Review of local government presents major opportunity


Councils provide critical infrastructure services across New Zealand, including the planning, funding, delivery and regulation of billions of dollars of assets, but this 30 year old system is simply not geared for today’s challenges

The traditional roles and functions of local government are in the process of changing. A Review into the Future for Local Government was announced today to consider, report and make recommendations on this matter.

The work programmes the Government is advancing to overhaul the three waters sector and the resource management system are foremost among a suite of reform programmes that will reshape our system of local government.

The sector, led by Local Government New Zealand (LGNZ) and Taituarā – Local Government Professionals Aotearoa, is calling for a programme of work to ‘reimagine the role and function of local government’, in order to build a sustainable system that delivers enhanced wellbeing outcomes for our communities.

The overall purpose of the review is to identify how our system of local democracy and governance needs to evolve over the next 30 years, to improve the wellbeing of New Zealand communities and the environment, and actively embody the Treaty partnership.

Infrastructure New Zealand Policy Director, Hamish Glenn, sees this as a genuine opportunity to address a wave of serious issues across housing, transport and water by strengthening the ability of councils to execute, address long standing infrastructure funding and financing challenges and ensure that New Zealand becomes a more competitive, equitable and sustainable society.

“We are very pleased to see the review panel has been given a broad mandate,” Glenn says.

“The panel will consider the future of local government, including roles, functions and partnerships; representation and governance; and funding and financing.

“Councils provide critical infrastructure services across New Zealand, including the planning, funding, delivery and regulation of billions of dollars of assets.

“The current local government system was largely set in place in 1989 and is simply not geared for the kinds of challenges we see today.

“Complex environmental issues like climate change and freshwater degradation have combined with major economic trends around remote working and digitisation to fundamentally change our expectations of local government standards and services.

“In the context of inadequate funding and financing arrangements for infrastructure, councils have not been able to keep up.

“The review announced today gives the country a two year programme to discuss exactly what type of system might work better.

“There needs to be a genuine first principles discussion around what services are best delivered locally, which services regionally and what centrally.

“Effective strategic planning and infrastructure delivery needs a degree of scale that 67 territorial authorities are not optimised to implement.

“But equally, there are a range of public services which do not benefit from scale and which can and should be delivered closer to affected communities.

“It is very important that central government itself keeps an open mind to reform as the review may identify opportunities to transfer responsibilities and resourcing to local government to better incentivise decisions.

“This is a huge opportunity not just to strengthen local government but to improve the entire system of domestic decision making so that New Zealanders continue to enjoy high incomes, a sustainable environment and equal access to opportunities,” Glenn concludes.

Property Council of New Zealand Chief Executive Leonie Freeman says this is welcome news for many in the property industry frustrated by barriers to growth and unleashing opportunity and potential.

“We welcome the opportunity to help shape the way our local communities are governed,” she says.

“It’s not only important for building houses and unlocking critical infrastructure, but it enables thriving cities and communities where people want to live, work and play.

“The status quo isn’t working. The Review Panel needs to be bold in its recommendations and not lose focus of what this is about.

“Significant issues around funding and financing should be addressed. Kiwis should not have to keep getting whacked in the wallet each year with unaffordable rates rises.

“Local authorities should have more levers and tools to fund infrastructure and development spending outside of development contributions and rates. The Productivity Commission’s report into local government funding and financing makes a series of important recommendations which we hope the Review Panel take up.

“Likewise, in many areas around New Zealand there is too much bureaucratic duplication. Amalgamation of authorities where it makes sense has to be on the agenda.

“At a time where the Government is amalgamating health services, resource management plans and polytechs, it is a no-brainer to also look at how our local authorities could work better together and, if need be, amalgamate to achieve better local outcomes.

“The conversation should be about ensuring the best possible representation while delivering the services our communities expect.

“With two years until the final report will be delivered, the Government needs to make sure other major reform pieces – like resource management and climate change – are aligned and avoid unintended consequences.

“Now is the opportunity for the future of local government to focus on the issues which directly impact our communities and work towards better local democracy,” Freeman concludes.

The Minister is seeking recommendations from the Review that look to achieve:

  • a resilient and sustainable local government system that is fit for purpose and has the flexibility and incentives to adapt to the future needs of local communities;
  • public trust/confidence in local authorities and the local regulatory system that leads to strong leadership;
  • effective partnerships between mana whenua, and central and local government in order to better provide for the social, environmental, cultural, and economic wellbeing of communities; and
  • a local government system that actively embodies the Treaty partnership, through the role and representation of iwi/Māori in local government, and seeks to uphold the Treaty of Waitangi (Te Tiriti o Waitangi) and its principles through its functions and processes.

The Review’s initial focus will be on how local government will be a key contributor to the wellbeing and prosperity of New Zealand and an essential connection to communities in the governance of New Zealand in the future.

This will enable scoping of the broader work to follow, including identifying the process and priority questions that will be of most benefit to furthering the outcomes outlined in these terms of reference.

The Review will then focus on answering the priority questions identified during its initial scoping work.

The Review will go ahead in three stages:

  • 30 September 2021: an interim report presented to the Minister signalling the probable direction of the review and key next steps;
  • 30 September 2022: Draft report and recommendations to be issued for public consultation;
  • 30 April 2023: Review presents final report to the Minister and Local Government New Zealand.