Councils in for biggest shake-up in generation

Cash-starved councils could finally get a reprieve, with a review announced into the future of local government, including its revenue sources.

Announcing the long-awaited review yesterday, Local Government Minister Nanaia Mahuta promised it would look into the role of local government, representation and governance issues, as well as funding.

It is set to be the biggest shake-up of how local government works since the amalgamations of 1989, and will reshape how local authorities function over the next 25 to 30 years.

The review was sparked after the current Government began consolidating and amalgamating many of the jobs traditionally done by councils. There are currently plans to amalgamate water services and resource consenting – two of the most important local government functions.

The review will look at finding out what’s next for councils, after some services are taken out of their hands and their power to influence other decisions is diluted.

Mahuta said its mandate would be broad: ‘‘Is legislation that impacts on local government and its legislation fit for purpose? What is it going to take to ensure that we have good strategy leadership in the sector going forward.’’

There have been pleas from councils for access to better sources of revenue, with many struggling to get by with standard rates.

The review panel will report back in April 2023. An interim report is due in September 2021 and a draft report for consultation in September 2022.

Jim Palmer, retired Waimakariri District Council chair, will lead the group, which includes John Ombler, who is best known for his role as controller of the all-of-Government Covid-19 response, and Antoine Coffin, a director and consultant on building relationships with tangata whenua.

They’re joined by Gael Surgenor, general manager of community and social innovation at Auckland Council, and Penny Hulse, a board member at Ka¯ inga Ora and Auckland War Memorial Museum.

Hulse was deputy mayor after the formation of Auckland’s ‘‘super city’’ in 2010.

‘‘I have asked the review panel to consider what local government does, how it does it, and how it pays for it. From there, they will explore what local government’s future looks like, including roles, functions and partnerships, representation and governance, funding and financing,’’ Mahuta said.

She also wants the group to consider how local government can better meet its obligations under Te Tiriti O Waitangi.

The review’s terms of reference included a reference to the Productivity Commission’s report on local government financing. However, it was up to the panel whether it took on the commission’s recommendations or not.

That report didn’t urge a complete overhaul of the rates system, which it said worked well, but it did recommend ideas like using more targeted revenue sources and reviewing council debt limits, which were a barrier for growth.

Palmer said he was aware the panel was ‘‘not going to please everybody all the time’’.

‘‘But ensuring that we’ve been able to demonstrate that we’ve listened, understood the concerns of the communities and all of the interested parties, of which there are many.

‘‘Making sure that those views have been taken into account and genuinely considered.’’

National has been pushing the issue of local government funding. Its local government spokesperson, Chris Luxon, has floated the idea of allowing councils to keep a portion of the GST collected on rates.