Iteration, not reformation, the future of local government

An AI generated image of a thesis attached to an old wooden door with the international "no" symbol over the top of it.

A process which began more than three years ago to much fanfare was extinguished in the blink of an eye on the evening of Friday 5 July as Local Government Minister Simeon Brown quietly put the Future for Local Government Review out of its misery via a Beehive press release.

With the National-led Coalition Government rejecting all of the recommendations from the review, yet everyone remaining in agreement that the status quo is unsustainable for local government, the big question is what is the Government going to do to address the systemic and structural issues facing the sector?

Rather than Labour’s ill-fated and ponderous attempt at wholesale reformation, it seems that iteration instead will be the order of the day.

It’s notable that in Simeon Brown’s press release he didn’t refer at all to the structural issues which plague local government, instead focusing on funding and financing issues to support economic and housing growth as well as the infrastructure needed to build them.

City and regional deals obviously feature prominently in the Government’s thinking in this regard, and we wrote recently about city and regional deals and the possible forms they could take. These may well end up being a combination of the Australian approach (agreeing to fund specific programmes of economic development, housing, and infrastructure work) and the United Kingdom’s approach (providing additional revenue tools such as value capture taxes) rather than any of the amalgamation or devolution aspects of the United Kingdom model in particular.

Likewise, the Government’s Local Water Done Well approach is slowly being fleshed out. First cab off the rank was the initial deal with Auckland Council and Watercare, and there is legislation progressively being introduced to Parliament with the Local Government (Water Services Preliminary Arrangements) Bill already at Select Committee and a further bill set to be introduced later this year. No doubt there will be other water deals on the way too, with councils in the greater Wellington region, including Horowhenua, trying to coordinate an approach.

The water deals in particular will try to address some of these financing constraints in the three waters space that have implications for the delivery and maintenance water infrastructure, mainly by enabling water entities to raise funds separately to councils by separating their balance sheets. If this sounds familiar it’s because it’s the same premise that Labour’s Three Waters reform was built on, just executed somewhat differently.

Beyond that, there are immediate changes to housing policy as recently announced in the “Going for Housing Growth” programme from Housing Minister Chris Bishop, as well as a new work programme to (once again) try to replace the Resource Management Act, which will have significant implications for the planning functions of local government.

But what is missing, unless it unexpectedly manifests in some of the city and regional deals, is any meaningful structural or systems reform of local government. Local Government Minister Simeon Brown has kept his distance from any talk of amalgamation of any of the Wellington region’s councils, directing them to the pre-existing Local Government Commission process, which isn’t surprising given what a political minefield the issue has proven to be previously. Wellington’s councils are also already playing for time on Local Water Done Well by requesting the timeframes for many of the current legislation’s requirements be doubled.

At the very least, the iterative approach currently underway does make it look from a distance that the Government is delivering something in this space, even if it is not addressing many of the elephants in the room that were identified by the Future for Local Government Review in their final report.

Bit if you’re expecting big changes, don’t hold your breath. Iteration, not reformation, is the order of the day.