Frank Newman: LGNZ should tear up agreement with central government and replace its President

The Timaru District Council has withdrawn its membership from Local Government New Zealand (LGNZ).  Stuff reports, "councillors voted unanimously to remove itself from LGNZ, as it felt the organisation had not done enough to advocate for councils concerned about the Government’s proposed Three Waters reform".  Councillors said it had become a 'mouthpiece' for the Department of Internal Affairs. See HERE >>>

It is the first council to withdraw its membership but it may not be the last. This week the Christchurch City Council took the first steps towards doing so. They too expressed concerns about the position LGNZ had taken on Three Waters and a majority of councillors asked staff to prepare a report on the consequences of cancelling their membership. The Mayor and ex Labour Party minister, Lianne Dalziel, was the only member to vote against the motion.

So what’s going on?

Essentially the problem is LGNZ entered into a formal Heads of Agreement (HoA) with the government to support its Three Waters proposal and "sell" it to their members.

LGNZ President, Stuart Crosbie, and his vice-president signed the agreement on behalf of the National Council on the 13th of July this year, just two days before its annual conference. They did so without seeking the consent of its full membership of 77 local authorities.

On the 9th of October Stuart Crosby, wrote an opinion piece in Stuff, (See HERE >>>) which essentially appears to be a reply to an article by Mike Yardley published by Stuff four days earlier called "Surely Three Waters comes down to a captain's call?" (See HERE >>>). 

The crux of Stuart Crosbie's rebuttal was that the HoA has been "misunderstood" and that he needed to dispel "misinformation" being spread by people who are "wilfully ill-informed" and were not playing "with a straight bat".

He said, "Unsurprisingly, this commitment isn’t shared by some commentators, like Mike Yardley, nor the wilfully ill-informed keyboard warriors on social media. Several have freely waded into the water space, unrestrained by any obligation to play with a straight bat. That’s to be expected. We live in a democracy after all. And as we’re finding out with public health, people have a right to hold poorly-informed beliefs."

He went on to drum-beat the virtues of his association, including the claim that they had "stayed on the sidelines" about the Three Waters reforms. 

"As the peak body representing almost all councils in New Zealand, Local Government New Zealand derives many strengths from its broad membership of rural, provincial, metro and regional councils. We also have challenges from being such a broad church – especially when trying to establish a single sector position on major policy issues. For that reason, we have tended to stay on the sidelines of public debate about Three Waters reforms. And doubly so because we see it as central government’s job to promote its own policy."

He goes on to say:

"Our job, instead, has been to help councils better understand both the changing regulatory environment that gave rise to the reform proposal, and the potential impacts the reforms may have on communities and councils. That’s because we’re committed to fact-based and evidence-led policy analysis before making big decisions."

The problem is, his claims about LGNZ's role is at odds with the HoA he signed.

Paragraph four, headed "LGNZ support of Three Waters Reform", requires LGNZ to support and promote the proposal. It states (emphasis added):

4.2 Accordingly, LGNZ commits to supporting, endorsing and promoting the Three Waters Reform Programme.

4.3 LGNZ commits to:

(a) supporting the case for change by:

(i) publicly supporting the position that there is a sufficient and evidence-based national case for change, including that the current approach to three waters service delivery is not capable of delivering the outcomes required in an affordable and sustainable way into the future;

(ii) noting the analysis supporting the Crown’s preferred approach to reform has been tested through the design process, and expressing the view that the proposed model design and approach to reform is sound, appropriate and beneficial when viewed as a whole at a national level; and

(iii) assisting LGNZ’s members to understand the reform-related information being provided to them by or on behalf of the Crown, how the reform is intended to work and the impact it is likely to have on local authorities and the communities they serve, including throughout the transition period – and in respect of which the Crown (through DIA) commits to supporting LGNZ and the local government sector to actively engage in the transition process and to working through the remaining questions and further policy detail with LGNZ with a view to supporting a smooth transition to, and successful implementation of, the Three Waters Reform Programme;

