Government reforms set to change the Local Government Commission's role after its first review since 1947

The Minister of Local Government Nanaia Mahuta has announced plans to rein in the Local Government Commission (LGC) in a bid to make it tougher to amalgamate councils around the country.

In a statement Mahuta says recent attempts to amalgamate or change the structure of the country's councils have been divisive and unhelpful and have been a distraction from "the real issues facing local communities".

Since 2012 the commission has received seven applications to reorganise or amalgamate local authorities. This includes those in Northland, Hawkes Bay, Wellington, Waiheke Island, North Rodney, Wairarapa and the West Coast. 

“Currently, any individual can request that the Local Government Commission investigate a proposal to reorganise or amalgamate a local authority. I intend to reinstate the requirement that requests can only be initiated by ten per cent of the electors of an affected area,” Mahuta says. “These proposed changes will also introduce a new locally-led reorganisation process, where local authorities can investigate reorganisation proposals themselves.”

In 2017 the Department of Internal Affairs commissioned RDC Group to carry out a review of the Local Government Commission and its functions. Despite the fact it had been operating for over 70 years it was the first time it had ever been subject to a review.

The report found that the concept and rationale behind the commission’s role was "relatively weakly aligned with the current and future needs of the local government sector" and states:

“Given that none of the seven reorganisations attempted since 2012 have resulted in substantive change to local government arrangements, it is in our view highly questionable that the time, money and other resources committed to the consideration of reorganisation proposals under the current process represent value for money.”

Mahuta says commission’s main function of overseeing major amalgamations and changes is no longer essential or useful and doesn’t provide good value for money.  

She says the proposed changes are the first stage of a programme to disestablish the Local Government Commission in its current form. Stage two will involve considering new ways of carrying out the necessary ongoing functions, in partnership with local government.

Mahuta says the changes will be included in amendments to the Local Government Act 2002.

The Local Government Commission was established in 1947 to review what local authorities do and how they are organised. At the time New Zealand had 700 local bodies.

It was recognised at the time that local government needed to be reformed. But it wasn’t until 1989 that the government, with the commission's help, actually slashed the number of local authorities from 850 to 86.

But the RDC Group report says times have changed.

“Since then the number of local authorities has remained roughly the same. The 2009 Auckland reform was the last major reorganisation (the Commission implemented aspects of this). More recent reorganisation proposals, e.g. Hawkes Bay, Wellington, Wairarapa, and Waikato water, have failed. It is possible that the number of councils, and the way these are organised, has settled at a ‘natural’ level’.”

A spokesperson for Local Government New Zealand (LGNZ) says it supports raising the threshold required to call for the amalgamation, or reorganisation, of a council.

“Any major political reorganisation should be able to demonstrate an adequate level of support before proceeding. Currently, any individual can trigger an amalgamation, which has led to a considerable amount of resources devoted to failed amalgamations.  LGNZ support the Minister’s moves to raise the threshold so that any proposal has an adequate level of support.”

“LGNZ welcome the invitation to work with the Minister on the future role and shape of the Commission, given that it was established at a time when there were more than 850 local authorities and that most of its work has actually been completed – therefore a different approach is needed.”