[As published in March/April BayBuzz magazine.]

In February the Government concluded consultation on its ‘Simplifying Local Government’ proposals. Judging from the Hawke’s Bay councils’ submissions, the push back has been strong.

Essentially the Government is clearly nudging councils toward consolidation, with territorial authority mayors functioning as a collective (Combined Territories Board – CTBs) and picking up responsibility for what have been regional council duties as well. The consultation process surfaced critical issues such as voting control, role (if any) of appointed Commissioners, and Māori participation.

Each of our five Hawke’s Bay’s councils submitted views, with CHBDC choosing simply to co-sign-on a brief joint submission with HDC, NCC and HBRC; those three filing their own more detailed separate submissions; and Wairoa (WDC) making the most remarkable submission of all, noting:

“Wairoa District Council considers it essential to lodge a submission distinct from those of other Hawke’s Bay councils. A single regional position would risk masking material differences in scale, need, and impact. Reform outcomes must be genuinely local, equitable, and effective—not merely administratively convenient.”

The word ‘distinct’ doesn’t remotely capture the profound difference in orientation of the Wairoa Council, so I will summarise that submission first. If you were to read one, this is the most stimulating! 

Wairoa – a lone ranger?

WDC does make the mandatory nod to regional collaboration: “Wairoa District Council shares the commitment of all Hawke’s Bay Councils to work together using mechanisms such as shared services, joint committees, and collaborations to ensure that services in Wairoa district are delivered effectively and efficiently.”

But WDC’s core proposition is to devolve heaps of operational responsibility to the local council – to better reflect land use, hazard profile, transport and urgent, informed response realities – along with commensurate supplementary funding ($2.7 million annually is suggested, extracted from HBRC assets) over and above the district’s natural rate base to ensure appropriate capacity.

The WDC proposal would: “Focus regional-scale arrangements on setting environmental limits, policy direction, data collection, and monitoring, rather than exercising operational decision-making authority over place-specific matters.” And …

“Transfer responsibility for operational, time-critical, place-based functions – such as catchment management, river control, gravel extraction, river mouth management, and pest and weed control – to territorial authorities, where impacts are local and accountability can be clearly assigned.”

Essentially, WDC argues (in my words): “We’re better off caring for our own on-the-ground needs if we are fairly funded to do so. You regional folks just set the standards and monitor our performance.’

Is a tiny council serving a massive catchment capable of this? WDC responds to that $2.7m question: 

“Assertions that smaller councils lack the capability to deliver operational land and river management overlook a basic point: capability follows function and funding. Where functions are clearly defined, properly funded, and supported by national standards and regional monitoring, territorial authorities can build and retain the necessary expertise. Removing functions because capability has been hollowed out by past centralisation risks creating a self-fulfilling failure.”

WDC proposes an entirely different regional funding approach:

“Population based funding and governance models do not reflect the true cost drivers in districts like Wairoa. The costs of rural road networks, water infrastructure, river control, and resilience scale with land area under production, water dependency, and freight intensity, not simply with resident population. Without a land and water-based component in funding formulas, high production rural districts will continue to be structurally underfunded, risking deferred maintenance, slower recovery after severe weather, and avoidable losses to national export value.”

Moreover, WDC observes that the district might actually have more practical collaborative opportunities with Gisborne.

Thought provoking! 

Elsewhere, broad agreement

The other councils accept there is a problem that needs addressing, but state the issue more conventionally.

HDC says: “We agree the current system can be complex, difficult for communities to navigate, and may not always support effective regional decision-making. We recognise that cost pressures on households and ratepayers are real, and councils must strive to consistently deliver better value prioritised outcomes from limited public funding.”

Our councils also warn of the sheer volume of proposed change now on the table, posing timing, capacity, and potential inconsistency issues. 

Says HDC: “…structural reform is occurring alongside multiple other significant reform processes, including replacement of the resource management system, proposed constraints on rates growth, changes to emergency management arrangements, and reforms to water services delivery. 

“Treating these reforms as discrete initiatives risks undermining their collective effectiveness. Council supports the view that structural reform, regulatory reform, and funding and financing settings should be treated as a coherent change programme, with realistic sequencing and explicit capacity-building support.

NCC echoes: “These reforms must be treated as a coherent programme to avoid misalignment and inefficiencies. The interaction between local government simplification and other reforms, including resource management, development levies, emergency management, water services, and rates-capping requires careful consideration.”

And also notes: “Enduring reform of this scale will require a clear, shared understanding of the case for change and confidence that the proposed direction will be sustained over time (i.e., supported by cross-party and central-local consensus).”

So far, there’s been no indication of how a potential Labour-led Government might view this multi-faceted ‘reform’ pathway.

Local-led 

The Government proposal floats the prospect of appointed Crown Commissioners serving on the CTBs, possibly as voting members or even having veto power. 

Our councils are firmly opposed to that, but accept there might be value in non-voting or advisory roles. They use language like time-limited, clearly-defined, support role, observer status.

NCC also objects to the proposed approach of Ministerial approval of Regional Reorg Plans (RRPs) without recourse, arguing: “Reforms of this scale and potential permanence should be supported by strong local engagement and clear democratic legitimacy. We consider that approval of the RRPs solely by the Minister, without any form of binding local endorsement or independent appeal mechanism, risks undermining public trust in reforms of this scale.”

That said, ultimately the question will arise of what sort of RRP will receive Government approval?

Napier wants legislated detail, offering these criteria:

• Sustainable services: Does the plan demonstrate improvements in service effectiveness, resilience, and affordability? (The proposed criterion ‘better services’ does not capture resilience.)