(b) endorsing the Three Waters Reform financial support package announced by the Government (as contemplated in this Heads of Agreement);

(c) if, after the end of the period referred to in clause 3.2(b), the Government decides to adopt an “all in” legislated approach to the Three Waters Reform then LGNZ agrees that it will accept such a decision on the basis that:

(i) “all in” participation of local authorities is needed to realise the national interest benefits of the reform;

(ii) such acceptance does not imply that LGNZ supports such approach;

(iii) LGNZ will not actively oppose such approach; and

(iv) LGNZ may publicly express its disappointment that the Government has considered it necessary to adopt such approach.

(d) leading and supporting the local government sector through change arising from the Three Waters Reform Programme, in the interests of a constructive and orderly transition process.

4.4 The Crown (through DIA) and LGNZ will each use all reasonable endeavours to agree a timetable to support the reform (which is consistent with Cabinet decisions in relation to the Three Waters Reform Programme) including the staged release of information and the process to develop individual local authority agreements.

The full Heads of Agreement may be viewed HERE >>>.

In summary, the Agreement that Mr Crosbie himself signed requires LGNZ:

• to support the government's proposal;
• to say it is sound, appropriate and beneficial;
• to endorse the payments package offered by the government;
• to agree to an approach that requires all councils to opt-in, and
• to not oppose the all-in approach even if some, most or all of their members do. It was however permitted to say "it is disappointed" (presumably as a face saving gesture).

Nowhere does it state that the role of LGNZ is to seek the opinions of its members and convey those views to government, which is what one would expect from a representative body, particularly when the LGNZ website says this about itself, "We represent the national interests of councils in New Zealand and lead best practice in the local government sector."

Stuart Crosbie also says,

"Central government largely remaining silent hasn’t helped. Sadly, it’s left space for public discourse to become tainted by these fact-light, opinion-heavy views. Like many challenging issues in our country, it falls on local government to do the heavy lifting and set the record straight."

In fact, central government has not remained silent. What hasn't helped is the infantile and demeaning play-school style advertisements that misrepresent the state of council water services.

And Minister Mahuta has regularly made public comments about Three Waters, albeit largely repeating the mantra that the case for change has been proven; something that LGNZ is not permitted to publicly disagree with according to the HoA.

He concludes with a parting shot,

"These are the stark facts some commentators and other political players are presumably unaware of, or indeed, are choosing to wilfully ignore for whatever reason. That’s their right. This isn’t a path we’d ever choose, but that doesn’t mean we have to allow these positions to go unchallenged. Ignoring the case for change isn’t going to make that change disappear. It just makes it much harder to adapt when the change occurs."

Although Mr Crosbie implies critics have not played with a straight bat, it seems he is not averse to another sporting analogy, playing the man and not the ball. For Stuart Crosbie to blame and belittle others is a miscalculation on his part.

This is what Mike Yardley said,

"one of the biggest casualties from this beleaguered model could well be the body that purports to represent the interests of territorial councils – Local Government New Zealand (LGNZ).

"How could a representative body with a core role of advocating for the interests of its member councils and the power of local representation trample all over its central purpose, in such breath-taking fashion?

"There is profound dismay that LGNZ blithely signed a heads of agreement with the Government, in July, in exchange for a $2.5 billion cash support package to sweeten the sell to councils. Signing that agreement without the engagement or consent of its member councils was a flagrant breach of good faith."

Those are fair comments and Mike Yardley is not alone in saying them. 

Mike Yardley has some advice for LGNZ: "Swiftly rescind the heads of agreement."

That's good advice. I too have some advice for LGNZ: Suggest to Stuart Crosbie that he stand down immediately as President so the vacancy can be filled with someone better able to begin repairing the relationship LGNZ has with its members.

Rescinding the HoA and replacing Stuart Crosbie might be enough to stop other councils from taking the alternative action which is to pull out of LGNZ.

Frank Newman, a political commentator and investment analyst, is a former local body councillor.