Archives - 2003

Governance: the Relationship between Government and the Voluntary Sector
October 2003
In July this year, Peter McKinlay was briefed to act as an expert witness on behalf of a Pacific Island trust. The issue concerned a contract for services between a government-established trust and a company set up by the Pacific Island trust specifically to deliver the services the government trust required. The situation was a fascinating example of just how damaging inappropriate governance arrangements (in this case, the structure of the trust and the terms of the contract it required) can be on the ability of people to work effectively towards a common objective. This case also suggests that at least some government agencies may be unaware of the government’s guidelines for contracting with the voluntary sector.

Taxation and User Charges
October 2003
Peter McKinlay recently completed a major piece of strategic analysis for a government department considering the potential of third party charging (user pays) versus taxation as the appropriate means for paying for its services. The report raises some fascinating issues regarding both the role of government agencies and the status of the services they provide.

Analysis of Public Awareness Campaign
October 2003
MDL has just completed analysing a public awareness campaign carried out by the Department of Conservation (Bay of Plenty Conservancy) in the Eastern Bay of Plenty to inform the public about – and encourage submissions on – a proposed marine reserve at Te Paepae Aotea (Volkner Rocks).  The work involved examining media information around the process, gathering feedback from stakeholders, and assessing the effectiveness of a written survey carried out with a sampling of people making submissions.

For more information, contact mckinlay@mdl.co.nz.

Adrienne von Tunzelmann Appointed
October 2003
MDL congratulates Adrienne von Tunzelmann on two significant appointments.

In November 2003 she took office as president of the Tauranga Regional Chamber of Commerce. Adrienne was first elected to the Board in 2001 and became a vice president in 2002. She has played a very active role in the Chamber, both in convening the business woman’s network, and contributing to the Chamber’s increased profile as a strategic and well informed advocate for the Tauranga business community.

She has also been appointed as director of Pharmac, the Government’s drug buying agency, an appointment which reflects both her long standing interest in corporate governance and her reputation as a specialist in public policy.

At MDL, we are all proud of what she has achieved and wish her well in these two positions.

Local Government Act 2002
October 2003
We continue to be active in presentations on the impact and potential of the Local Government Act 2002 (which we regard as one of the most significant constitutional changes in New Zealand’s recent history).

• Peter McKinlay and Adrienne von Tunzelmann spoke to the Annual Community Services Managers Forum on 24 July 2003 on community services and the new LTCCP process.
• Peter has undertaken presentations for local authorities including the Hastings District Council, and the New Plymouth District Council on the new Act, community outcomes and the LTCCP process.

Waste Minimisation
July 2003
MDL has completed work with an engineering firm to devise a 10-year solid waste minimisation plan for a district council.  The plan is consistent with the issues and approaches set out in the council’s Long Term Council Community Plan and the New Zealand Waste Strategy.  It includes actions to divert waste from landfills, including establishment of community resource recovery centres, management of hazardous waste, and business, school and public education initiatives. Gord Stewart worked with the engineering firm’s solid waste specialist undertaking research, examining best practices in other districts to draw into the plan, and preparing the final copy of the written plan.

For more information, contact mckinlay@mdl.co.nz

Water Demand Management
July 2003
Subsequent to the waste minimisation project, MDL worked with the same engineering firm and district council to develop a range of demand management options for integration into the long-term water supply strategy.  This work addresses some of the requirements around water and wastewater assessment set out in the new Local Government Act (2002).  It considers both system efficiencies and regulatory, financial and educational incentives to promote conservation in residential and commercial water use.

For more information, contact mckinlay@mdl.co.nz.

Local Government Act Unfolds
July 2003
Complying with the requirements of the new Local Government Act is proving to be a major and costly task for many local authorities. 

Amongst the issues emerging are:

• Many councillors are very reluctant to accept that the role of local government has changed.  We have heard of number of cases in which councils have refused to acknowledge that they now have a responsibility for promoting the "four well-beings."
• Allied to this is a very real resource problem.  Where and how do councils get the additional experienced and local government savvy policy analysts and advisors they need to help them adjust to the requirements of the new Act?  The answer seems to be by poaching from their fellow councils who in turn poach from their fellows.

Amongst unresolved questions on which MDL is working are:

• How will local and central government collaborate around community outcomes – and at what level – territorial or regional?
• Who takes responsibility for developing the organisational capability required - which is in short supply at all levels of government?

For more information contact Peter McKinlay.

