Future for Local Government Report: time for a reality check?

The Panel has packed its bags and gone home; Report delivered, job done!

The local government sector has had a couple of weeks to reflect on the Report. Generally, going by public statements from a number of spokespeople, it looks as though the Report is seen as satisfying many of the concerns which local government’s peak organisations have held. Local Government New Zealand’s analysis comparing the Report’s recommendations with those made to the Panel by LGNZ notes:

·???????10 out of 17 of the Panel’s final recommendations match the recommendations that LGNZ had made in its submission on the draft Report.

·???????19 out of 23 of LGNZ’s recommendations are adopted in the Panel’s final Report.

The LGNZ response

That’s a pretty good satisfaction rating. So, where to from here? A posting from LGNZ’s chief executive notes that one key message LGNZ has heard from central government is that local government is going to get more buy-in from central government if it’s united in its goals and its vision for the future. That seems a reasonable attitude for central government to take.

?LGNZ obviously agrees. Its National Council wants to respond strongly to the Report with the backing of all its members. It will be taking a proposal to its AGM later this month for developing a collective way forward to be presented to the government which takes office after the election in October.

Also a reasonable attitude to adopt. LGNZ is after all a member organisation representative of its membership.

A reality check

Now for the reality check. What are the prospects for this collective approach (assuming that it is broadly based on acceptance of the Report’s principal recommendations). More broadly what are likely scenarios for the post-October central government, whatever its composition, agreeing to and implementing recommendations which broadly match what the Panel and LGNZ support?

Guidance from history

History provides some guidance. The Labour government which set up the David Shand led inquiry into Future Funding of Local Government basically ignored its recommendations. The government which received the Report of the Royal Commission on the Governance of Auckland preferred Rodney Hide’s views on substantive matters to those of the Royal Commission. Successive governments have largely ignored observations and recommendations from the Productivity Commission on the role of local government and on central government/local government relationships.

?Nanaia Mahuta’s 2018 vision for local governance as an enabler of community well-being, intended to set the agenda following the reintroduction of the well-being purpose into the Local Government Act, was basically ignored by her colleagues.

Political party reactions

?What do we know from political party reactions so far? The ACT party has totally dismissed it with its local government spokesperson stating “the role of local government should be to provide services that neither central government or private enterprise can provide. This Report endorses Local Government to keep failing hard at essential services, while pursuing a range of tiresome woke agendas.”

This strongly suggests that, if the post-October government is a National/ACT coalition, the Report’s recommendations will be off the agenda.

What about a Labour/Greens/Te Pati Maori combination? The current Minister of Local Government, in a letter to LGNZ following the release of the Report, appeared encouraging but was very clearly kicking any government reaction into touch until after the election. Given the challenges that combination would face in office, it’s very unlikely implementing the Report as a package would even get onto the Cabinet agenda let alone be approved. First, that government (and the alternative of National/ACT) will face a daunting fiscal situation. Further taxpayer funding for the core business of local government seems unlikely, especially as the first claim on any taxpayer funding at a community level will be from cyclone recovery and resilience investment demands (including what looks likely to be ultimately billions of dollars to deal with our substandard roading infrastructure).

?It’s also important to keep in mind that the Panel’s recommendations are built around legislative intervention. That’s inevitably a long drawn-out process and one which can be quite difficult to manage especially in a multi-party working environment.

?So, what are the likely scenarios?

Least likely is implementation of the Report’s major recommendations in anything like a timely fashion, especially in terms of further funding for local government.

If the post-October government is a Labour/Greens/Te Pati Maori combination some aspects of the Report will be picked up, for example, a greater emphasis on embedding the principles of Te Tiriti. However in terms of local governance, that combination’s attention is much more likely to be taken up with implementing the affordable waters reforms (there is good reason to believe that the implementation process is going to be much more complicated and difficult than is currently publicly understood), sorting out RMA replacement legislation and dealing with the ongoing problems of cyclone recovery, remediating loss, and developing a framework for resilience planning.

