[As published in May/June BayBuzz magazine.]

Within Hawke’s Bay’s five councils, the dirtiest word one can utter is ‘amalgamation’. 

That’s particularly true of elected councillors; rumour has it that at least some council senior staff, operating in the trenches, feel otherwise. 

In any event, a number of forces are at work that might put amalgamation back into play for Hawke’s Bay, whose voters roundly defeated the proposition ten years ago. 

Let’s take a look at the new political landscape and the forces at work. 

Central government ‘regionalisation’ 

The current Government has several initiatives underway that are pressing local councils to unify, not just in spirit, but structurally. Or that will curtail some key current responsibilities of local councils. 

Most obvious is the expressed preference of the Government for councils to regionalize their approach to delivery of water services – drinking water, stormwater and waste water. 

Local water done well 

In simplest terms, to relieve current borrowing constraints on councils and capture economies of scale in service delivery, the ‘preferred’ option of the Government under its ‘Local Water Done Well’ framework is to see councils agree to create a new regional entity that would charge for and deliver water services, taking this function off the back (and balance sheets) of our local territorial authorities. 

Our councils have until September to declare their course of action. 

Each of Hawke’s Bay’s councils – Hastings, Napier and CHB – has signaled their preference to ‘go regional’.

This is a huge set of operating responsibilities to take away from local councils, although they will still be involved in governance of the new regional entity. 

RMA reform 

Then there’s RMA (Resource Management Act) reform, another cornerstone overhaul undertaken by the Government. As presently signaled in Cabinet papers and public discussion, the Government proposes to ‘simplify’, reduce and/or remove a significant number of local government activities related to consenting and environmental management. 

For example, water quality standards would be set centrally rather than by the Regional Council and under consideration is creation of a national agency to monitor and enforce environmental rules. Obviously, this would remove a key function and budget requirement of the Regional Council. As a recent Cabinet paper on RMA reform observes: 

“This, combined with other system changes (ie, national standards and zones), would involve a reduction in the role of local government, which if progressed would have wider implications for the structure of local government in New Zealand … 

“We recommend the Minister of Local Government and the Minister Responsible for RMA Reform come back to Cabinet later this year, if needed, with details of potential local government reform as a result of these changes to the resource management system … 

“The new legislation will include provisions relating to the roles, responsibilities, and processes of local government, including proposals that will differ from the status quo under the RMA for some matters. However, resource management reform will not be the primary vehicle for local government reform. Further advice will be developed on the interaction between resource management and local government reform.” 

Under the new RMA legislation, consenting around building and housing would also be reduced, both through national standardization of the relevant rules (e.g. building height limits) and sharply limiting the instances where private property development would require council approval. As the ‘property rights first’ Cabinet paper puts it: “…land use effects that are borne solely by the party undertaking the activity would not be controlled.” 

Overall local planning would be unified and simplified, with councils mandated to collaborate in creating one regional master plan, containing ‘chapters’ – one on spatial planning and one on natural resource use. This chart indicates how this all is supposed to fit together.

These again are activities that consume significant council resources. A Regulatory Impact Statement evaluating the proposed changes estimates savings of $14.8 billion in administrative and compliance costs over 30 years. Some of this of course being charges that would normally fund the councils’ consenting staff and processes. According to the Statement, this would be a 45% improvement in administrative and compliance costs when compared to the current Resource Management System.

Regional deals

At the same time, the Government is holding out the ‘carrot’ of “Regional Deals”. In this scheme, if councils come forward with regional plans for housing and other infrastructure investment, the Government proposes to combine the relevant existing central government funding pots, give funding certainty for longer periods, ensure the coordination of the relevant central agencies, and give the local authorities more flexibility as to how to actually spend the funds to meet their objectives. 

Here is how Infrastructure Minister Chris Bishop enthuses about ‘Regional Deals’:

“Those are long-lived partnerships between central government and local government, setting out a plan for a region over 10, 20, 30 years, saying: ‘Righto, as a region, you’ve got these priorities; as a central government, we’ve got these priorities; let’s get some agreement on what those are, let’s get some funding structures in place, let’s map out the region, spatially plan the region – particularly around housing and major transport, major industry and things like that – and let’s get the funding structures in place to make sure we can go ahead with that. And that is extremely popular with local government.”

So far, the Government has been adamant that this approach doesn’t translate into additional funding. As PM Luxon cautioned Local Government NZ last year: “I’m sure that will be very popular among councillors, who want to spend money without raising rates to pay for it. But if any of you think those will be the terms of a regional deal, it’s time to come back to reality.”

But, still, a strong incentive for local councils to act regionally. And HB’s councils have done just that, having submitted their proposal earlier this year for a Hawke’s Bay Regional Deal (contents confidential under Government edict).

Finally, while these major initiatives are in play, the Government has made other noises about limiting the scope of local council activity. Ministers have commented, for example, on capping overall local rates levels and legislatively directing councils to focus only on ‘core’ activities. 

Here’s Minister Simeon Brown introducing his local government reform legislation, which includes removing the so-called ‘four well-beings’ (social, economic, environmental, and cultural) in the current Local Government Act: “Evidence shows that including the four well-beings in the Act led to about two per cent higher rates growth each year. Removing them sends a clear message that councils must focus on roads, rubbish, and reliable infrastructure.”

And back to PM Luxon: “We do want to work closer together – and there will be new revenue tools for councils, where that makes sense – but the days of handouts are over …

“Yes, councils need adequate revenue to fund core responsibilities like roads, rubbish and water, but the value-for-money proposition is more questionable in a range of other areas … Councils need to examine those areas more closely, and I’m up for any tool – like revenue capping – that makes them do so.”

