A new look for local government

Are wholesale mergers really the answer?

In 1875 New Zealand had 10 provinces, each with their own government.

We now have 26 provincial rugby unions.

Currently there are 78 local authorities – 12 city councils, 53 district councils, Auckland Council, Chatham Islands council and 11 regional councils.

It used to be worse, much worse.

Up till 1989 we had about 850 local authorities and special purpose bodies. Remember borough councils, county councils and catchment boards? Our biggest cities were ridiculously separated. I bought my first house in the Christchurch suburb of Burwood but paid rates to, and had my rubbish collected, by the Waimairi County Council.

The Coalition Government are keen to condense our local authorities yet again. There’s no specific total in mind but it seems the relevant cabinet ministers Simon Watts and Chris Bishop want to land on a number somewhere between the old provincial governments and today’s local rugby unions. In other words they want local government reduced to about twenty unitary authorities.

But is reducing the number of local authorities really the answer to cutting the exorbitant cost of local government? The current rates rises all across the country are just not sustainable.

But the biggest single cost on local government is staff wages and salaries. Currently 59,700 staff across those 78 local authorities are paid $3.85 billion a year. That’s 21 percent of all council operating expenditure and cost every New Zealander about $74 a week.

As in the central government bureaucracy, the number employed in local government has ballooned in recent years. In 2021 there were 52,200 workers. So there’s been a 14 percent increase in just four years.

A reduction from 78 councils to say 20 will not reduce staff numbers by three quarters, but there will most certainly be no need to have nearly 60,000 people on the books.

The engineers, the planners, the inspectors, the scientists and many department managers will stay. But reducing the number of CEOs by three quarters would likely save nearly $20 million alone.

Then there’s the HR, Communications and, dare they be mentioned, the Climate Change departments. A scalpel to the head count there is well overdue.

So on the surface taking the clippers to local government authorities and amalgamating them sounds like a straightforward way to save money. But we know it’s not that simple.

The Auckland Council, a 2010 merger of Auckland City, Manukau, Waitakere, North Shore, Papakura, Franklin, Rodney and the Auckland Regional Council is not a poster child for efficiency or cost saving. It alone employs about 14,000 people.

Where I live in Central Otago we’re most likely to be folded into some province-wide conglomerate, with the Head Office in Dunedin administering a population of about 250,000.

Except that the Otago hinterland could not be more different, economically, politically and culturally, than its big city cousin. Dunedin is hard core Labour. The country is National.

The redeeming factor is that if the elected representatives are proportionately spread across the province’s population then there will be more non-Dunedin councilors than those based in the city.

This scenario is likely to be repeated and questioned the length and breadth of the country. Will existing local authorities really be able to merge into enlarged, meaningful and efficient new councils?

For instance, can Wairarapa, with four current authorities from Tararua to South Wairarapa be merged into one and be economically viable? Or will it have to join greater Wellington with whom it has little in common?

Nelson and Marlborough merged their rugby teams to form the successful Tasman Makos. Can the area’s district unitary authorities follow suit?

In many respects the big problem with local government is not the number or size of councils per se but what they’re expected to do and what they can take upon themselves to do.

That stems back to the Local Government Act of 2002 which gave councils carte blanche to essentially do whatever they want.

Section 3 (d) of the Act provides for local authorities “to play a broad role in promoting the social, economic, environmental, and cultural well-being of their communities, taking a sustainable development approach.”

Therein lies the real issue.

If Simon Watts and Chris Bishop want to reel in the local government runaway train then they have to significantly change the legislation to make it far more prescriptive.

That means laying out what councils can and must do - and no more.

Maybe they can work on that if they’re re-elected but I doubt Watts especially, as the Local Government Minister, has the stomach or the courage for such a transformation.

In the meantime councils themselves have to work out with their neighbours who they’ll join forces with for the 2028 local body elections. Otherwise Watts, Bishop and their bureaucracy will do it for them.

That is not a good idea.

The locals better get on with it, but expect pushback and arguments no matter what’s finally decided.