General policy statement
The Local Government Act 2002 Amendment Bill (No 2) implements a set of reforms to enable improved service delivery and infrastructure provision arrangements at the local government level. The Bill contributes to the delivery of key government priorities to deliver better public services and build a more productive and competitive economy.
New Zealand’s local authorities need to adapt their governance arrangements and structures to lift performance and respond to emerging challenges. Councils need more options to co-ordinate and combine networks and scarce resources across regions and towns, especially for large-scale infrastructure. However, current models and the existing council reorganisation process are not flexible enough.
Current arrangements limit councils’ ability to adequately respond to and provide for regional and sub-regional economic and population dynamics while remaining responsive to local preferences. As a result, some services are provided suboptimally because of lack of scale, integration, and strategic oversight across local government jurisdictions.
The current legislation provides only limited support for shared and integrated services, which is insufficient to enhance scale and capability for water, transport, economic development and other activities. This Bill provides for a broader range of functions to be transferred between local authorities, joint governance arrangements for areas of common or shared interest, and greater use of joint council-controlled organisations (CCOs) for providing services. New models introduced in the Bill include water services CCOs with statutory powers and 2 pre-approved models for transport CCOs, as well as bespoke transport CCOs subject to approval from the Minister of Transport.
The Local Government Act 2002 (the Act) currently allows the Local Government Commission (the Commission) to respond to applications for reorganisation submitted by councils or members of the community, but it cannot initiate investigations. This Bill provides discretionary powers to the Commission to enable it to decide what investigations it will undertake. This will be either on its own initiative or in response to a request from the Minister of Local Government, local authorities, or members of the public.
The increased powers of the Commission in the Bill are accompanied by appropriate checks and balances. The Commission will have to follow statutory guidance for reorganisations. It will be guided by criteria about what it investigates, the processes by which it does so (including public engagement), and what it seeks to achieve. The use of polls will remain if the Commission proposes to abolish, constitute, or amalgamate local authorities. Polls will also be introduced for a major transfer of water, transport, or Resource Management Act 1991 functions from one local authority to another.
Currently, the Act does not allow local authorities to take responsibility for developing, refining, and consulting on reorganisation proposals. The Bill includes a provision for local authority-led reorganisations, with the objective of securing the support of all affected local authorities and communities, and endorsement by the Commission. This will be available for all types of reorganisation, including the establishment of multiply owned CCOs, joint governance arrangements, transfers of powers, boundary changes, and amalgamations.
There is also scope for better, more streamlined regional services and arrangements that will provide better value for money for citizens. The Bill will enable the Commission, as part of a reorganisation, to provide for—
the same local authority to act as a unitary authority (as both territorial authority and regional council) in one district and as regional council only in another district that has its own territorial authority; and
a local authority to exercise specified council functions, powers, duties, and responsibilities within the district or region of another local authority.
The Commission will be able to provide for ongoing committees or other governance mechanisms to ensure appropriate representation and accountability under such arrangements.