A big shake-up of local government, stemming from the Government's concerns about soaring rates and council debt is expected to be announced next week.

Local Government Minister Dr Nick Smith said yesterday that the changes would be significant.

However, he would not be drawn on the details, which are expected to be signed off by the Cabinet on Monday as part of the Government's broader public sector reforms and programme of economic growth.

The changes could be announced in one or two stages. The minister said the Government was concerned about the escalating levels of council debt since legislation in 2002 that widened the scope of council responsibilities.


"In the decade since, we have seen debt quadruple from $2 billion to $8 billion and rates increase at more than twice the rate of inflation.

"The reforms will be about improved cost control in the local government sector and will set out a work programme with local government," Dr Smith said.

Changes flagged by Dr Smith in the past few months include focusing councils on essential services, such as roads, waste, libraries, dog control and issuing consents.

They also focused on providing tools to control costs, such as the local government wage bill and chief executive salaries.

The minister has expressed concern about councils getting involved in social issues and taking on risky events, such as the V8 car race that cost Hamilton ratepayers more than $40 million.

The reforms could spell the end of regional councils, open the door to more mergers along the lines of the Auckland Super City and streamline the endless planning documents and bureaucracy imposed on councils.

The country's mayors and council chief executives have been invited to a series of briefings from Tuesday to Friday next week. Local Government New Zealand president Lawrence Yule, who has been briefed by Dr Smith on the reform package, said he was unable to comment.