Asset management and long-term planning.

In 2021, Audit New Zealand reviewed the long-term planning of local government.1 This was part of the process for long-term plans for 2021 to 2031 being adopted by local authorities across the country. To support the opinions we issued on consultation documents and long-term plans, we reviewed local authority infrastructure strategies and asset management planning.

We gathered lots of information. We thought it wouldbe helpful to share some reflections on “what good looks like”.

We hope this report provides a resource for anyone managing assets and interested in accountability.

Local authority assets, planning, and the law

The Local Government Act 2002 (the Act) is the primary legislation covering long-term planning. Its purpose is “to provide for democratic and effective local government”. It does this by clearly stating the purpose of local government, providing a framework and powers, promoting accountability to communities, and providing “for local authorities to play a broad role in promoting the social, economic, environmental, and cultural well-being of their communities, taking a sustainable development approach”.

Section 93 of the Act requires local authorities to have a long-term plan (LTP). Section 94 of the Act requires an LTP to contain a report from the Auditor-General on:

  • whether the plan gives effect to the purpose of longterm planning; and
  • the quality of the information and assumptions underlying the plan.

That is why we audited long-term planning across the country.

Section 14 of the Act sets out key principles for local authorities to follow. These include ensuring “prudent stewardship and the efficient and effective use of its resources in the interests of its district or region, including by planning effectively for the future management of its assets” (section 14(1)(g)).

The Act is not specific about how the future management of assets should be planned but does include specific requirements for an infrastructure strategy (section 101B). The Act tells us that:

…the purpose of the infrastructure strategy is to —

  1. identify significant infrastructure issues for the local authority over the period covered by the strategy; and
  2. identify the principal options for managing those issues and the implications of those options.

Other public sector organisations have their own legislation governing what they do and how they do it. Although most legislation is not as specific as the Local Government Act, for organisations that rely on assets to support service delivery, good quality strategic and operational asset management planning is a prudent part of a robust service and financial planning system.

Standards and guidance

Within the context provided by legislation, professional and industry standards and accompanying guidance provide a strong and clear framework for what good asset management planning should comprise.2 As a result, it is reasonably clear what good planning might look like in theory. The ISO55000 suite of standards provides an overview of asset management, its principles and terminology, and the expected benefits from adopting asset management.3 The Institute of Public Works Engineering Australasia (IPWEA) provides NAMS+ A toolkit for asset management planning.4

This report is intended to complement, not replace or duplicate, these definitions of “what good looks like”.

Audit reports

When we audit local authorities’ long-term planning, we issue two audit reports: one on the consultation document required by section 93 of the Act and one on the LTP.

The consultation document and LTP have different purposes. The consultation document facilitates participation in local decision-making. It should provide an effective basis for public participation (section 93B). The LTP provides the basis for that decision-making and accountability to the community (section 93(6)). It provides guidance to staff tasked with implementing the plan and a point of reference that local people can expect to see delivered.

For local authorities, service delivery relies heavily on physical assets – roads, water supply, wastewater, stormwater, buildings, and open spaces. Other parts of the public sector are similarly asset intensive. From ports and airports, schools, and universities to hospitals and state housing, good public services rely on good management of assets.

Planning for asset-intensive services means having accurate, up-to-date information and good quality asset management planning.

About this report

This report summarises our audit opinions and some of the issues we highlighted in them. It covers asset information, which we believe is the foundation for good asset planning.

The report covers whether the long-term capital programme is doable in the context of rising costs and increasing demand for work. Finally, it considers the role that peer review can play and finishes with what we believe are the top 10 questions for governors and senior managers to ask.

1: Audit New Zealand was the auditors of 62 local authorities. The remaining local authorities were audited by other audit service providers and are outside the scope of this report.

2: More detail is provided in Appendix 2.

3: See

4 See