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6.4  Demonstrating cost control in monopoly services

A powerful mechanism to demonstrate cost control is to be transparent about the input costs, the level of service that this purchases, and how this changes over time. This means that charging entities should consider:

  • 'opening the books' as part of their consultation with stakeholders about changes to cost recovery regimes
  • developing an ongoing reporting regime to demonstrate costs associated with cost recovered activities and the performance of these activities, and
  • considering whether there are appropriate benchmarks that could be used (for example, comparisons with other jurisdictions or similar types of goods/services in the public or private sector).

The charging entity's approach to reporting on cost control and performance should be set out as part of the consultation with stakeholders and in advice to decision-makers about changes to cost recovery regimes.

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