A ground-breaking shared services contract between Northland's four councils that could bring about $18 million in benefits has been hailed by Minister of Local Government Peseta Sam Lotu-Iiga as the way of the future for local government.

The Northland Transportation Alliance (NTA), launched in Whangarei on Monday between the Whangarei, Kaipara and Far North district councils and Northland Regional Council, is expected to deliver $18 million of benefits over the next 10 years through reduced duplication of staff, the co-ordination of work programmes and bigger buying power when it came to contracts.

Whangarei Mayor and Northland Mayoral Forum chairwoman Sheryl Mai said ultimately the alliance would see "more roads resealed, more roads upgraded and a better cycleway network". But to start with, the new set up from July 1 would be "business as usual".

She stressed the alliance was not part of a slow slide towards a Northland "super council" - an idea strongly rejected by ratepayers last year.


"We set the parameters early on ... Each of the councils will continue to have its own budgets and priorities. We are looking for efficiencies," she said.

Mr Lotu-Iiga said the alliance was a step towards efficient shared services that would save ratepayers' money.

"The Northland Transportation Alliance is the first collaboration of its kind in New Zealand. The NTA has taken several years to get to this point. It has come about because the four councils and NZTA believe there is value in working together," he said.

"The local government reforms announced earlier in the year will allow councils better use of council-controlled organisations to deliver services, potentially achieving great savings and efficiencies for ratepayers. I have now finished a series of meetings, which took me from one end of the country to the other. I have talked with councillors, officials and iwi about shared services and the reforms. We have received valuable feedback which indicates that councils will likely use the new provisions to better collaborate across the regions."

The four Northland councils spend about $86 million a year on roading and transport.