Councils have two fundamental roles — service delivery and representation. The best way to get benefits in service delivery is through the use of shared council undertakings. Councils do this best when they are small. Amalgamation remains the sinkhole which can undermine the potential for reducing costs and improving council services through greater community involvement. It’s time to put aside the blinkers inherited from the 1980s and take a fresh look at what makes local governance work
Opinion — Peter McKinley on Linked In
I guess I shouldn’t really be surprised. It’s become a New Zealand tradition When questions are raised about local government, there is always someone coming out to say the answer is amalgamation – New Zealand has too many councils and we need to start harvesting the benefits of economies of scale.
Yet more evidence of the serious damage done to the chances of lifting the performance of local government by the way the reforms of the 1980s effectively distanced New Zealand from the enormous body of research and practice internationally on the changing role and place of local governance.
The persistence of the interest in amalgamation displays more than just the lack of any input from practice elsewhere. It is also a failure to look at the one serious piece of work on economies of scale in New Zealand local government.
This was a very thorough piece of work by the New Zealand infrastructure commission looking at the costs of three principal activities of councils. It concluded that there was no evidence of economies of scale. Small councils were just as efficient as larger councils.
What’s really disappointing about the persistence with which people within local government itself support amalgamation is this suggests many leaders within local government simply do not understand its role and purpose.
Instead, it looks as though they are deeply embedded within the Roger Douglas understanding of local government as simply an instrument of central government policy with no involvement in governance as such.
It’s worth having a good look at why in so many developed countries the average population of their equivalent of our territorial local authorities is only a fraction of the New Zealand average even when you take Auckland out of the equation.
There is a very simple and very important reason. Elsewhere councils typically understand they have two different and fundamental roles. One is representation and the other service delivery (perhaps directly, perhaps through collective arrangements, franchises or other means; the focus is always on what produces the best outcome for a council’s communities).
Germany is an excellent example. The average population of a German municipality is 8000, this in an economy which is significantly more efficient than New Zealand.
Typically, a German municipality will be a partner in a number of multi-Council companies established to deliver specific services at the scale appropriate for the nature of each service. This produces the efficiencies that come from understanding the scale appropriate to each service whilst still ensuring councils can discharge their fundamental role in representation.
This includes ensuring they have good working relationships with their communities and can properly represent their needs and preferences at different levels of government and with non-government stakeholders.
France provides another example with 35,000 communes at an average population of around 1500 people. The French communes were the driving force in the creation of the major French water companies recognising, as potable water and wastewater management became public health issues, that they simply didn’t have the scale to manage the services themselves.
For them maintaining their independence, and their representative role, was not negotiable so it made perfect sense to find a way of outsourcing service provision.
That the idea of amalgamation still holds such sway in New Zealand reflects a couple of what are really New Zealand specific characteristics. The first is the dominance of business, and business backed think tanks, in much of the debate about the future of local government.
New Zealand lacks the deep think tank culture based on seeking to understand the essence of local governance which is an important feature of public debate in most other developed country jurisdictions.
The second is the lack of any serious university or other academic interest in understanding local governance (there are examples of academics who take an interest in this area but it is individual rather than institutional).
The third is that New Zealand local government has not developed any real capability of working effectively with or understanding its communities. Instead, councils generally still follow the special consultation procedure as outlined in the local government act.
Canadian research more than a decade ago into this type of engagement demonstrated rather than building strong relationships, it tended generally to increase distrust and division.
A number of councils have tried to make this form of consultation more attractive but without changing the fundamental issue which is that it fits within the increasingly discredited “do to” approach to working with communities rather than the “do with” approach (for more background on the difference and why it matters see the Kings Fund backed initiative #DoWith).
To escape from the persistent revisiting of amalgamation as a solution, New Zealand councils need to put much more emphasis on empowering their communities and understanding the benefits which can come from doing so.
There is now good evidence that one of the best ways of reducing costs is to draw on the understanding and initiative of a council’s communities. Typically, if well engaged (this includes ensuring that everyone in the community has the opportunity to be involved), communities can play an important role in fine tuning service standards and identify activities which do not need to be undertaken or can be delayed.
Communities often will also take over responsibility for activities which councils might otherwise be required to undertake.
