive or unplanned. This is about the split we would expect between the two types of work. However, there is a significant volume of deferred maintenance in other areas. The wastewater maintenance mix, for example, was skewed to an undesirable 25% planned and 75% unplanned. It is unlikely that reactive maintenance of this sort provides such good value for money or is as effective at keeping the assets in good condition as taking a planned approach. This poses a risk to levels of service and means that the assets are unlikely to be renewed at the optimum time to minimise their whole-of-life cost.