Community Sector Funding
July 2003
Hutt City Council has adopted a new approach to the Council’s system for funding community houses, based on a review undertaken by Adrienne von Tunzelmann. The review arose from a perceived short-term planning focus associated with the yearly contestable funding round, which tends to centre around organisational efficacy rather than longer term planning for community development outcomes. Adrienne’s review assessed the suitability of the contestable model for this objective and investigated alternative approaches to funding delivery. Her report recommended a shift to three-year, outcome-based funding and a framework for evaluating the impact of the work of community houses. For more information on the review and on her extensive work on community sector funding issues contact Adrienne von Tunzelmann.

Tauranga Chamber of Commerce - Tertiary Education and Economic Development
July 2003
In her capacity as Vice President of the Tauranga Region Chamber of Commerce, Adrienne von Tunzelmann has been appointed Chair of the University of Waikato’s Community Advisory Group at the Tauranga campus. The Group has been restructured into a small core focused on assisting the university with significant educational and research initiatives that will build the university’s presence and activities in the Bay of Plenty and respond to community needs. The Group provides an independent source of advice from a community perspective, and vital links for the university into the Bay of Plenty community.

For the Chamber, tertiary education is a key to the economic development of the region. The Chamber has recently established an economic development committee to focus on issues affecting business development and growth, reflecting the theme of the New Zealand Chambers of Commerce Achieving Faster Economic Growth project - that "it is our businesses that will need to create this growth."  As board member, Adrienne is on the committee which will push for economic growth in the Western Bay of Plenty region through its core programmes and through participation in the development of economic strategy.

Adrienne is also leading initiatives the Tauranga Chamber is taking to promote women’s participation in business, with an economic development focus. Underway is an investigation into the merits of a regionally-based women in business cluster.  For more information contact Adrienne von Tunzelmann.

China wants to know
July 2003
Peter McKinlay has agreed that a number of his recent papers on local government can be included in an edited volume of readings on New Zealand government, to be translated into Chinese and published by the Peking University Press. The project is an initiative of Professor Wan, the Director of the Local Government Centre of the School of Government at Peking University.

Economic Development Agencies
July 2003
Together with our partners in Prism³, we are in the middle of a multi-phase project aimed at advancing the capacities of the EDAs in the Auckland region. The project both builds on and enhances our extensive knowledge of local and regional economic development and the different options for local government involvement.

As another example of our work, we undertook, for a client council, governance and operational audits of the economic development agency it funds. The project was an interesting and beneficial insight into the way in which the governance and operating environments of EDAs have changed in the 10 years or so since this approach to economic development became common.

Our assessment of the outcome from these two audits is that the process of external review has a great deal to offer, regardless of how well existing structures and relationships appear to be working.

For more information contact Peter McKinlay (governance audit) or Adrienne von Tunzelmann (operational audit).

Local Government Asset Management
May 2003
Peter presented a paper "Analysing the Strategic Links Between Asset Management Plans and Long Term Council Community Plans” to the 6th Annual Local Government Asset Management Conference on 6 & 7 May 2003. 

The paper argues that there will be quite major changes arising, for example, from the community outcomes focus in the new Act and the requirement for audit of the long term council community plan. The importance of the paper was reflected in the decision of a major New Zealand consultancy to commission Peter to do a presentation for its senior managers in the week following the conference.

The paper is now available in our library.  For more information contact Peter McKinlay.

SmartGrowth
April 2003
SmartGrowth is a strategy for sustainable growth in the Western Bay of Plenty. It is a joint initiative of Environment BOP, Tauranga District Council, Western Bay of Plenty District Council and Tangata Whenua. Early work in the project included the preparation of a wide range of studies and reports looking at resource supply and growth demand issues – ranging from land capacity and ecological constraints to transport and services infrastructure. MDL undertook one of these studies, examining possible future economic activity in the region and outlining ways to encourage appropriate development.

As the project moved into the public consultation phase, MDL prepared summaries of each of fifteen studies and reports. These summaries give an outline of the research undertaken and key findings. They are designed to make the wealth of information gathered – much of it detailed and technical – accessible to more people. The summaries are available in print form and on CD ROM (along with the full reports). They are provided to participants at all public consultation sessions and are also available from the SmartGrowth office on request. For more information contact mckinlay@mdl.co.nz or visit the SmartGrowth website.

Trusts
April 2003
The CCO provisions of the Local Government Act 2002 have important implications for all local authorities using or thinking of using trusts.  They remain a very worthwhile tool, but more than ever local authorities need to make sure that the governance, funding and operational arrangements for trusts fit their needs and are not likely to result in unpleasant surprises. MDL suggests that every council with trusts undertake an expert review of them to make sure that what they have in place will not run into unnecessary difficulties with the new statutory requirements.

