Auckland Governance Reforms: Why they were needed and what was delivered

Speech to Nelson City Luncheon Club, Masonic Lodge Hall, Nile St, Nelson; Monday, November 22 2010.

Good morning and thank you for inviting me to join you here today in sunny Nelson.

Today I am going to speak to you about an unprecedented event in New Zealand - the amalgamation of eight sizeable councils to create one single organisation - the new Auckland Council.  I want to talk about why were these government reforms needed and what they delivered.

A country's international competitiveness increasingly relies on the competitiveness of its major cities.  Cities have to attract businesses and investment which in turn support innovation, growth and the specialised skill sets that underpin the export of goods and services.

Cities must also offer an attractive lifestyle, not only to attract the skilled international workers we need, but also to ensure talented Kiwis choose to stay here and drive our economy.

The future success of New Zealand - its economy, its people, and its international reputation - are dependent on the success of Auckland - more so than ever before.

Auckland is a great city, with a wealth of natural beauty and cultural diversity.  Of 420 cities, the annual Mercer Quality of Living Survey ranks Auckland as the fourth most liveable city in the world.

Although the city has such a high liveability ranking, it only managed to place 43rd in infrastructure and 84th in standard of living.  There is room for great improvement.

For more than 50 years, Auckland's ability to develop and prosper has been hindered by duplicated services, competing leadership, complex and fragmented decision-making processes, factionalism and weak accountability.

The fragmented governance structure created a world of bureaucratic red tape, impacting adversely on business and Auckland's diverse communities. 

Auckland lacked a vision which united the whole region and brought out the best from it. 

Auckland's future depended on the Government making critical decisions about Auckland's regional governance.

These significant problems needed to be addressed. 

The Royal Commission spent 18 months considering what was wrong with Auckland governance, and how to fix it.

It received a large number of submissions from Aucklanders, which expressed frustration over the sheer amount of regulatory red tape, and the cost of complying with different district plans across the region.  Aucklanders also complained of poor services and high costs.

The Commission's report boiled down to two key points: the system of governance was weak and fragmented, and its structure resulted in poor engagement between local authorities and communities.

The eight councils lacked a collective sense of purpose and did not have the constitutional ability required to effectively address issues for the wellbeing of greater Auckland.  Indecisiveness and feudal bickering stymied the city's development.

The Commission laid out the challenge - to address the inefficiencies, to ensure effective service delivery through a united governance structure, to address the poor history of Auckland's infrastructure development and to have greater community involvement.

This was an enormous challenge, and was only possible thanks to the hard work and good will of council staff who put the interests of Auckland at the forefront.

I am very proud of what has been accomplished.  The government delivered - on time and under budget.

A legislative framework has been created which will deliver integrated decision-making and greater community involvement. 

As a unitary authority, the Council will now be able to make critical regional decisions to move Auckland forward and foster common regional identity and purpose.  The Council will streamline operations and reduce bureaucracy, through consistently delivered policies, simplified paper work and improved customer service across the region.  I will give you some examples.

We have delivered a unified Auckland governance structure.  Previously, there were nine local transport entities; eight long term plans had to be prepared; five water and wastewater companies operated; and seven district plans existed.  Now we have just one of each.

We have delivered a more efficient organisational structure.  Staffing has been reduced by 13 per cent.  This will save ratepayers $66.5 million in annual salaries.  This will increase to $91 million a year by the end of the transition period, 1 July 2012.

These savings may be passed on to the ratepayers through lowered rates.  Although the final decision rests with the Council, the ATA has projected a rates increase of 3.9 per cent for the 2011 to 2012 rating period.  This is 2.1 per cent lower than the six per cent weighted average increase projection by the old councils. 

We delivered lower fees and charges.  For example, fees for building inspections have been standardised to the lowest level across the region.  The hourly call-out fee for a building inspection, which was as high as $178, will now be $110.

More than 850 resource consent forms have been streamlined to around 120 across Auckland, and are now available online. The consent application will be the same Auckland-wide. 

Under the old councils there were 60 different categories of dog licence.  This has been halved and fees have been standardised at the lowest level (excluding Franklin - which was largely rural).  For example: fees in the most common registration category which previously ranged from $70 to $100 across Auckland will now be $70.

What does this mean and why does this matter?

These changes will result in a strengthened and integrated governance structure for Auckland.  No more endless disagreements about the location and funding of regional amenities, and the provision of necessary infrastructure.  Auckland's traffic problems will now be dealt with by a single body, and crucially, there will be no more costly duplication of functions with eight rating authorities and a multitude of differing bylaws.

