The Government has initiated the first independent review of the local government sector in three decades that will focus on how "local democracy" and local governance need to evolve over the next three decades.
The review panel will be made up of five people and is expected to report back in April 2023.
The panel is to explore local government's future in terms of roles, functions, partnerships, representation, governance, funding and financing. The review is also tasked with honouring the Treaty of Waitangi and its principles.
The review is timely and follows hot on the heels of sweeping changes to the delivery of water services that, if adopted, will result in drinking water, wastewater and stormwater services being delivered by new, large, centralised entities. The changes will leave a gaping hole in councils' core service activities and begs the question, what's next for councils?
That is the question driving the future of local government review and will result in the biggest shake-up of local government in a generation.
The review panel has been given a broad mandate and will consider what councils should do, how each should do it, and how each should pay for it. This includes roles, functions and partnerships; representation and governance; and funding and financing.
Constant changes and new rules through successive governments have in the past come with little or no national funding, leaving some councils struggling to adapt with just general rates for income.
The current model of funding and financing council activities is not sustainable. Most in the local government sector will welcome the discussion on this issue.
The representation and governance component of the review may well lead to the most controversial outcomes. The Government has recently demonstrated their clear belief that a centralised, "big is better" approach to service delivery, is the way of the future.
That's why 20 health boards will soon disappear and be replaced by a new sole health entity based in Wellington. That's why water services currently provided by 67 territorial councils in New Zealand will soon be aggregated and delivered by fewer than six new water entities across New Zealand.
Looking at these two examples, it becomes apparent that the governance review will lead to some gnarly discussions that are sure to include amalgamation proposals.
Ask yourself this: if the Government doesn't believe we need 20 health boards in New Zealand, then why would they believe we need 78 councils. This is especially so in an environment when councils, no longer providing water services, will collectively be looking for things to do to fill the gap.
The current local government system that was largely set in place in 1989, is simply not geared for the kinds of challenges we see today. Across councils most agree, there needs to be a genuine first principles discussion around what services are best delivered locally, which services regionally and what centrally.
It's my view, infrastructure delivery needs a degree of scale that in reality 67 territorial authorities are not optimised to implement. As a sector, we need to work more collaboratively in these areas. But equally, there are a range of public services which do not benefit from scale and which can and should be delivered closer to affected communities.
Housing and social services delivery are often mooted by some people as examples of better delivered at a local level. Maybe this is the future of local government? Time will tell but it is going to be a really interesting two year review.