Almost certainly if the post-election government is a National/ACT coalition and quite possibly if it is a Labour/Greens/Te Pati Maori combination, the post-election government may see the strongest message from the Report being its emphasis on questions of efficiency and structure. It is already clear from what ACT’s spokesperson has said that this will be top of mind for ACT and possibly, as with the last ACT/National coalition, one of the matters which ACT seeks as a condition for its relationship with National, whether as a coalition partner, or simply in a confidence and supply agreement.

There is enough in the Report’s discussions of future structure for a future government to seize on as support for a drastic restructuring of local government which would come very close to eliminating the territorial local authority level in favour of creating a series of unitary councils across the country. Furthermore, the Panel’s own support for bringing in appointed members (not included as a recommendation in the final Report because, as the Panel stated, of pushback from local government) could be picked up by a future government thus raising the spectre of local government coming much closer to being under central government control.

What is the outlook for local government?

Is the outlook, despite the currently cheerful thoughts in the sector around the potential benefits of reform, really one of doom and gloom?

The answer is a qualified no. If local government relies solely on negotiations with central government to achieve the outcomes it wants to secure its future, then the answer would be a clear yes; local government would be writing, if not its own death warrant, at least something close to a life sentence of government dominance.

It does matter that the sector continues to negotiate with central government in good faith. At the same time however there is much which can and should be done in the here and now, not just to strengthen local government’s position, but to respond to immediate and pressing need in its communities.

New Zealand local government, in sections 10 and 11 of the Local Government Act which respectively define its purpose - enabling local democracy and promoting community well-being - and its role - furthering the purpose within its region or district - has the most extensive mandate of any local government sector in the developed world to work with and empower its communities.

Globally it’s becoming much more common to argue that the purpose of local governance should centre around enabling and empowering communities so as to give voice choice and control to communities over decisions which affect their place. Best practice includes how to enable self-identifying communities (important in order to know that places defined as communities are recognised by the people of the place), and what works both for supporting capacity and capability development, and ensuring that councils themselves as entities benefit.

At the heart of this shift is moving away from the current top-down centrally dominated approach to government to much more of a bottom-up approach intended to ensure that local knowledge, networks and needs are to the fore.

A transformational option?

One standout is the anchor institutions approach. This approach recognises that, in any district, there are a number of entities which are anchored to the place by virtue of their role, and/or of activity specific investments. Examples of anchors include councils, hospitals, educational institutions, ports, major energy installations…

The potential is truly transformational. Preston City Council provides a good example of council led anchor institution practice. See: https://www.preston.gov.uk/article/1335/What-is-Community-Wealth-Building

What’s really fascinating though, and very relevant for New Zealand at the moment, is a recent development by the UK’s National Health Service. It has recently restructured arrangements for health and care through the creation of a network of Integrated Care Services.

The NHS brief for integrated care services includes that they should take the initiative in enabling an anchor institution approach as a means of strengthening their capability for delivering preventative health care. It’s all about addressing the social determinants of health. At the core of this approach is the recognition there is a strong correlation between a healthy local economy and a healthy local population.

Localities planning is theoretically at the heart of the process of health reform, intended according to the legislation to enable communities, and iwi/Maori, to articulate their health needs and how they are best addressed. As in the UK, there is quite strong evidence of the correlation between poor health and poor economic status.

It’s a golden opportunity for local government to demonstrate its relevance as a local entity focused on community governance, and working at the very local level, empowering self-identifying communities, and adopting an anchor institution approach. This is just one example of what should be in local government’s plan B. There are numerous other challenges at a local level which similarly need to be addressed in ways which bring in a strong community voice.

At the heart of this needs to be empowering self-identifying communities, drawing on international experience such as that in Portland Oregon, and building on the wealth of effective strategies and techniques which have been developed internationally including local place plans (following the Scottish approach) participatory budgeting (increasingly common internationally as perhaps the best way of building local democratic participation) and community Wealth building.

None of this needs central government permission. None of this needs legislation. What it does need is vision based on a genuine belief that local government is much more than simply a creature of statute; it is the visual embodiment of the commitment in every community to the importance of being able to exercise governance over its place - which is also perhaps the ultimate unifying theme for sharing an understanding of the importance of applying the principles of Te Tiriti at the local level.