Funding cut tough blow for Kaiko¯ura

The Government has turned off the funding tap for Kaiko¯ ura District Council’s financial sustainability project.

The council’s bid for more than $7 million in the latest Budget round has been declined, and council has been told there would be little point reapplying.

The council has already had more than $1m from the Government to work out how to become a leaner machine after a report last year found it was financially unviable in the long term.

But it estimates it needs $7m to $10m to digitise its records and set up shared services with neighbour councils. Now, instead of the expected millions, it has less than $400,000 to do the job.

The bad news came at Budget time, in an email from Internal Affairs.

‘‘The need to prioritise Covid19 responses, and economic and social recovery throughout New Zealand, means there is no specific funding appropriation in Budget 20 for Kaiko¯ ura District Council. I know this news will come as a disappointment …’’

The Government had provided significant financial support for Kaiko¯ ura since the devastating 2016 earthquake, and while there was no more money for the sustainability project, recovery work support would continue, Internal Affairs said.

The council’s transition manager, Sue Powell, said that left the council in a challenging position.

‘‘The ... stream of advice is that a new operating model is required, but no new funds are available to assist with transition to any new model.’’

Staff have recommended reducing the scope of the sustainability review and focusing tightly on key areas where savings could be made.

Mayor Craig Mackle said it was disappointing funding would not continue, but the decision was understandable given the need to prioritise the national response to Covid-19.

The failed funding bid meant Kaiko¯ura now faced serious challenges, Kaiko¯ ura MP Stuart Smith said. ‘‘They’ve trimmed their rate increase, as many councils have, but that means they can’t deliver as much now and it would be difficult to service more borrowing.’’

Amalgamating with neighbouring councils was not an easy out either, the MP said.

‘‘No matter what path they choose, the KDC will have to be recapitalised. I can’t see why any of their neighbours would agree to amalgamation if it meant taking on debt.’’