This is an area in which MDL is nationally recognised for its expertise.  Current and recent projects have included: governance options for the Wellington Zoo, governance and funding options for an economic development entity for the Auckland region; advice on the use of trusts for a range of community facilities; assistance with structural design and trustee recruitment for the Tourism Bay of Plenty Trust; and a series of governance reviews.

Each of these assignments has highlighted the importance of getting the design brief right – know what you want to do and why, understand where the "zones of discomfort" are, and make sure that governance management and accountability are each treated separately, but in a complementary way.  It is particularly important to make sure that what you have will work well for you under the CCO regime.  For more information contact Peter McKinlay.

Public Wealth and Trusts
April 2003
In June 2002 we completed for the Institute of Public Policy, and with the support of the Ministry of Economic Development, a paper on "Public Wealth and Trusts". The paper focused on:

[1] Trust structures including key features of their governance arrangements and powers of investment and distribution;

[2] Their historical pattern of investment; and

[3] Examples of initiatives they have taken with a focus on regional economic development or other activity directed towards specific community objectives.

Although the paper is now over a year old, it remains the most recent and comprehensive source of information on what is happening in a very important sector of New Zealand society.

Governance and Accountability
April 2003
Peter McKinlay presented a paper "Setting New Standards of Governance for the Sector” at the Governance and Accountability in the Public Sector Conference in Wellington on 7 & 8 April 2003. 

The paper takes a hard look at a number of the assumptions underlying the structure and management of New Zealand’s public sector. It notes, for example, the irony that the present government largely rejects the market-based approach of the Douglas/Lange Labour Government, but remains strongly attached to the public choice principles on which that government restructured the public sector. It also looks critically at the imbalance between the government’s emphasis on purchasing policy when dealing with the community sector and its failure to consider the steps needed to build governance capability in that sector.

The paper is now available in our library.

Roading
April 2003
There are few more controversial topics in local government than who should meet the cost of roading. Arguments about funding Auckland’s motorways, Tauranga’s second harbour bridge or Wellington’s Transmission Gully development may be the headline grabbers, but there is just as much passion over who deals with local roads. Recently MDL, in conjunction with NZIER, undertook a project for a rural council looking at the question of who should pay for local roads. Among the ratepayer concerns bothering councillors were: how do you explain to a rural ratepayer, paying substantial rates, why their gravel road will not be sealed for some years yet; what do you tell the farmer who thinks that the real problems of rural roading are created by "lifestylers"; and if you are using land value rating, how do you get a fair contribution from forestry (trees are treated as a crop)?

These and other issues were explored both from an economic and a practical perspective. The client council now has a better understanding of the issues and the options available to it.  For more information contact Peter McKinlay or Peter Clough at NZIER.

Local Government Funding
February 2003
Late in 2002, together with the New Zealand Institute of Economic Research, MDL has completed a major report for Local Government New Zealand (LGNZ) on future sources of funding for community needs (which Peter McKinlay drew on for his presentation to the Local Government Finance Forum on 13 & 14 November). This report was the first major review, since the early 1990s, of options for funding local government activities. It is available in our library.

Funding continues to be an issue for New Zealand local government, with real concern on how to pay for needed infrastructure investment. MDL, in association with specialist investment bankers and lawyers, is exploring an innovative approach expected to reduce, substantially, the cost of long term funding for local authorities.   MDL is also working with others, including its partners in Prism³ Limited, exploring alternatives that may reduce the pressure on residential ratepayers in particular.  For more information contact Peter McKinlay.

Local Government Reform
February 2003
The purpose of this conference, which took place in Wellington on 17 & 18 February 2003, was to provide the definitive review of the purpose and intent of the new Act and how its provisions are expected to work in practice. Peter McKinlay presented a paper on "Adapting to New Powers of General Competence: Examining the Implications and Constraints Under the New Legislation", which is available in our library. For more information contact Peter McKinlay.

Economic Development
February 2003
McKinlay Douglas, both in its own right and as a partner in Prism³, is playing a lead role innovating in economic development. Work we are involved with includes:

• Leveraging the opportunities created by the new Local Government Act. 
• Working with Auckland’s EDAs in a comprehensive programme to advance the capabilities of EDAs in the Auckland region.
• Undertaking governance and operational audits of a major EDA.
• Advising a range of local authorities, trusts and other clients on new opportunities for economic development, drawing substantially on leading edge international practice – the role of city-regions, the preconditions for successful technology transfer, innovative means of accessing capital for regional business.

