Massive jump in delegated authority for Hastings District Council chief executive

Hastings District Council's chief executive Nigel Bickle (left) has had his delegated authority increased by several million dollars. Photo / File

The delegated financial authority for Hastings District Council's new chief executive has increased from $500,000 to $5 million - a figure which a local governance academic says undermines democracy.

However, HDC says the change will result in greater efficiency and is subject to "stringent checks and balances for this delegated authority".

The decision, which was adopted by councillors at a public meeting on May 2, increased the level of delegation to the chief executive Nigel Bickle "for contracts covering the purchase of goods and services already budgeted".

As a comparison, Napier City Council's chief executive Wayne Jack's delegated authority cap is $500,000.

Dr Andy Asquith, a senior lecturer at Massey University's School of Management, said the increase could undermine the democratic side of local government, and create a "huge concentration of power".

Dr Asquith said the cynic in him suggests that "it's just another way of undermining the role of councillors".

"It is a slippery slope downwards and you get to a point eventually where you ask the question 'what do councillors do?'.

"The problem that we have in New Zealand is that within councils, the bulk of the power sits with the chief executive anyway, and councillors have an increasingly smaller pot of power and responsibility that they control.

"What this has done, is it has taken away some of that power and responsibility and given it to the most powerful person in the building," he said.

Hastings District Council's new chief executive To'osavili Nigel Bickle is welcomed at Waipatu marae in Hastings in February. Photo / File

The previous delegations to the chief executive were made in 2009 and last modified in 2014.

In 2018 the Council reconsidered the delegations to the tenders subcommittee and set the level for that financial threshold committee at $10,000,000.

In a report to council proposing the amendments, it said the $500,000 limit was having the effect that an "increasing" number of matters needed to go before the tenders subcommittee "despite the council having already committed budget funds.

"This process adds little in terms of financial oversight but does cause delay which in turn inhibits the prompt response suited to the present contracting environment," it stated.

They highlighted the fact that the previous level of delegated authority to the chief executive "reduces the flexibility to respond to a difficult contracting environment.

"In particular, it is becoming difficult to get the best value from the negotiation stage when there is an inability to formally commit until after the tenders subcommittee considers the issue."

The report stated that the number of matters that came before the tenders subcommittee had increased as inflation caused the number of contracts above the $500,000 level to slowly rise.

Bickle, who took over the role from acting chief executive Neil Taylor in February, said what he observed in his first few months was that because the delegations were set "pretty low in the financials" it meant a lot of things had to go back through council even when it was "in line with the plans that have been adopted in the budget".

Bickle said the tenders subcommittee had not met between April and October and that this was a result of the changes to his delegated authority.

He added that this change had been adopted and agreed to by the full council in May this year, and the reasons are all set out in a publicly available council paper.

"It is the council which sets the long term direction for the community in the form of the long term plan. The elected members adopt these plans and set the budgets for it, while holding me to account for delivering them.

"Even with these delegated financial authorities, I cannot do anything unless it aligns with the council's long term plans and unless it aligns with the budgets that have been set by the council.

"Therefore, my financial delegated authority only relates to expenditure which is already in budgets set by the council," Bickle said.

He said there is a range of "stringent checks and balances for this delegated authority", including the audit and risk committee and external audits.

He noted council's high rating for financial management as an example of the checks and balances.

This week the council had its AA long term credit rating affirmed by international independent financial analysis and rating agency Standard and Poors, which also predicted a stable outlook for the council amid increased deficits as it rolls out its essential water infrastructure upgrades.

"This change is a sign of a progressive council which actually understands the difference between governance and management and I am completely confident in the integrity of this decision."