Just What Were We Voting For?

Answering the title’s question seems a no-brainer; we were voting to determine who should have control of central government deciding the large national questions of the day including the choice between government knows best and the market knows best.

Dig a little deeper, put aside the reflex answers and we were also voting for something quite different and quite likely more important; who should have what authority to shape the place where we live, and what quality of life we should be targeting.

Why is this you might wonder? Simple answer. Central governments have less and less capability to fine tune, target and deliver services in ways which reflect a real understanding of the needs, circumstances and priorities of the communities in which those services will be delivered. It’s not something widely recognised in New Zealand; we have an ongoing obsession with the central government top-down paradigm of governance. Our distance from the rest of the world means we are out of touch with the research, the evidence and the policy development responding to this new reality.

Instead, we complain more and more forcefully about the poor performance of the public sector (just about any media outlet, on any day, will have at least some commentary to this effect) and at the same time think the solution lies in getting the public sector to perform better. It’s reminiscent of what is said to be Einstein’s definition of insanity, keeping on doing the same thing whilst expecting a different outcome.

The offerings of the two main political parties in the recent election campaign appeared to provide two quite different understandings of who should have the primary role in shaping the places where we live. The Labour Party is unapologetically centralist, clearly convinced that the best decisions are taken in or driven by Wellington regardless of what’s involved. The National Party in contrast appeared to take a different view as can be seen from this quote from an article reporting on a visit by Christopher Luxon to the West Coast:

“We believe very strongly in localism and devolution,” he said. “My major frustration...is that we haven't had a strategic approach to infrastructure development.

So, does this mean a National Led government would empower respect local voices, reflecting the common view internationally on the importance of ‘voice, choice and control for communities over decisions that affect their place’?

Before looking at what we can learn from a quite vast volume of research from different jurisdictions internationally on the nature of communities, community well-being and localism, let’s have a look at what National really means - move beyond the words to the reality of conduct. It’s ‘local water done well’ policy is a really good example. The rhetoric is about ensuring drinking water, stormwater and wastewater remain in local control. The reality is centralised direction which, if National’s policy is implemented, will basically be councils doing what central government tells them to do. Key elements include a requirement to comply with strict water quality standards, to invest in the ongoing maintenance and replacement of water infrastructure and to ensure financial sustainability meaning enough money coming in from rates or user-pays to cover maintenance, depreciation and investment in new assets, with that money to be ring fenced so that councils cannot apply it for any other purpose.

As another example of the approach including taking, National has also stated it will require growth area councils to zone a 30 year supply of residential land.

Localism

The National Party’s concern to deal with substandard infrastructure and problems with the supply of buildable land is understandable, but describing its solution as localism is Humpty Dumpty at work - “When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean – neither more nor less.”

The essence of localism is the ability to take or at the very least strongly influence decisions about place so that they reflect the needs, circumstances and priorities of the communities affected. National’s interpretation appears to be simply one of shifting responsibility from the centre to the local but on central government’s terms.

Virtually every serious issue New Zealand currently confronts in terms of social, economic, environmental and cultural outcomes plays out at a local level and in different ways in different localities driven, among other things, by demographic and socio-economic differences. What we have not done either in public debate or in policy development is put Humpty Dumpty to one side and look at the research evidence about the inherent nature of localism. There is a wealth of research and practice from leading think tanks across the UK and the US which grounds localism in local decision-making by people of the place affected. It is supported by evidence that this understanding of localism is important to building social cohesion, improving community well-being, and simply getting the right stuff done.

Inherent in this view is localism is about doing things with communities, not to communities (something which rules out much of current New Zealand local government practice, but not the potential of local government).

Localism: learning from international research and practice

The definitive description of localism comes from a 2017 report from the UK think tank Locality’s Commission on the Future of Localism chaired by Lord Bob Kerslake, a former head of the UK’s Home Civil Service. This is what the Commission had to say:

Localism must be about giving voice, choice and control to communities who are seldom heard by our political and economic institutions. Localism should enable local solutions through partnership and collaboration around place, and provide the conditions for social action to thrive. Localism is about more than local governance structures or decentralising decision-making. It is about the connections and feelings of belonging that unite people within their communities. It is about how people perceive their own power and ability to make change in their local area alongside their neighbours.

“giving voice, choice and control to communities who are seldom heard by our political and economic institutions” begs a number of questions; what are communities? how to ensure communities have the capacity and capability to make what may be quite challenging decisions? How will the community’s voice influence the way in which services are designed, targeted and delivered?

