Sunday, December 1, 2013
Mike Butler: Bigger councils not always better
Hot on the success or otherwise of the creation of the Auckland Council, it appears the Local Government Commission is embarking on a cookie-cutter approach to solve real or imagined local authority under-performance by imposing merger schemes in the regions and in so doing conjuring up nominated Maori boards.
Hawke’s Bay is the most recent target of this initiative. On Tuesday, the Local Government Commission released a draft proposal to merge the region’s five local authorities – the Napier, Hastings, Wairoa, and Central Hawke’s Bay councils and the regional council -- into a single unitary Hawke’s Bay Council run by one mayor, nine councillors, five community boards, and a nominated Maori board.
The commission’s proposal was prompted by a plan put forward earlier this year by a lobby group named A Better Hawke’s Bay, which argued that merging the local authorities into a unitary council would deliver more effective decision making.
Three of the region's four mayors (Napier, Wairoa, and CHB) strongly oppose a merger, saying it would destroy the autonomy of local communities. For those readers unfamiliar with Hawke’s Bay, the Napier and Hastings are 20km apart with Wairoa 115km north of Napier and Waipukurau 50km south of Hastings.
Expert opinion has been brought in to bolster the cases for or against amalgamation.
Two reports funded by the Hawke’s Bay Regional Council and completed last year at a cost of over $60,000, by Peter Winder, a former chief executive of the former Auckland Regional Council, pointed to savings of $10.3-million a year and argued that amalgamation would establish a single voice for the region, provide a better relationship with central government to get more funding, reduce costs and improve performance of local government, and combine the financial strength of the region's authorities.
But the Napier City Council this week released a further 157-page report it commissioned from an Australian academic and consultant, Professor Brian Dollery, entitled Bigger Is Not Always Better, that critiqued two Winder reports, along with a draft amalgamation proposal for the Northland region released by the Local Government Commission earlier this month.
Professor Dollery says amalgamation scenarios outlined in the Winder reports and the Northland amalgamation proposal, "are not supported by available empirical evidence and past experience of compulsory council mergers".
He wrote that “a wealth of material” exists and shows that forced amalgamation seldom improves local government, “especially in non-metropolitan areas”, and said that effective regional leadership “is best fostered through the establishment of regional development bodies rather than divisive battles over forced amalgamation which typically results in the domination of regional areas by regional centres.
If, after public consultation, the Local Government Commission decides to press on with amalgamation in Hawke's Bay, that decision could be overturned by a regional referendum triggered by 10 percent of voters in any one of the council areas affected by the change signing a petition requesting a poll.
A quirk of the Hawke's Bay situation means that just two voters living on the remote boundary between the Hawke's Bay and Horizons regional councils could force an amalgamation referendum.
There are a few further points to consider regarding the Hawke’s Bay proposal that would probably equally apply in the Far North and Wellington, or in fact every other area:
1. No evidence has been offered on how a single mayor, nine councilors, five community boards and a Maori board would improve decision-making.
2. No evidence has been presented on how a super council is going to bring jobs and lift the economy when private business people are those who do the development and bring the jobs. Councils merely suck exorbitant consent fees, ground rent, and rates from private business people.
3. Evidence suggests that the existing set-up is already the most efficient from an economic viewpoint.
4. The amalgamated Auckland council is a vision of what lies ahead for our region. That amalgamation brings expensive pipe dreams (like Mayor Len Brown’s train set) funded by perpetual rates increases and reduced services (like Auckland’s un-mown berms).
5. The appointed Auckland Maori Statutory Board brought multi-million race-based demands and a proposal to require tribal consent in conjunction with building permits.
It is possible that much could be achieved by going in an opposite direction – by local authorities going smaller and contracting out services.
A future local authority structure could have fewer elected representatives around population centres, with small offices dealing with building consents, roads, sewage, water, parks and so on.
There are already numerous examples of local authorities that found that forced amalgamation just did not work for them so de-amalgamated. One United States municipality, Sandy Springs, Atlanta, found that their rates were going elsewhere in Atlanta so incorporated as a new local body in 2005.
In the absence of a structure to pave streets, pick up rubbish, maintain parks, as well as run police and fire services (which come under local authority control in the United States), the new local authority hired a private management company to employ subcontractors
The management company CH2M Hill did for $US25-million in the first year, a job that would cost a similar-sized local body $US50-million.
All of the functions local authorities perform could be contracted out with huge cost savings that should be passed on to ratepayers.
Bigger councils are not always better.
Super council proposal spat widens, H.B. Today, November 29, 2013. http://www.nzherald.co.nz/hawkes-bay-today/news/article.cfm?c_id=1503462&objectid=11164557
Unhappy councils ordered second report on bay merger, Dominion Post, November 29, 2013.
Sandy Springs, Georgia: The City that Outsourced Everything, http://www.youtube.com/watch?v=f8qFvo2qJOU
Two voters may decide merger plan, H.B. Today, November 27, 2013.
at 3:03 PM