Does this sound like a Government keen to see 78 local and regional councils perpetuated in New Zealand?

Local experience

In the meantime, here in the Bay, band-aid efforts to regionalise our council efforts in various critical areas have been mostly floundering.

Cyclone Gabrielle triggered a deluge of criticism and reform recommendations regarding our emergency preparedness and management capabilities. Even getting mayors to officially declare an emergency was a bureaucratic ordeal. Now we have a freshly energized HBCDEM overseeing plans for more effective planning and coordination. 

Related, we’ve had a Joint Committee developing a coastal hazards strategy for over a decade. Excellent technical work has been done. But although a sensible funding structure developed by an outside advisor has been signed off in principle (with HBRC collecting from ratepayers), agreement is yet to be officially consulted on, approved and implemented.

We’ve had a regional Climate Action Joint Committee for several years, whose charter is to develop a regional strategy for mitigating and/or adapting to climate change. But in recent months, both the Napier City Council and the Wairoa Council have announced they are pulling out, each discontented over lack of output from the joint exercise. The five councils have now quietly agreed to do a stocktake on this venture after this year’s local elections.

Our new Regional Economic Development Agency (REDA) lasted barely two years before its Board and CEO resigned in April. A Review of Regional Structures Report declared that a different approach to the region’s economic growth needed to be taken. The new approach is a “refreshed delivery entity” (still called REDA) with a new team to be installed by next April. Its mandate: “… includes advocacy, convening, policy/analytical and commissioning capability as well as senior-level expertise with regional mana, able to bring a focus to regional needs across economic and social strategy and the ability to engage effectively with decision-makers (in particular central Government).”

Exactly what would be expected of a decent unitary regional authority. But alas, Hawke’s Bay soldiers on with five councils instead.

Loosely bound together by the Matariki Governance Group (MGG).

The MGG

The MGG is what passes for regional governance in Hawke’s Bay. It consists of the region’s mayors, HBRC chair and a collection of Māori leaders (NKII and six Post Settlement Governance Entities).

It’s bound by no rules – open meetings and Official Information Act requirements don’t apply. It hasn’t had a website in years. It’s unclear who votes, whether minutes of its meetings are recorded anywhere, or even how the agenda is set. In short, a shambles.

But all that notwithstanding, the MGG makes many of the region’s most important decisions … like what funding priorities our region should beg the Government for and what our economic development objectives should be.

The Review of Regional Structures Report presented nine bullet points of criticism of the MGG. Here are the first two:

• Outside of MGG members, there is limited understanding of MGG’s role and/or value. This is due to MGG flying largely under the radar due to shifting focus from changes in policy and government settings, responding to COVID and Cyclone Gabrielle, and continuing to navigate without an agreed Programme of Action. MGG has evolved in a piecemeal fashion and could be better configured to support both strategic leadership and delivery. 

• Strategic leadership or thinking needs to be strengthened, including having capabilities in place to plan and monitor activities in the context of regional priorities. This includes the ability to lead and/or pivot on priorities as or when new opportunities arise, particularly due to changing central Government policy or funding opportunities.

The other seven bullets summarise functional shortcomings that should be painfully embarrassing to all of the principals involved. 

In an online article I wrote in April (Who really runs Hawke’s Bay?) commenting on the Review Report, I referred to MGG as the “biggest structural failure of all”. I asked the current co-chair Mayor Alex Walker to comment. She wrote:

“It was very important to me that we use this opportunity to step-change the structures and processes for MGG itself. In fact the recommendations and actions from the review, for the members of MGG are the most important to get right if we are going to sustain joined-up regional leadership on our vision for the future and our strategy for achieving it. Matariki and MGG have evolved since 2016 and 2018 when they first stood up and our context has also changed. Our whakapapa has been grounded in voluntary collaboration and a unique approach to economic development which has given some great achievements in some areas, but it has to work more efficiently than that now, and with greater focus and accountability.”

I treat that as a promise from one mayor to rectify about nine years of fundamental accountability and transparency failures.

So, we’ll keep watch. But even if the MGG shapes up, it’s still just an interim band-aid – an imperfect embryonic attempt to fashion regional consensus and identify regional challenges and priorities.

Where next?

Although discussions of amalgamation often focus on possible financial cost savings, those, while significant and achievable – and hopefully appealing to ratepayers – are just the tip of the iceberg. Arguably the bigger cost is wasted time and energy.

Time wasted trying to schedule and secure attendance for the meetings of all these joint committees and other collaborative exercises (like the Future Development Strategy). Months of back and forth merely to agree on ‘terms of reference’. More time to report back to councils (who actually retain the authority to act). Negotiating agreement (i.e., horse trading) on controversial aspects. Taking those back again to the relevant councils for endorsement. And on and on.

And then there are the ongoing turf and funding disputes … Who’s in charge of that waterway mess? Should or shouldn’t we build homes in that flood plain? Who’s paying how much for tourism, for coastal protection works, for a regional economic development agency? And on and on.

Ratepayers can’t have it both ways. On the one hand complaining about the soaring cost of local government. But on the other hand, happy to underwrite the expense of five councils with 54 elected representatives.

It’s time to give amalgamation a re-think. And no better time than during the upcoming local election season.

It will be interesting to see if any candidates are willing to stand for any of our five councils with a commitment to challenge the status quo. For example: “If elected I will support creation of a citizens commission to examine the benefits and form of HB amalgamation.” Most will default to selling us the “we promise better collaboration” Kool-aid.

Democracy will give us what we deserve.