Aucklanders are being offered thousands of dollars to host neighbourhood barbecues in what has been described as a "diabolical use of ratepayers' money" by the Auckland Ratepayers Association.

Local boards across Auckland are offering a total of $27,000, dished out in $200 grants, for neighbourhoods to throw street parties and events, including barbecues.

SUPPLIED The grants cannot be used to purchase alcohol.

The funds are part of an initiative to bring neighbours together for the national Neighbours Day event on March 25 and 26.

Eight of Auckland's 21 local boards have Neighbours Day funds. Henderson-Massey allocates the most funding, with $6000 on offer to its residents.

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The Albert-Eden Local Board initiated the first ever fund in 2012.

Board member Margi Watson said the idea behind the fund was simple - to make more connected neighbourhoods.

"Our small grants are for street-based events such as a street barbecue, a bouncy castle, or any activities that turn strangers into neighbours," Watson said.

Watson said the Albert-Eden Local Board allocated $5000 of funding towards the 2017 event.

Nicola Strawbridge lives on Halston Rd in Balmoral which used a grant in 2014 to host a street party.

She said the event was a catalyst as the street now got together every Neighbours Day without the help of the grant.

"There is a great team from the neighbourhood who applied for the original grant in 2014. The following years numerous people have stepped up to organise the event," Strawbridge said.

She said the annual events had built a more resilient neighbourhood that was well connected.

"Last year I was involved in the most amazing experience of introducing neighbours who had lived on the street for 25 plus years but had never met before," Strawbridge said.

The grants have come under fire from the Auckland Ratepayers Association, with spokeswoman Jo Holmes saying they are a "diabolical use of ratepayers' money".

"Of all the wastes of money that Auckland City Council is engaged in this is one of the biggest wastes of ratepayers money I have ever heard of," Holmes said.

"I think it is just appalling that other ratepayers who really can't afford it are subsidising this type of activity," she said.

"When the roads have got potholes, the park tracks don't get cut, and a host of other things are not happening, I am sure to any person with common sense would see this as a monumental waste of money," she said.

Despite the criticism Watson defended the grants, saying feedback had shown they were an overwhelming success.

"When streets are more connected and looking out for one another research shows crime rates in that area drop," Watson said.

A person applying for a grant must fill out an application form specifying what the money will be spent on.

The event must include 10 or more households from the local board area and it cannot be used to purchase alcohol.