Local Government reform, be afraid, be very afraid …

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The Government’s proposals for local government reform are proceeding at considerable speed.  The discussion document was released in March, 2012.  The Bill was then drafted and introduced into Parliament.  Its first reading was June 12, 2012 and released for submissions.  Submissions close on July 26, 2012.  The submission time is very short and the opportunity for feedback is poor.

Select Committee hearings are intended to be held in August and September of this year and the legislation is anticipated to be passed in November of this year.

The discussion document identified 8 potential areas for reform.

Four of these areas (Local Government purpose, fiscal responsibility requirements, Council Governance changes and staffing and reorganization procedures) are addressed in the bill.  I understand it is intended that the remaining areas will be dealt with in due course by a further bill next year.

Auckland Council has passed various resolutions opposing what is proposed and is obviously deeply concerned with the intended changes.  I do not blame them.

The Waitakere Ranges Local Board and local groups and residents have a chance to submit but time is short.

Local Government Purpose

The most radical of the proposed changes is the alteration of the purpose of Local Government.  Currently Council’s purpose includes the “four well-beings”.  A Council is meant to promote the social, economic, environmental and cultural well being of its communities.  This approach was deeply engrained in Waitakere City Council’s ethos and was based on the United Nations Rio Declaration on Environment and Development.

It is proposed that this is changed to require Local Government to “meet the current and future needs of communities for good quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost effective for households and businesses.”

The changes raise a number of issues.  By “local infrastructure” I presume they refer to roads, wastewater, storm water and footpaths.  What about art galleries?  Can they be considered to be infrastructure?

“Local public services” is another phrase that is not defined.  Obviously libraries and community centers and halls are covered.  But what about a community organization like Eco Matters Trust that achieves great environmental benefits through such programs as Trees for Babies.  Is this work a local public service?  Can it continue to be funded?

And the phrase “most cost effective for households and businesses” is also problematic.  Does this mean that we ignore beneficial environmental outcomes in the pursuit of the cheapest option?

The most troubling aspect is that there is no hard evidence that suggests that moving away from the four well beings will save money.

The Regulatory Impact Statement for the Bill says:

“There is limited evidence to inform the development of these proposals, and the timeframe within which the proposals have been developed has restricted the ability to assess multiple options. As a result, the problem analysis and option assessments of specific proposals rely on assumptions that are not, or only partially, tested. The extent of the uncertainties and risks are identified and discussed for each proposal.”  And further, “[t]here is no clear quantitative evidence to suggest that the LGA02 has resulted in a proliferation of new activities, or that local government is undertaking a wider group of functions.”

The two examples of Local Government cost overruns provided in the RIS, Hamilton’s V8 races and Kaipara’s wastewater treatment project do not assist in the analysis.  The first may be no longer within Local Government’s scope if the changes are made although I note the Government has recently entered into an arrangement with Auckland Council to fund V8 super car racing in Pukekohe. The second example involves provision of infrastructure which remains within scope if the new provisions are enacted.

There is also a proposal to change the role of Local Boards.  No longer will their role be the “better enabling the promotion of the social, economic, environmental and cultural well being of communities within the local board area, in the present and for the future”.  Instead their role will be the “better enabling [of] the Auckland Council to give effect to the purpose of local government within the local body area”.  The way I read it some independence will be lost and the boards will become more subservient to the Council’s wishes.

Fiscal Responsibility Requirements

The proposal in this area is that financial prudence regulations may be introduced.  These could set benchmarks for income, expenditure and prudent debt levels.  A breach of these could result in intervention by the Minister.

Of themselves the proposals do not appear contentious.  But they are being proposed around statements that Local Government is bad and out of control.  They could be the forerunner of a Californian type debt crisis, where restrictions on the ability to increase taxes has crippled the fast growing state.

Council Governance changes

The most radical is the proposal to significantly increase the ability of the Minister to interfere in the running of a Local Authority.  The expectation is that if there is a problem that is not dealt with and which may have actual or probable adverse consequences for ratepayers then the Minister can intervene.  This is potentially very wide.

A further proposal is that local politicians will have a greater say on Staffing policies.

Reorganization Procedures

The proposal is to streamline Local Government re-organisation procedures.  It is proposed that a LG review could be triggered in a number of different ways.  Currently either there has to be a poll or a TLA itself has to commence the procedure.

My overall impression of what is being proposed is that Auckland has already been through a significant reorganization and further changes so early into the New Council’s life will only cause further confusion.  And while the goals are laudable I do not believe that what is intended will actually be achieved and they may have detrimental effects on our environment, on our culture and on our communities.

Be very afraid.


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