What’s the problem that will be solved or the opportunity that will be realised?

While there is room to improve the performance of local government in the Wairarapa the LGC amalgamation proposal does not address a specific problem or opportunity.

The proposal does not identify a specific problem or opportunity that will be fixed by the restructuring of local government but makes a sweeping statement:

The Wairarapa as a whole is not well represented by its current council arrangements. Having local government at a Wairarapa scale will create opportunities for the area that are missed or held back by its current three-council arrangements.

It then goes on to set out some future challenges and questions if these would be better met from three current small councils or a single medium sized council. It then says that:

…a single combined council with all the advantage this implies – scale, capacity, resilience, economic integration, expertise and combining local representation with a mandate to work in the best interests of the whole of the Wairarapa – would be much better placed to meet such challenges.

However, nowhere in the proposal does it make any fact-based evidential connection between these claimed benefits and the challenges it has asserted.

In several places the proposal suggests the Wairarapa will have more scale, capacity and resilience. However, it does not then explain how this will be so:

  • Where will the scale of resources referred to by the LGC come from?
  • Who will pay for them?

Are the costs and risks worth it?

Structural change incurs costs, has risks associated with it and sometimes produces unintended consequences. It is generally only undertaken to address a specific problem or opportunity and when there are clear measures by which the success of the change can be assessed.

The benefits claimed from the proposed amalgamation are aspirational, ideological and lack specificity.

Where is the accountability for results?

No person or local government entity will actually be responsible and held accountable for achieving the benefits aspired to by the LGC.The LGC claims that the advantages that outweigh the benefits of the status quo are:

  • Governance and decision-making. 

  • The provision of infrastructure, services and regulation. 

  • Productivity gains across the Wairarapa economy. 

  • Simplified planning.


However, there is little if any evidence to support these claims.

Would it be any better?

Research performed by the LGC makes it clear that the three current Wairarapa district councils are all undertaking their responsibilities as territorial authorities effectively and that none of the existing three councils can be regarded as currently failing in any way. Additionally, the LGC was advised by its own staff that changes in population structures are not yet preventing the existing councils from undertaking their responsibilities effectively and that the major rationale for amalgamation, removing duplication in decision-making processes and support staffing, would not necessarily result in major efficiencies.

When testing whether the proposal meets the legal test of “democratic local decision-making and action by and on behalf of communities” and “the ability to meet current and future needs of communities for good quality local infrastructure, public services and regulation”, the LGC was advised, again by its own staff, that the current set up works just as well as the proposal.

LGC staff also suggested that amalgamation will facilitate improved economic performance in Wairarapa through efficiency and cost savings, productivity improvements and simplified planning. These are all considered below and only one, simplified planning, has a fact base that supports the idea that it might improve economic performance. The other claims made by the LGC are demonstrably false.

Amalgamation is not supported by research

Researcher Jason Krupp of the New Zealand Initiative has written several research papers on the failures of amalgamation and the benefits of small scale local democracy including The Local Benchmark: When Smaller is Better and The Local Manifesto.

To quote former Minister of Local Government Rodney Hide from the foreword of The Local Manifesto: “Jason Krupp challenges us in his report that the solution to the problem of local government is not the present trend of fewer councils but more, not a local government that does less but one that does more. It’s both a challenging and enticing report, especially to those of us who favour diversity, choice and competition over the rhetoric of uniformity and consistency.”

In the Local Benchmark, Krupp suggests there is strong evidence that localism is a viable and efficient form of governance and that the pressure on local authorities to find new ways to attract talent and capital means local government should be given the tools and flexibility to compete.

Krupp’s research is backed by the 2011 report from the research joint venture between the Australian Centre of Excellence for Local Government, the Local Government Association of South Australia, and Local Government New Zealand. This report showed that there is little evidence that amalgamation leads to economies of scale or efficiency gains that translate into real cost control. The report did identify some benefits from economies of scale and enhanced strategic capacity but it also said that flawed processes ensure that any benefits are either lost or much reduced.

Overseas experience

France

  • There are around 37,000 mayors in France, one for every commune, village, town and city.
  • That’s an autonomous powerful civic leader for every 1800 people. The mayor is backed by an elected council.
  • On a 1:1 comparison that would be 24 mayors for the Wairarapa and over 100 councillors.

Switzerland

  • Switzerland had 2,294 municipalities run by a mayor and council as of January 2016.
  • The size ranges from villages to major cities. The average population per municipality is 3,522.
  • In Switzerland 3,500 voters get a mayor and councillors.
  • In Wairarapa LGC proposal would give us one councillor for 3,500 people.

New Zealand productivity which used to lead Switzerland by several places in the league tables now significantly lags Swiss productivity. Are we missing something here?

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