An independent report has given the Far North District Council a "B" rating and highlighted the difficulties it faces in providing services its residents can afford.

The council was one of 18 around the country to volunteer for a CouncilMARK assessment, a new Local Government NZ scheme rating the performance of local authorities.

Of the 10 assessments completed so far the FNDC ranks equal lowest with Horowhenua District Council, both of which received a B. The nine-level scale ranges from AAA to C with the top rating so far, AA, going to Waimakariri District Council.

The idea is to give people an unbiased view of their council's performance, and how it measures up against others.

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The assessors found the FNDC's weakest areas were "governance, leadership and strategy" and "service delivery and asset management", both of which were "variable".

"Financial decision-making and transparency", on the other hand, was judged to be competent, while "communications and engagement with the public and business" was rated better than competent.

The report found the FNDC had good capability in most operational areas and a comprehensive financial strategy, but faced significant challenges. Chief among those was how to provide services of the required level that were affordable, given the Far North's large area, static and ageing population, and high deprivation.

Wastewater was especially challenging because the district had many small sewerage systems, several of which were due for renewal.

Factors contributing to financial pressure on the council included a need to catch up on infrastructure renewals, rates write-offs, increased operating costs (especially salaries), and a policy of not charging development contributions.

The report said the council was aware of and open about those challenges, but it would have to make some hard choices and try to find extra sources of income.

The report writers also called for a better separation of governance and operations, citing councillors' "significant intervention" in operational matters and contractual arrangements.

Mayor John Carter said the report confirmed his view of council performance.

"We've always said there's room for improvement and this assessment confirms that. However, it also shows that we improved our performance in key areas and are on the right track."

The report would be used to guide improvements in governance and management, with the council due to be re-assessed in three years' time.

"It was courageous of the council to put itself forward for this scrutiny, but we wanted to be transparent and upfront about our performance," Mr Carter said.

New chief executive Shaun Clarke started after the assessment took place. So far the FNDC is the only Northland council to take part. Go to www.fndc.govt.nz for the full FNDC report or www.lgnz.co.nz/about-councilmark to see all reports.