Be careful how you use them.

The Department of Internal Affairs (DIA) released its local council report cards last month, with the aim of giving ratepayers a clearer understanding of local finances – rates, debt, expenses, staffing and more.

These ‘Council Profiles’ are now available on the DIA website. Here is one summary table comparing all NZ councils in similar ‘size’ buckets.

This information has always been available in councils’ Annual Plans, Annual Reports and Long-Term Plans. The good news is that these Profiles compile this mass of largely financial information using consistent terminology and methodology and package it in one place. A useful resource presenting key data on each council, authoritatively, for media and diligent ratepayers.

For that reason, we are linking below to each of HB’s five council report cards. If you decide to ‘have at’ or ‘fact check’ a council candidate, at least you’ll have accurate information.

HBRC

HDC

NCC

CHBDC

WDC

The bad news is that the report cards will be prone to misuse – specifically when it comes to comparing councils ‘performance’ against one another, which is what the Government is touting.

Releasing the Profiles, Local Government Minister Simon Watts commented: “When ratepayers know more about how their council is performing and where their money is going, they can engage more effectively and ask the tough questions. For instance, communities can now compare how much their council spends on core essentials like infrastructure and see whether their rates are going up more than average.”

But averages are pretty useless. What is totally missing in this ‘comparative’ information and surrounding narrative about scurrilous councils is any context.

Why might debt or rates be higher or lower for one council versus another?

Without understanding the context in which different councils are performing, simplistic comparisons are, well, stupid.

Consider a comparison of the HB Regional Council to the Otago Regional Council. Both have very similar core challenges to deal with – heaps of agricultural production with attendant environmental and water use issues.

HBRC services and collects its rates from a population base of 181,100; Otago from 251,300. HBRC employs 333 FTEs at a cost of $35.3 million; Otago employs 336 at a cost of $32.6 million. Over the recent three years, HBRC rates have gone up cumulatively by 45.7%; Otago’s leaner, ‘only’ 39.6%.

But, oh my, we had a flood, they didn’t.

So HBRC plans to make $274.5 million in capital expenditures over the three years ending 2027 (87% on flood protection), while Otago will commit only $53.3 million (41% on flood protection). Against those investments, HBRC has $315 million in borrowing headroom, Otago has $189.3 million in borrowing headroom.

It looks to me that HBRC has considerably more work coming down the pipeline (for ‘frills’ like flood protection) than does Otago … and three less people to handle the workload, but spending $96 million more in total operating costs.

So which of these councils is ‘performing better’? Is one over-spending more than the other? Impossible to tell from the Profiles. 

We should value these Profiles as useful tools for getting us all on the same page when we are debating any given council’s financial state of affairs. But be cautious about their severe limitations as ‘Report Cards’ for comparison purposes.