When Auckland needs to act as one, it will be able to. 

Where the impact of a decision extends beyond a single local board area, or the benefits are regional, decisions will be made by the Auckland Council's central governing body.

The governance framework provides that there are two decision-making groups in the new Council - the governing body, made up of the mayor and councillors, and local boards.  The local boards have specific decision-making responsibilities in their own right as well as responsibilities that may be delegated to them by the governing body.

The Auckland Mayor, His Worship Len Brown, will articulate and promote a vision for Auckland and provide leadership for the purpose of achieving that vision.  The Mayor will lead the development of Council plans, policies and budgets, and ensure there is effective engagement between the Auckland Council and the people of Auckland. 

Local boards will make decisions on local issues, activities and facilities and will work with the governing body to ensure that community interests are well represented in regional decision making.  The local boards are a completely new entity for local government in New Zealand and have far more extensive powers than the former community boards.

Local boards are responsible for promoting the well-being of their communities.  They can do this by considering the content of strategies, policies, plans and by-laws that impact on their communities.  The new Council must listen to their preferences on funding and how that is allocated in local board areas.

These arrangements will result in a more integrated and effective governance system for Auckland as one Council identifies and responds to the needs of the greater Auckland region, whilst local boards respond to the specific needs of their respective communities. 

I have been asked a number of times about the implications of the Auckland reforms for local governance in other parts of the country.  Let me be clear that the Auckland governance reforms were the Government's specific response to a unique set of circumstances, necessary because of long-standing and seemingly intractable problems with Auckland. 

Aspects of the Auckland reforms will have implications for local and central government.

We need to think through what those implications are likely to be, and what aspects of the Auckland reforms could be useful for local government elsewhere in New Zealand.

That objective is part of my current priority in the portfolio.  My plan is to fundamentally review New Zealand's system of local government: its purpose, structure, functions, status, and relationships with central government and with communities, citizens and ratepayers.

Let me give you some background on why it's important to do this now.  Since the colony of New Zealand was founded in 1840, our local government system has experienced considerable change. In the late 19th century, a provincial government or regional government structure was superseded by an increasingly fragmented arrangement of many general purpose and single purpose local authorities.

After World War Two the system developed into a consolidated arrangement of fewer local authorities, of varying sizes, carrying out a wider range of functions.  Since 1989, successive reforms have modernised aspects of the system, most recently with the unified governance structure for Auckland.  

Despite these changes, there are significant legacy elements - for example, longstanding council boundaries that may or may not reflect current and future communities. In the past, councils could focus on parochial affairs.  Now, local government politicians and officials, and the communities they represent, must grapple with large and complex challenges which span jurisdictions, such as shifts in economic production and demography, climate change, and the impacts of global economic developments.

Given these factors, it is timely to consider whether the local government system as a whole is fit for purpose in the 21st century, or if it needs to be modernised to reflect changing circumstances and future challenges. The review provides an opportunity to ask some fundamental and future-focused questions:

• What is, and what should be, the purpose of local government in New Zealand?
• What does local government require, in terms of structures, powers, funding, practices, expertise and protections, to fulfil its purpose?
• What should be the relationship between local government and central government, and what mechanisms should underpin that relationship?
• What can we learn from other models of local government (theoretical and real world)?
• Are there more effective ways of constituting and organising the local government system?

The first milestone for this project is the release of a discussion document in mid 2011. The discussion document will set out strategic issues about local government in New Zealand.

It will put forward questions - not answers - to spark a debate among all New Zealanders about "where to" for local government. 

Right now, we're scoping the parameters of the project: its objectives, guiding principles, and prioritised issues for further analysis.  In December of this year, I'll be taking a paper to Cabinet outlining the project's parameters and in 2011 we'll develop that analysis into the discussion document. 

The discussion document, and the responses that we get from New Zealanders, will provide the incoming Government after the 2011 general election with a basis for further analysis and / or the development of policy options.

I have no preconceptions about the outcomes of the project.  We may conclude that no changes are needed.  We may find that the system could be improved through minor adjustments. Or we may determine that significant reform is needed. 

I'm excited about beginning this project, and about having the opportunity to truly better our system of local government.  I welcome your input and views on our local government system as this work progresses.

I am hugely excited for the future of Auckland.  With the new governance structure in place, we are now on the verge of turning around its fortunes, making it a united, prosperous and dynamic region that all New Zealanders can be proud of.

It is my expectation that Auckland will grow in stature and efficiency to become a truly international city. It lays a solid democratic foundation which will boost our regional growth and prosperity for generations to come.

I am happy to take any questions that you may have.

ENDS