For more information contact Peter McKinlay.

Local Government Act 2002
February 2003
The Act got the royal assent on Christmas Eve. Part of the Act – especially provisions regulating decision-making – came into effect immediately. The rest of the Act comes into effect on 1 July 2003.

The Act is a major constitutional change in the relationship between central government, local government and communities. Its focal point is a fundamentally different purpose for local government and role for local authorities. The new purpose includes promoting "the social, economic, environmental and cultural well-being of communities, in the present and for the future”. The new role of a local authority is to give effect, in relation to its district or region, to the purpose of local government – a statutory obligation on local authorities to play a leading role across the full spectrum of community well-being.

The burden of change on local authorities, and those who deal with them, will be massive. Reflecting that is a great deal of conference and training activity. Peter McKinlay has recently given a paper on adapting to new powers of general competence to a local government reform conference. It is available in our library.  

In conjunction with other central government initiatives (regional economic development, tertiary education, the national innovation strategy), the Act creates a major opportunity for local authorities, community and business to play an important part in growing New Zealand’s economy – see the news item on economic development in this section. For more information contact Peter McKinlay.

Crown Research Institutes: Science Policy
February 2003
In mid 2002 MDL completed a major assignment for the Ministry of Research, Science and Technology as a contribution to the Ministry's work on the briefing to the incoming Minister (otherwise known as the post election briefing). It was commissioned as part of a “10 years on” review of CRIs and considers a range of matters including the effectiveness of CRI structures in building New Zealand's R & D capability. MDL expects the report to play an important role in fine tuning the governance of CRIs.

Subsequent work that we have done for the Ministry highlights the need for New Zealand to lift its game in the management of R & D and in commercialisation of research. We have major gaps that threaten our ability to develop as a knowledge-based society. For more information contact Peter McKinlay.

Regional Economic Development
February 2003
In this important part of our work we have been struck by how far New Zealand has got out of touch with international experience – a result of the “leave it to the market” approach of the 1980s and 1990s. Our library contains a paper prepared for a workshop on economic development for local authorities and tangata whenua in the Western Bay of Plenty. It gives a good overview of current thinking on what works.

Since completing that paper we have done further work for clients, both directly involved in economic development and for the Ministry of Research, Science & Technology, which highlights the gaps that New Zealand’s initiatives in economic development will need to fill if we are to achieve the government’s objective for climbing back up OECD per capita income rankings. It is clear that improving both our understanding of what economic development is about, and the kinds of structures and relationships to make it happen, need to improve substantially. For more information contact Peter McKinlay.

Local Government Remuneration
February 2003
MDL assisted a local authority in preparing a detailed submission on the Higher Salary Commission’s discussion document on local authority remuneration and supported the council in its oral submissions to the HSC. The document represented a “first cut” of a possible approach for discussion with the sector. MDL’s analysis identified a number of matters requiring significant change. Feedback suggests that our work has been influential in encouraging a rethink of the approach taken.

The Higher Salaries Commission announced its revised approach just before Christmas 2002. Our client and we were very pleased to see that our representations had resulted in major and favourable changes. For more information contact Peter McKinlay.

Community Contracting Under Review
January 2003
MDL Principal Adrienne von Tunzelmann, assisted by Emma Stokes, took the lead role in a joint MDL/University of Waikato team that undertook a review of community contracting for Hamilton City Council last year. The review was conducted to evaluate the effectiveness of contracting as a service delivery mechanism and covered issues of accountability, measuring the true costs of outsourcing, contract style and the impact of competitive tendering, Council/community relationships and the variable capability of community organisations.

The outcome was a decision by Council to adopt one of the options put forward in the final report, which was to have the community development and youth workers located in community houses from 1 July 2002. The benefits of this option include: greater potential to build a team of consistently trained professional staff, consistent employment practices, reduced worker turnover, freer flow of policy information, lower management costs and the retention of workers ‘finger on the pulse’. For more information, contact Adrienne von Tunzelmann.

Adrienne’s most recent experience in the community funding area is the completion of a review for Hutt City Council of the Council’s system for funding community houses. The review arose from a perceived short term planning focus associated with the yearly contestable funding round, which tends to centre around organisational efficacy rather than longer term planning for community development outcomes. Adrienne’s report assesses the suitability of the contestable model for this objective and investigates alternative approaches to funding delivery. The report also proposes a framework for measuring the effectiveness of community houses. The framework has an outcomes focus. The report is currently with the Council.