Local government structure added to the reorganisation smorgasbord

The Future for Local Government Review Panel released its final report yesterday, containing key recommendations for central government to consider in shaping the future of local government. Many of the final report recommendations were signalled in their earlier interim report, and you can read our summary of the earlier report here.

The major new recommendation to come out of yesterday’s report is for compulsory reorganisation of local government. Key aspects of the proposed reorganisation are:

• Suggested resource management reform boundaries should act as a starting point for discussions around the new boundaries for local government authorities. This would mean the current 78 local authorities would be reduced to 15.

• Two models of governance are proposed to replace existing council structures. Regions will be able to choose which model they use:
  • Unitary model - one council will have responsibility for all the local government roles and functions within a regional boundary. This will include roles currently carried out by regional councils and city and district councils.
  • Combined network model – consisting of local councils, who retain focus on local delivery and decision-making, and a combined council, which carries out current regional council functions as well as functions appropriate to be dealt with on a whole of region basis.

The review panel proposes four steps on the path to reform, being –

• A steering group to be set up mid-2023, to scope the reform and establish the transition unit.
• A transition unit to be set up early 2024. Its role would include leading the establishment of two proposed new central entities, start broader policy and budget changes, and initiate partnering between local government, central government, and hapū / iwi.
• Two new entities, proposed to be established mid 2024 -
  • a new Crown department, dedicated to the central–local government relationship.
  • a new nationally-coordinated Local Government Stewardship Institution, to replace the existing Local Government Commission. The LGSI would guide the process, including making final determinations where councils and communities are unable to agree on the preferred structure for their region.
• Starting late 2024, the reorganisation itself. The reorganisation is proposed to take place in tranches, and is expected to take 3 to 5 years to complete.

The report has been received by the Minister for Local Government, who will consider  how to progress the report recommendations after the election this year, if Labour remains in power. In the meantime, the Minister has signalled interest in hearing initial views from councils.

You can read the final Future for Local Government report here. If you would like to find out more, please contact one of our Local Government team.