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Local Government Bill: Can They Both be Right?

Written by Peter McKinlay on August 15th, 2016.      0 comments

Media reports and submissions to the Local Government and Environment Select Committee both suggest serious conflict between government and local government about the purpose and the effect of the Local Government Amendment Bill.

The Minister, according to a report on the Otago DailyTimes on 13 August, believes the Bill will enable "more innovation and collaboration across local government to deliver better value for ratepayers". Furthermore "the reforms to the Local Government Act will protect local democracy."

In contrast virtually all councils believe the Bill is a serious threat to local democracy. The submission from the Canterbury Mayoral Forum, signed by the redoubtable Dame Margaret Bazley states " Canterbury councils have serious concerns and are unable to support provisions in the Bill which would undermine local democracy and local governments' 'contracts' with their communities."

What's going on when there can be two such fundamentally different assessments of an important piece of legislation from people each of whom should know what they're talking about?   

Local government's concern centres on new powers being given the Local Government Commission to undertake reorganisation initiatives of its own volition  and especially to put in place Council controlled organisations covering a number of different councils and a wide range of services. Associated with this, powers given the Minister to direct the Local Government Commission has raised concern the Local Government Commission could become the government's tool for placing much of local government service activity in Council controlled organisations as separate entities outside the effective control of councils themselves (the detail in the Bill as complex but this is the basic effect if government decided to use the Bill, once enacted, for that purpose).

At the heart of this is a fundamental difference of view about the role and purpose of local government. It's clear central government sees local government as primarily in the business of delivering effective and efficient local infrastructure, local public services and regulatory functions. It's convinced that most New Zealand councils are too small to be efficient, and that councils or at least their major services need substantial amalgamation if they are to deliver cost-effective services best able to support the government's economic development objectives. It's also seriously frustrated by the failure of the changes it made in 2012 with the purpose of encouraging local government amalgamation. Despite much effort by the Local Government Commission and supporters of amalgamation, nothing happened.

Both the government's view of the purpose of local government and its frustration at the lack of 'progress' enjoys strong support from the business community as evidenced for example by the submission from Business New Zealand.

But there is a different view of the proper role of local government resulting partly from change taking place internationally, and partly from the terms of our own Local Government Act which actually sets out two purposes for local government - in addition to the emphasis on cost-effective services, the Act also states the purpose of local government as "to enable democratic local decision-making and action by, and on behalf of, communities."

This is a purpose which privileges local choice over central direction and recognises that 'efficiency' (at least in the narrow least cost resource sense) is only one characteristic and not necessarily the most important characteristic of local government activity on behalf of its communities.

There is a growing emphasis internationally, and starting to emerge in New Zealand, on the importance of local government in building inclusive communities. In Britain post-Brexit the reality that so many people who voted leave did so because they felt excluded from the communities in which they lived and with no opportunity to improve their lot or to have their voice heard has been a loud wake-up call. There is a recognition that the 'efficient' delivery of services, a feature of the past few years, has come at a high cost in terms of social cohesion and potentially of democracy itself.

In New Zealand, perhaps because of the policy of successive governments over the past two or three decades, local government is still very much in a compliance mode and by and large accepting of its role in efficient service delivery. Currently its main difference from central government is its acute awareness that what it can do is constrained by the preferences of the communities it serves and they are often very opposed to loss of representation, the application of commercial principles to services, especially to people, and attempts to impose solutions ina top-down manner (the lesson the government could have learned from the failures of recent regional amalgamation initiatives).

Expect this to change quite rapidly as local government in New Zealand becomes increasingly aware of the importance of working with its communities, and understands that this is not just good 'local democracy' but also increasingly a prerequisite for dealing with a number of the 'wicked issues' which have plagued many New Zealand communities for decades. It's also a necessary (albeit not sufficient) precondition for avoiding the same kind of political breakdown which gave rise to Brexit, Trump and many of the extremist movements emerging in Europe and elsewhere.

Surely it's time for central government and local government to do what certainly hasn't happened in the development of the current local government amendment Bill, and get into a constructive dialogue about how best to combine efficiency in service delivery with respecting the values and preferences of the communities which local government (and central government) serve. The task will not be easy, and will require both parties to put aside quite long held prejudices but the rewards in terms of better ability to deliver on the objectives of both tiers of government should be considerable.



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