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Harbour Esplanade neglected despite $74 million unspent

31 Aug 2016

Some $74 million of City of Melbourne money that could have been used to revitalise Docklands’ most neglected public asset, Harbour Esplanade, has gone unspent over the past four years.

Since 2012, the council has consistently underspent on its capital works budget, to the tune of $74 million.

In the past two financial years alone the council has reported a variance totalling more than $52 million between what it budgeted on capital works and what it actually spent.

Meanwhile, the Harbour Esplanade redevelopment project has remained unfunded by council, with its focus turned on other major projects, such as the Queen Victoria Market renewal, where it is set to spend at least $250 million.

The chair of the City of Melbourne’s finance committee Cr Stephen Mayne said the capital underspending raised questions about the accuracy of the council’s budget forecasting and ability to deliver multiple capital projects in a timely manner.

“It also highlights that council is spending a disproportionately large slice of its revenues on recurrent costs such as our well-paid staff and is not delivering the necessary or promised spending on capital works. These priorities need to be reoriented,” Cr Mayne said.

“Capital spending is forecast to rise in coming years, primarily due to the Queen Victoria Market renewal, but other important projects such as Harbour Esplanade should also be delivered over the next council term,” Cr Mayne said.

“With rate capping now a reality, council will need to put the brakes on recurrent spending if it wishes to ever actually deliver an annual capital program exceeding $150 million whilst remaining debt free.”

A City of Melbourne spokesperson said there could be a number of reasons why projects could occasionally under spend on their budgets, including:

Funds allocated in advance for multi-year construction projects in order to smooth out financial peaks and are carried forward across the life of the project;

Unforseen conditions causing delays; and

Community consultations requiring more time to ensure community concerns are addressed, ensuring best value.

“Any unspent budgets are carried forward into the following financial year, as these projects are underway and continuing,” the spokesperson said.

“Such budgets are allocated to projects approved by council and spent the following year.”

The spokesperson did not address a question asking why unspent capital works budget wasn’t allocated to the Harbour Esplanade project.

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