Society of Local Government Managers

  • Tony Ryall
State Services

Good morning. Last week I sent an email to the General Manager of Environment BOP seeking some help with a constituent worried about a river shingle operation which is causing erosion of his river bank. I began the email with: ?Don?t worry Jeff, I don?t expect to be the Minister of Local Government next week?.

Well, I am. And I expect my constituent will have his river bank erosion fixed somewhat earlier than originally expected!

In this my 25th hour in the job, may I begin by acknowledging the work of my predecessor Maurice Williamson. I respect the work he has done and is doing to make the roading dollar go further.

Local Government is an important part of our economy. It?s 3.5% of our country?s GDP. Local Government can either help the economy or it can hinder.

With the problems of Asia bearing down on us, every part of the economy has a role to play in helping our nation weather the storm. Local Government must contribute to the international competitiveness of New Zealand exporters through good infrastructure, efficient regulation, and control over costs.

Like most Members of Parliament, I carry a grab bag of prejudices and views about local government; shaped from eight years of dealing with local authorities in my own region.

It seems to me that the Bay of Plenty region is a microcosm of the challenges facing local governments in New Zealand today.

Sustained economic growth in the Western Bay of Plenty sees demand for a considerable investment in infrastructure and other services, which in many cases are already under extreme pressure.

This economic growth has built a base to finance that investment, but there are barriers in terms of planning and funding structures.

In other parts of the Bay, low growth rural areas face a severe dilemma between meeting the costs of providing current or expanded services, with a limited economic base from which to finance them.

The answer to this dilemma is not clear cut. Fewer services are likely, but there are limits to what the community will accept. Many obvious efficiencies have already been taken. Amalgamations may bring some benefits, but as I will comment later this is no panacea.

I know these challenges face many of your local authorities. We need to think about them. We in the Government want to listen to your views.

And that is why I am happy to endorse the approaching launch of the Foresight Local Government 2010 project. The development of this project by central Government with Local Government New Zealand and your own society has broken new ground.

The aim is to stimulate thinking about the future of local government by providing three scenarios for the future of New Zealand in 2010. It is part of a broader project launched by the Prime Minister and Mr Williamson in December last year to develop knowledge of New Zealand's future prosperity.

The Foresight Project is not central planning, it is a process for thinking about the future, and I hope that the members of your society will take up the opportunity to make submissions.

Local government management, as I am sure you would agree, has come quite some distance in recent years. In some respects it can be argued that it has had to -- that changes in local government legislation have forced a greater level of professionalism and an emphasis on managerial excellence.

This is most graphically illustrated by Section 119 of the Local Government Act which places a clear statutory responsibility on each and every local government Chief Executive "to ensure the effective, efficient and economic management of the activities and planning of [their] local authority".

In this context the Government has no lesser expectations of you as senior local government managers than it does of its own bureaucracy. As advisers to our local government politicians you are expected to think critically about the future role and functions of local government, and particularly about those of your own council

You also have a key responsibility to ensure that your elected members are fully aware of the range of options available to them as decision makers - and what the actual implications of those decisions are on the various sectors that make up your communities.

In more recent years the Government's ongoing determination to ensure continuous improvement in the standard of local government is perhaps most clearly demonstrated through the enactment of the Local Government Amendment No. 3 Act 1996.

The Act, which came into effect for all local authorities on 1 July this year, is intended to promote prudent, sensible financial management and enhanced accountability.

I firmly believe that the Act will significantly improve local government in this country and I have every confidence that it is going to do just that.

Because of a particular situation in my district, I spent quite some time understanding the No3 Act when I was Chairman of Parliament?s Finance Committee. As with any ground breaking legislation, there are some problems. You shouldn?t have to rate to replace an asset your community doesn?t want to replace. Similarly, funding depreciation of the roading network also needs clarifying.

We need to tidy up some of the wording in the Act. You shouldn?t have to rely on the Auditor-General?s opinions to interpret the legislation. You and I will have to talk about how we better monitor compliance with No3.

But lets not kid ourselves that legislation alone can bring about the desired results, or that enhanced management and governance will be achieved overnight. The success of the No 3 Act, as with any piece of Local Government legislation, will, in large part, depend on the actions and attitudes of this Society, and in particular, its individual members.

Mr President, I would like to update you on the Local Government Work programme.

Work on the ARST legislation, which has consumed a not inconsiderable amount of Mr Williamson?s time and energy, was thankfully concluded on 31 July with the enactment of the Local Government Amendment No. 6 Act. As of 1 October this year, the ARST will be replaced with a new entity bearing the name Infrastructure Auckland.

Infrastructure Auckland will be accountable to Aucklanders by way of an annual consultative procedure, and through an electoral college of local authority representatives. The college will have the responsibility for the appointment of Infrastructure Auckland members. I am meeting with Auckland local authorities shortly to finalise the Infrastructure Auckland Deed which I expect to sign off before the end of next month.

The Water and Wastewater Review has also seen some progress over the last couple of months. The scoping work has largely been completed between the three main interested government agencies and a paper should be before the full Cabinet soon, seeking decisions on terms of reference and a timetable.

Many of you will by now have seen the results of the Department of Internal Affairs' Survey of Local Authorities Water & Wastewater which was released last month. If you have not, I would recommend that you have a look at it.

The survey reveals a number of interesting issues. These include:

the substantial costs faced by councils from deferred maintenance, or arising from the need to upgrade or extent existing systems
the perceived importance of customer protection and consumer satisfaction
a growing interest in corporatisation
concerns about the capabilities of the small councils to achieve greater efficiency and effectiveness
an increased interest in metering
and above all, an overwhelming desire to see increased flexibility in the way that local authorities set their charges
I would expect the Water & Wastewater Review to examine all these matters and others. It will be extensive.

What will also be extensive is the consultation. The Government will encourage, listen - and no doubt debate - the views of local government and the wider community. I expect there will be several rounds of consultation before any conclusion is reached.

The scope and timetable for the Review of local authority funding powers is also nearing completion.

At this stage there is agreement amongst affected Ministers that the review should certainly cover Crown rating exemptions and important Maori land rating issues. In my own district, some 50% of land is affected by these two issues. I know it?s even higher in some other places.

The No3 Act also demands new approaches to raising income and recovering costs. We do need to balance the rating powers between territorial authorities.

I am aware that this review is a top priority of SOLGM which has already completed considerable work in preparation for the review.

I spoke earlier about the Bay of Plenty as a microcosm of the rest of the country. Back home there?s a lot of talk about changes in local government. As there is in many other parts of the nation.

Many people see amalgamation as the next step towards a more efficient system of local government. In some cases it may be.

But it strikes me that amalgamation is about putting structure before strategy.

And a strategy that offers opportunity for lower rates is the separation of governance and service delivery. Local governments can improve efficiency and control costs through the economies of scale which come from working together across boundaries.

The sharing of capabilities, the enhancement of skills and the saving of duplication can achieve real benefits for communities. Governance then becomes secondary, something which flows from the provision of essential services, rather than the lawmakers? pen.

In local government, one size does not fit all. And we should be willing to take the next round of efficiency gains through a renewed focus on service delivery.

Mr President, thank you for the opportunity to speak with you. Local Government is important. It does matter to our nation?s future. I am rapt to be part of that.