Looked at purely through a New Zealand lens these questions seem almost impossible to answer. Fortunately there is a rich treasure trove of research and practice from which New Zealand can learn. The first thing delving into this tells us is that empowering communities to exercise voice choice and control is uniquely a function for local government - it is a combination of the typical mandate of a council to work in the interests of its communities with the reality that it is local government through its business as usual activities which has by far the most dense network of relationships across its communities.

Next, the research is clear, both in the UK and the US, that for this purpose communities must be recognised by the people of the community as their place; artificial constructs such as provided for in New Zealand’s Local Electoral Act simply do not qualify.

Fortunately there is now very considerable experience in working with communities which meet this criterion; in both the UK and US the common approach is to establish a set of criteria which a council can then apply for recognising communities, inviting communities to step forward if they believe they meet the criteria.

More detail on this approach, and the underlying research, can be found on the our choose localism strategy page of the local governance think tank website at: https://www.lgthinktank.org.nz/our-choose-localism-strategy

What do National’s policies tell us?

Now back to National and its ‘local water done well’ approach. In a way it shouldn’t be surprising even though it comes from a party whose rhetoric suggests it believes in minimal government interference. For more than 30 years the relationship between central government and local government has been characterised by serious distrust and lack of understanding on the part of central government (something not only well documented by entities such as the Productivity Commission, but also something which screams out from the recent report of the Future for Government review Panel).

The ‘you will do as we say’ tone of ‘local water done well’ is simply part of the DNA of national level politics. This is further compounded by the sad reality that our political parties typically do not have any great expertise in local government and, in common with much of the sector itself, are virtually unaware of the international research and practice from which we have so much to learn.

Devolution - opportunity or major risk?

This carries through to National’s apparent commitment to devolution. This is another Humpty Dumpty term. It sounds like passing authority (and presumably resourcing) from one entity to another with full power to act; a standard definition is “the transfer or delegation of power to a lower level, especially by central government to local or regional administration.” Surely it must be in the interests of local communities if central government devolves significant services to a local level.

Again, let’s look at the evidence. Lobbyists for greater devolution point to the experience with local government in Europe arguing there is a positive correlation between the proportion of public sector expenditure undertaken by local government, and the productivity of the economy. This argument ignores very fundamental differences between local government in Europe and local government in Westminster tradition countries including the fact that virtually every modern European state is an amalgam of a number of smaller self-governing territories which prior to amalgamation had full responsibility for service delivery within their own territories. In contrast, Westminster tradition countries come from centuries of centralised government.

The closest parallel for what would happen in New Zealand with devolution is the UK. English local government has had major social service delivery responsibilities since the late 19th century. With the rise of the welfare state, and the enormous increase in the cost of social services, English local government’s continuing role was supported by substantial central government funding through what is known as the revenue support grant.

The election of a Conservative government in 2010 demonstrated dramatically how risky this was for local government. Determined to reduce the central government deficit, that government adopted what became an austerity program which included significant cuts in government expenditure. The easiest cut to make, and the most extreme, was funding for local government. Cuts were not accompanied by any reduction in local government’s service delivery obligations. Some councils lost as much as 40% of total revenue and a number have effectively become insolvent.

That’s the risk New Zealand local government would face with devolution - and there is no way devolution from central government would be accompanied by entrenched funding, especially entrenched funding committed to growth to accommodate increased demand and/or cost. There is a further issue which proponents of devolution have not addressed. Devolution might shift formal responsibility from central government to local government but there is no way it could shift political responsibility. Ministers would have a strong incentive to closely monitor and intervene on a regular basis simply because the public would expect this to happen.

Delivering on what we voted for

There is one major difference between the Labour Party’s approach to centralisation and what looked to be the approach inherent in National party policy. The former is clearly ideological; the latter looks to be much more pragmatic in the sense of serving the National party declared interest in efficiency and effectiveness coupled with its clear lack of understanding of the importance of a community voice in decision-making reasons such as strengthening social cohesion, tapping into local knowledge and capability, building a social licence and much more.

There needs to be a strong evidence-based case made to the National led government about the importance of localism, the pivotal role of councils in enabling and supporting strong communities, and the various already well tested means for doing so. The case needs to emphasise, almost certainly contrary to the National party’s understanding of councils and communities, that much of what it wishes to achieve will only be possible with strong community buy-in and localism as discussed in this note is the way to achieve it.

There is an immediate opportunity with the health reforms. Localities planning presents an important and necessary opportunity for improving health outcomes, and the same time reducing the cost of doing so. So far this has been mismanaged by Te Whatu Ora to the frustration of many councils and of people more directly involved in local health services delivery- PHOs, patient advocacy groups, NGOs… in what’s going to be a very different role, this is an opportunity for the incoming Minister of Health to achieve a genuine win-win.