Beyond the Binary: Rethinking Council Amalgamation
Local Government Under Pressure
Local government is great when it works, and right now, we would be hard pressed to say it is working at its best. Rising rates, inconsistent planning rules and service delivery, and the lack of investment in critical assets are familiar frustrations for households and businesses.
Yet every three years we move the deck chairs around the council table and hope for better outcomes, all while keeping the same operating model, funding base and regulatory silos. In the private sector, persistent underperformance usually triggers deeper questions and action on changing structure, design, and operating models to drive efficiencies and an ability to respond to a constantly changing environment. So, we think it’s reasonable to ask whether local government should be any different.
Growth Is Outpacing Governance Boundaries
These questions land particularly strongly in Canterbury, and we are seen as a sitting duck for local government amalgamation.
We are heading toward a future where Christchurch and Selwyn for example, could soon function as two cities less than 20 minutes apart, growing rapidly, competing for infrastructure investment and governed entirely separately. Growth does not respect council boundaries, yet planning, consenting, transport and infrastructure investment still largely do. That disconnect is becoming harder to defend, to the point where doing nothing is no longer an option if we want improved outcomes, better return on investment and greater efficiency.
“Growth does not respect council boundaries.”
Would Amalgamation Actually Deliver Better Outcomes?
Amalgamation is often presented as the answer. It promises economies of scale, streamlined governance and stronger balance sheets. But the big questions are - does amalgamation tangibly reduce duplication, reduce costs and improve outcomes? Or do we risk creating a behemoth bureaucracy that doesn’t deliver any better?
That’s why I think the Government’s recent announcement is a useful catalyst for driving an important wider ranging discussion and meaningful change, though I don’t think it is necessarily the best approach to simplify the debate to a binary “amalgamate or don’t” discussion.
There May Be More Than One Path to Reform
What we do know is more formalised service sharing across consenting, procurement, infrastructure delivery or regulatory services have already been tested in New Zealand and shown to work. In some cases, this may deliver many of the benefits of scale without local communities feeling like they are going to lose out on decision-making. Councils could also better align policies or jointly invest more – which may also deliver more benefit with less disruption.
The Bigger Issue: How Councils Are Funded
There is also an elephant in the room. Revenue.
As the saying goes, cash is king, and councils don’t have much of it. There has been a pattern of on-going rate increases over many years because Councils tell us they must hike them to afford the increasing costs of delivery. Local government in New Zealand relies overwhelmingly on one blunt funding tool to meet growing expectations and that is rates.
If we are serious about reform, funding must be part of the conversation. Are rates really the only option? Should councils share in tourism spend to fund tourism infrastructure? Should a portion of GST generated locally be returned to local government, as happens in other countries? And let's not forget the on-going debate around local government and asset ownership – this conversation and coming up with a different outcome is well overdue.
Without addressing how councils are funded, we risk a different form of rearranging deck chairs rather than creating real change.
So, Councils together with their communities, should be able to test different options, rigorously and with open minds.
“Without addressing how councils are funded, we risk a different form of rearranging deck chairs rather than creating real change.”
The Debate Has Changed
The game has changed in recent days, with the Government now making a clear move toward amalgamation. Our Councils no longer have a choice on amalgamation. The option they now have is whether they choose to participate in shaping what that amalgamation might look like and be part of the change. That doesn't mean we can’t still have the conversations about funding, or the best way to deliver council services across the region.
Councils Should Help Shape What Comes Next
So that being the case, I would rather see our regions’ leaders in the driver’s seat proposing what amalgamation looks like, than witness three months of political football playing out and then have the Government tell us what our local government will look like. Ultimately whether councils like amalgamation or not, it is no longer the discussion they should be having. Councils do have a choice and that’s to lead the change to actively shape the future or react to decisions made by others.
Of course, I am in the enviable position of not having to make any of these tough calls. But if I had to make one today it would be this – put a serious amalgamation proposal on the table and test it honestly against the outcomes we actually need. In my view it is always better to influence change early by taking an active role in shaping the reform, as the alternative is to accept the outcomes determined by others.
That is where the conversation should begin.