• Environmental integrity: Does the plan include protection or enhancement of environmental outcomes and regulatory capability? (Not currently included in the proposed criteria.)

• Risk resilience: Does the plan include maintenance and strengthening of emergency management, flood protection, coastal erosion, climate change adaptation, and natural hazards capacity? (Not currently included)

• Meaningful engagement: Does the plan contain clear evidence of meaningful community and mana whenua participation? (Participation not explicitly included in the proposed criteria.)

• Operational continuity: Does the plan maintain or strengthen capability without the loss of operational effectiveness? (Especially in the areas of flood and coastal hazard functions, regulatory compliance, and emergency management.)

Caution about costs and savings

Our councils express caution about delivering cost savings from reorganisation, as well as concern about the actual cost of developing and implementing a RRP.

HDC notes that the process “will be time- and resource-intensive, occurring alongside other major reform programmes. These costs will arise at the same time as proposals to constrain rates growth. Without explicit recognition of these costs, guidance on scope, and funding or resourcing support, councils risk being placed in an untenable position. They are expected to deliver complex reform while simultaneously constrained in their ability to resource it.”

NCC agrees: “There is a material risk that the combined effect of rate-setting constraints and reform-driven transition costs will reduce councils’ ability to invest in resilience and recovery at the very time such investment is most needed. If councils are expected to operate within tighter funding limits, it is critical that reorganisation does not transfer additional costs or unfunded obligations to local government.”

As for achieving cost savings from reorganisation, HDC asserts: “Evidence from previous local government reforms in New Zealand and comparable jurisdictions shows that structural change alone may not reliably deliver sustained cost reductions, particularly where reforms seek to retain democratic legitimacy and community voice … Transitional costs, service harmonisation, and capability uplift frequently offset anticipated efficiencies.” 

My own view has been that the major contributions of structural reorganisation will be: policy and administrative consistency, best practice adoption, vastly improved prioritisation of spending, hugely faster decision-making, lowering the ‘transaction costs’ of doing business with council – improvements that don’t necessarily show up on the council balance sheet but yield valuable benefit (including financial) to those who must ‘do business’ at any level with council bureaucracies. 

Worries about voting

As dramatically posed by Wairoa, the ultimate question for politicians contemplating consolidation is how voting power is distributed. 

Some worry that in a region such as Hawke’s Bay, where larger councils share aligned urban growth, infrastructure and investment priorities, the CTB model will predictably marginalise smaller rural districts. 

A one-mayor-one-vote model ignores scale, revenue contribution, land area, and production intensity; and a population-weighted model entrenches metropolitan dominance. 

Not surprisingly, HDC and NCC favour some form of ‘weighted’ population-based voting, to be devised by the independent Local Government Commission, that takes in special needs and communities of interest. Which ratepayers actually pay the bill is top of mind, but as Wairoa argues, other realities deserve recognition.

Says NCC: “For coastal and hazard-exposed communities such as Napier, decisions taken upstream or inland can have downstream consequences. Voting arrangements must therefore recognise not only population, but exposure to risk and the distribution of impacts across the region.”

It is “important that voting arrangements recognise the scale and complexity of functions operating within Napier and Hastings, while also ensuring smaller districts retain an effective voice. We consider that double-majority voting or an equivalent should be explicitly required for decisions with significant impacts (whether these be financial, environmental or otherwise). This could include decisions on regional budgets and levies, major regulatory settings, and Regional Reorganisation Plans (RRPs). Such an approach would help ensure regional decision-making does not default to a “largest centre decides” model.”

Transparency is an issue as well. NCC expresses “concerns that the proposal does not clearly articulate how communities will hold CTBs to account for regional regulatory and funding decisions that have long-term impacts, particularly where those decisions are made collectively by mayors rather than by a separately elected body. We recommend statutory requirements for open meetings, public agendas and transparent voting records.”

Amen to that!

Māori participation

All of the submissions voice reassuring support for full Māori engagement in both the reorg process itself and then in any governance structure implemented.

NCC’s comments reflect the shared view. “We consider the proposal does not provide sufficient clarity on how Te Tiriti partnership and mana whenua participation will be embedded into new governance arrangements without any dilution of existing commitments and obligations. This includes honouring any current arrangements where mana whenua are at the decision-making table (e.g. on Hawke’s Bay Regional Council’s Regional Planning Committee).”

Getting underway

Finally, councils are concerned about the transition process. Clarity is required on the mandate of existing councils throughout any transition to ensure continuity of statutory functions, infrastructure delivery and financial decision-making.

HB councils must each launch their next, still separate LTP processes later this year, with far reaching consequences, for example, around natural hazards, flood protection, and infrastructure. At the same time other Government reform timetables – e.g., a requirement for regional spatial plans – do not align with feasible reorganisation schedules.

Nevertheless, our councils’ group submission says: “We are ready to start planning for a new future … as a forum we are moving to start the development of a Hawke’s Bay Reorganisation Plan ahead of Government’s proposed timetable. We believe there is value in developing options for Hawke’s Bay early. This will help remove uncertainty for communities.” 

And to drive the “HB-led” process they start from the premise of a CTB Board including representation from regional council governance to complement the skills and knowledge of the region’s mayors, as well as two independent members including a facilitator. 

One supposes this would become a problem and priority for HB’s new ‘Interim Regional Office’ to manage, including provision for all the necessary ratepayer and stakeholder engagement.

But what about Wairoa?

Stay tuned!