8.1 Overview and purpose of council-controlled organisations (CCOs)
Councils in New Zealand can provide services in several ways:
- through in-house staff and operations
- by contracting external organisations
- through entities governed by an independent board of directors appointed by councils.
CCOs are a category of external organisations that play a key role in helping Auckland Council deliver services on its behalf and achieve its strategic goals. These organisations contribute significantly to the wellbeing of Aucklanders through the services they provide.
Types of council-related organisations
Councils have the right to appoint directors to council-related organisations, but the proportion varies [1]. Categories of organisation are:
- Council organisations (COs): The council has the right to appoint a minority of the board members [2]
- CCOs: The council can appoint 50 per cent or more of the board members
- Substantive CCOs: CCOs that are fully council-owned and deliver significant services or manage assets over $10 million [3]. A substantive CCO is only a concept in Auckland local government. Auckland Council has four substantive CCOs: Auckland Future Fund, Auckland Transport,Tātaki Auckland Unlimited and Watercare Services Limited
- Council-controlled Trading Organisations (CCTOs): CCOs that operate to make a profit. Auckland Council currently has one CCTO – Waste Disposal Services, a joint venture
- Port Companies: Port companies are governed by the Port Companies Act 1988 and are excluded from the definition of a CCO. Port of Auckland Limited is 100 per cent owned by Auckland Council
- Crown Entities: These are entities governed by the Crown Entities Act 2004 but where Auckland Council has a shareholding and powers to make appointments to their boards. Auckland Council is a minority shareholder of two crown entities: Tāmaki Regeneration Company and City Rail Link Limited
- Other entities established by legislation: Auckland Council has powers to make appointments to several other boards by virtue of specific legislation related to those entities. The three entities in this category are: Auckland War Memorial Museum, Museum of Transport and Technology and Auckland Regional Amenities Funding Board.
Purpose of CCOs
A CCO helps the council deliver public services and achieve its objectives by transferring operational responsibility to a professional board. This arm’s-length model is common internationally.
Why the council uses CCOs (h2)
The CCO model works well when the activities of the CCO:
- have a clear purpose and receive clear strategic direction from council
- require specialist expertise or commercial disciplines
- need technical or industry knowledge and skilled staff
- benefit from fast decision-making and innovation
- are made more efficient through aligned systems
- achieve economies of scale
- are not duplicated by other council functions or CCOs.
CCO Reform 2024
In December 2024, the council approved reforms to the CCO model:
- Eke Panuku Development Auckland was disestablished and its functions transferred to the council from 1 July 2025.
- Economic development functions transferred from Tātaki Auckland Unlimited to council from 1 July 2025
- Other changes to improve the functioning of the CCO model.
The council also noted that central government is proceeding with legislative change to amend the role of Auckland Transport with transport strategy, policy and planning functions to be transferred to the council in future.
Group Shared Services (GSS)
To improve the cost-effectiveness of the CCO model, Group Shared Services has been established to eliminate duplication of common back-office support functions between the council and CCOs. The functions to be provided by GSS are:
- corporate support services
- customer experience and digital services
- data services
- people services
- procurement services
- technology services.
Substantive CCOs and their services
Auckland Transport (AT)
- Established as a statutory entity [4], which restricts the level of change the council can make to its structure without a change to the legislation.
- Purpose: "To contribute to an efficient, effective and safe Auckland land transport system in the public interest" [5].
- Operates under the Local Government (Auckland Council) Act 2009 [6] and is also subject to the Land Transport Management Act.
- Visit Auckland Transport for more information.
Watercare Services Ltd
- Provides integrated water and wastewater services.
- Governed by the Local Government (Auckland Council) Act 2009 [7].
- Must keep water and wastewater service costs low while maintaining infrastructure long-term [8].
- Cannot pay dividends or distribute surplus to the council [9].
- Visit Watercare for more information.
Tātaki Auckland Unlimited
- Formed in 2020 by merging Auckland Tourism and Economic Development Limited and Regional Facilities Auckland Limited after an independent review of CCOs.
- Purpose: Enrich the cultural and economic life of Tāmaki Makaurau.
- New Zealand’s largest producer of cultural, entertainment, sporting and wildlife experiences.
- Visit Tātaki Auckland Unlimited for more information.
Auckland Future Fund
Formed in 2024 to manage Auckland Council’s investment fund and provide enhanced financial resilience.
Strategic assets managed by Auckland Council’s substantive CCOs
| Council-controlled organisation | Strategic assets owned and managed by the CCO | Strategic assets owned by the council and managed by the CCO |
| Tātaki Auckland Unlimited as the corporate trustee of the Regional Facilities Auckland Trust |
|
None |
| Auckland Transport | The public transport network |
Roading and footpath assets |
| Watercare Services Limited |
|
None |
| Auckland Future Fund Trustee Limited as corporate trustee of the Auckland Future Fund Trust | The Auckland Future Fund (as a whole) | None |
Smaller CCOs
The council has five CCOs that are smaller in scale and budgets than the substantive CCOs. These entities provide services to a range of stakeholders and contribute to delivering council programmes and services. These CCOs must submit half-year and annual reports and statements of intent (SOI) under their governance requirements unless they have been exempted by the council. These CCOs are:
- Contemporary Art Foundation – Operates Te Tuhi Centre for the Arts, a public gallery in Pakuranga which hosts art exhibitions.
- Te Taumata Toi-a-Iwi / Arts Regional Trust – Supports entrepreneurship in the arts, culture and creative sectors to create beneficial outcomes. This CCO is exempt from SOI requirements.
- Māngere Mountain Education Trust (MMET) – Runs Māngere Mountain Education Centre, which helps Aucklanders learn about the maunga and its people. This CCO is exempt from SOI requirements.
- Mt Albert Grammar School Community Pool Trust – Supports the Mt Albert Aquatic Centre. This CCO is exempt from SOI requirements.
- Te Motu a Hiaroa (Puketutu Island) Governance Trust – Works with the council and iwi to oversee the development and transformation of Puketutu Island into a regional park. This CCO is exempt from SOI requirements.
Footnotes
[1] This includes companies or any entities that are a partnership, trust, arrangement for the sharing of profits, union of interest, cooperation, joint venture, or other similar arrangement, set up with the intention of making a profit or with some other non-profit objective in mind.
[2] Local Government Act 2001, section 6(1).
[3] Local Government (Auckland Council) Act 2009, section 4(1).
[4] Local Government (Auckland Council) Act 2009, section 38
[5] Local Government (Auckland Council) Act 2009, section 39
[6] Sections 38 to 56
[7] Local Government (Auckland Council) Act 2009, section 4(1)
[8] Local Government (Auckland Council) Act 2009, Part 5
[9] Local Government (Auckland Council) Act 2009, section 57(1)(a)