In Head Start Done Right, Senior Fellow Nick Clark says the real problem is not that we have too many councils. It is that too much power has been taken away from local communities and moved to central government.
“New Zealand already runs one of the most centralised systems in the developed world,” says Clark. “Fewer and bigger councils will not fix that. It will make it worse.”
This matters for ordinary people and for business. Bigger councils are further away and harder to hold to account. Rates keep going up. And the basics that people rely on, like roads, water pipes and building consents, keep falling behind.
The report looks at the Government’s Head Start plan, announced on 5 May 2026. Councils have until 9 August to put forward plans to merge. Those that do not, or whose plans are turned down, will have a merger arranged for them. Regional councillors will not stand again in 2028.
Clark says the idea that bigger councils save money does not stack up. The Infrastructure Commission looked at this in 2022 and found no link between the size of a council and how cheaply it runs. Auckland’s big merger in 2010 was never properly checked, so the promised savings were never tested. What we can measure is not encouraging. Spending per person and household rates both rose sharply.
“Auckland is the example to learn from, not to copy,” says Clark. “The savings never showed up. But Auckland is not the worst council either. Its spending and debt have grown about the same as everyone else’s, or a little slower. If bigger really meant cheaper, the country’s biggest council would be the star case for it. It is not. That tells you size is not what controls cost.”
The report says the plan ignores four things: whether merging councils actually works, the value of having councils compete with their neighbours, how the new councils will be paid for, and the loss of local voice when councils get bigger.
The report does not argue against change. It sets out five simple rules for doing it well. Do not merge more than you need to. Draw boundaries around real communities, not lines on a map. Give local communities a layer of government with real power. Find a proper home for region-wide jobs, like managing rivers and flood protection. And at the same time, fix how councils are run, so that elected mayors and councillors, not council staff, are the ones really in charge. It also calls for changes to the way councils are funded.
“The Government has asked councils to lead their own reform, and that is the right call,” says Clark. “Councils that build their plans on sound rules will be in a much stronger position than those that just do a standard merger. The choices made in the next few weeks will shape local government for decades.”
This matters for ordinary people and for business. Bigger councils are further away and harder to hold to account. Rates keep going up. And the basics that people rely on, like roads, water pipes and building consents, keep falling behind.
The report looks at the Government’s Head Start plan, announced on 5 May 2026. Councils have until 9 August to put forward plans to merge. Those that do not, or whose plans are turned down, will have a merger arranged for them. Regional councillors will not stand again in 2028.
Clark says the idea that bigger councils save money does not stack up. The Infrastructure Commission looked at this in 2022 and found no link between the size of a council and how cheaply it runs. Auckland’s big merger in 2010 was never properly checked, so the promised savings were never tested. What we can measure is not encouraging. Spending per person and household rates both rose sharply.
“Auckland is the example to learn from, not to copy,” says Clark. “The savings never showed up. But Auckland is not the worst council either. Its spending and debt have grown about the same as everyone else’s, or a little slower. If bigger really meant cheaper, the country’s biggest council would be the star case for it. It is not. That tells you size is not what controls cost.”
The report says the plan ignores four things: whether merging councils actually works, the value of having councils compete with their neighbours, how the new councils will be paid for, and the loss of local voice when councils get bigger.
The report does not argue against change. It sets out five simple rules for doing it well. Do not merge more than you need to. Draw boundaries around real communities, not lines on a map. Give local communities a layer of government with real power. Find a proper home for region-wide jobs, like managing rivers and flood protection. And at the same time, fix how councils are run, so that elected mayors and councillors, not council staff, are the ones really in charge. It also calls for changes to the way councils are funded.
“The Government has asked councils to lead their own reform, and that is the right call,” says Clark. “Councils that build their plans on sound rules will be in a much stronger position than those that just do a standard merger. The choices made in the next few weeks will shape local government for decades.”
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Nick is a Senior Fellow at The New Zealand Initiative, focusing on local government, resource management, and economic policy. This article was first published HERE
4 comments:
For 'local communities' read hapus; for 'local councils' read servile treatyists. You think you are being offered a choice, but not really.
I'm baffled by this message consistently coming out of the normally astute NZ Initiative. This statement is a prime example: "Bigger councils are further away and harder to hold to account. Rates keep going up. And the basics that people rely on, like roads, water pipes and building consents, keep falling behind." There seems to be a confusion of cause and effect - an assumption that higher rates and diminishing performance are somehow connected with consolidation of Councils. The reason why Councils of all shapes and sizes squander money are (a) public apathy, (b) left wing capture, (c) absence of competition, and (d) power to charge a captive market on a cost-plus basis. You can't tell me that dividing up the Auckland Council back into its seven city and district councils plus the Auckland Regional Council, will eliminate any of those factors, and somehow transform the decentralised bodies into paragons of efficiency. Instead, it would simply reintroduce inconsistencies in policy and duplication of resources. Rather than amalgamation, we need to legislatively limit Councils to core responsibilities like water, roading, building control, refuse disposal and parks, and leave everything else to the private sector or charities.
Central govt will always want bigger local govt units. Why? It’s always easier to dominate a few LGs than lots. Smaller units are always more aware of, and fight for, local issues. The constituents of smaller areas don’t hesitate to put the pressure on their representatives, whom they may well know personally. Central bureaucrats hate that. The bigger the LG unit, the lower the vote. Central politicians love that. No doubt about it folks: the bigger the unit the less notice they take of, and the greater the cost to, the poor benighted ratepayer. And here’s the best part; you don’t even get a choice!
Councillors are a waste of space - none of them have been effective in reigning in rates rises or the handing over to iwi of control….isnt that what we all keep voting for?
Seriously not a single councillor who stood for lower rates has delivered lower rates.
We keep thinking that we’re participating in local govt but we absolutely aren’t.
Again the idea of mergers….where has this come from? What coalition party campaigned on this?
They’ve had three years to remove co governance and achieved exactly zilch….but somehow they can implement 3 waters (u der a different name - that iwis control) and now merge councils?!
What the actual f***!?
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