Auckland to pay more for lesser councils - expert

Auckland city. Photo / NZ Herald

Aucklanders will pay more for less efficient councils and have lost the "local" from local government, according to one of New Zealand's leading public policy experts and a national consultancy.

Professor Ian Shirley, Pro-Vice Chancellor of AUT University, and Professor of Public Policy with the University's Institute of Public Policy, addressed the National Policy Makers Conference 2010 in Wellington on August 17. He is also a member of the Auckland Regional Economic Development Forum, but his speech went largely unreported.

Professor Shirley maintains the proposed model for the structure of Auckland's governance effectively removes local government from Auckland.

He argues it will be replaced with "a corporate structure where the major beneficiaries will be the exclusive brethren of big business, merchant bankers and a narrow range of consultants dominated by legal and accountancy firms".

Professor Shirley says the Minister of Local Government's plan "ignores history, fails to connect in any meaningful way with the diverse populations and neighbourhoods of the region and has established a corporate framework and process that will not gain the trust of ratepayers."

Professor Shirley says the 21 local boards proposed will be toothless. Further, 75 per cent of Auckland's public assets will be transferred to Council Controlled Organisations with the majority of directors for the CCOs appointed by government ministers.

"In this case, CCO's stand for Corporate Controlled Organisations, with the elected members on local boards having little say over how those assets are used," he says.

His views are underlined in a report by McKinlay Douglas Ltd, a Tauranga-based consultancy, for Local Government NZ, the umbrella group for councils and the like.

Twenty-five years after major amalgamations of local government across New Zealand in 1989, the report looked at the national scene as well as international mergers.

It found: "Rather than economies of scale providing a rationale for amalgamation, the weight of evidence suggests both that larger authorities may be less efficient, and that the better means of seeking economies of scale is to do so on a service by service basis - whether through collaboration, joint ventures, outsourcing or other means."

It finds large councils can suffer from "dis-economies of scale" - when the scale of a council grows so large that a level of extra middle managers must be hired to handle the frontline staff.

Another unfortunate outcome is that it makes it tougher for elected members to monitor performance of council services.

Nor will a larger council necessarily get better deals when buying equipment or services for the region.

"Similarly, large councils can become very bureaucratic, cumbersome and responsive as elected members find it more difficult to monitor the performance of their staff."

Full report - www.theaucklander.co.nz