Executive summary

Asset management and long-term planning.

Audit New Zealand reviewed local authorities’ approach to long-term planning for key infrastructure covering the period from 2021 to 2031. To support long-term planning, we reviewed local authority infrastructure strategies and asset management plans.

We gathered lots of information and saw many examples of good quality planning. We also identified some areas for improvement, many of which we emphasised in our 2021 audit opinions. We hope this report provides a resource for anyone managing assets and interested in accountability.

We thought it would be helpful to share some reflections on “what good looks like”, alongside some insights on what led us to “modify” our audit opinions. Audit opinions give confidence that readers can rely on the information in key documents. Audit opinions can draw attention to important aspects of documents or indicate areas where there is less confidence.

In the case of long-term planning, opinions covered two issues: whether planning was fit for purpose and the quality of the underlying information and assumptions.

The issues that resulted in audit opinions for 2021-31 consultation documents and/or long-term plans being modified were:

  • whether assumptions about external funding were available;
  • lack of detail about maintaining and renewing assets;
  • concerns about the robustness of estimated costs/time frames for significant capital upgrades;
  • uncertainty about whether resources would be available to progress a major project; and
  • ageing assets, unplanned failures, and a lack of condition information to base planning on.

Infrastructure and asset-related issues emphasised to readers of long-term plans by auditors were:

  • the possible impact of reforms to the delivery of water supply, wastewater, and stormwater services;
  • uncertainty over the ability of a local authority to deliver its full capital programme;
  • asset condition and performance information and their use to inform plans to renew assets; and
  • unclear asset ownership.

Good quality asset information is the fundamental basis for effective asset management planning. Knowledge of key data should cover physical characteristics, installation date, useful life, asset value, current condition, and performance. The reliability of asset data should be formally assessed and a confidence rating assigned. Data confidence should match the complexity and criticality of the asset network and the significance of the asset management decisions to be made. Strategically important decisions on complex networks supporting critical services need to be informed by reliable data.

To be useful, important decisions must be implemented. Planning is only fit for purpose if it can realistically be put into practice. Capital programme doability refers to the likelihood of being able to deliver the planned capital programme. Effective long-term planning means setting an achievable and realistic capital programme that includes a best estimate of the cost and timing of works. Our audits indicate that delivery could be a challenge. In this report, we discuss the importance of having confidence that capital programmes are achievable.

Peer review can play an important role in a robust asset management planning system. It can give managers an independent view. It can challenge whether asset management plans are reasonable or provide confidence. For local authorities, it can challenge or support key decisions in a consultation document or long-term plan.

Our external audit is not a peer review. It does not replace or duplicate the value that a peer review can provide. Our audit is primarily for stakeholders and is designed to support engagement and accountability by giving them confidence.

This report is based on the results of external audits. It poses 10 questions you could ask about your own approach to accountability in planning:

  1. Are we confident that our planning is reliable?
  2. Have we clearly emphasised our key issues?
  3. Have we assessed the reliability of our asset data?
  4. Have we identified our critical assets?
  5. Does our data reliability match the significance of the decisions we need to make?
  6. What is our track record of delivery?
  7. What is the capacity of the local contractor market?
  8. Are we confident we can deliver our plans?
  9. Could we collaborate with our neighbours to gain efficiencies, attract more contractors, or make sure we are not competing with each other?
  10. Do we want independent peer review to challenge our planning and give us confidence that we have got it right?