This blog post was originally published on the New Zealand Center for Political Research

As has been reported recently, a Panel set up by the government to review local government, called Future for Local Government (FFLG), has released its DRAFT report. The full report may be seen HERE.

The report is not government policy and is not about to be passed into law anytime soon – certainly not before next year’s general election.

Background

The DRAFT report is the second of three reports to be released by the working group. The INTERIM report was released in September 2021. The third and FINAL report will be released in June 2023, following a public submissions process which will close on 28 February 2023.

The INTERIM report is consistent with the DRAFT report and there is no reason to believe the recommendation in the FINAL report will be materially different. The reason is very simple – they must report within the terms of reference which were prescribed by the Minister of Local Government Nanaia Mahuta. (The full terms of reference are appended).

In essence, the terms of reference required the working group to make recommendations that achieved the following:

• Effective partnerships between mana whenua, and central and local government in order to better provide for the social, environmental, cultural, and economic wellbeing of communities; and
• A local government system that actively embodies the Treaty partnership, through the role and representation of iwi/Māori in local government, and seeks to uphold the Treaty of Waitangi (Te Tiriti o Waitangi) and its principles through its functions and processes.
• The role and representation of iwi/Māori in the local government system should be across all aspects of the Review’s consideration of this matter.
• The Review should appropriately consider reports relevant to the future for local government, including, but not limited to:
  • Relevant reports and findings of the Waitangi Tribunal;
  • The Productivity Commission’s report on local government funding and financing;
  • The Justice Committee’s recommendations in its Inquiry into the 2016 Local Elections, the interim report for the 2019 Local Elections and any subsequent Justice Committee reports on local elections; and
  • The Climate Change Commission’s advice to Government.

The terms of reference also state what the group should NOT do:

“The Review should not make any inquiries into any Government policy decisions, including but not limited to those related to programmes of reform.”

In simple language, the terms of reference require the panel to report on the mechanisms to reform local government in a way that is consistent with the wishes of central government.

Reforming local government in the way recommended in the Future for Local Government report would be a giant leap forward for the government in achieving its He Puapua strategy.

The recommendations in the draft report

There are 29 recommendations contained in the report (appended in full).

Three fundamental themes emerge from the recommendations:

1. Embedding Māori as a governance “partner”. There is considerable emphasis on councils adopting te ao Māori values [The “Māori world view”] and changing the Local Government Act to introduce “Tiriti-related provisions” to create “a genuine partnership in the exercise of kāwanatanga and rangatiratanga”. Councils would be required to “give due consideration to an agreed, local expression of tikanga whakahaere [management practices] in their standing orders and engagement practices, and for chief executives to be required to promote the incorporation of tikanga in organisational systems.”

   The Panel’s recommendations are based on their comment that “Councils remain predominantly made up of older European/Pākehā elected members. There needs to be more diverse representation and increased governance capability at the council table. While Māori wards and constituencies are a positive feature, they were not designed to provide for Tiriti-based representation of mana whenua or significant Kaupapa-based groups. Councils need to increase their capability in, and understanding of, Te Tiriti o Waitangi and te ao Māori.”

   Clearly, it is the Panel’s view that local councils need to be more ‘diverse”, meaning the “older European/Pākehā elected members” need to be replaced with Māori members.

2. Reinventing the role of local government to become an “agency” acting on behalf of central government to achieve a broad range of community well-being objectives. Councillors would be required to comply with mandated conduct rules and senior local council employees would be subject to the same terms and conditions as state employees. At an organisation level, local council chief executives would be required to “develop and maintain the capacity and capability of council staff to grow understanding and knowledge of Te Tiriti, the whakapapa of local government, and te ao Māori values”.

3. The structure of local councils would be reformed to “better achieve” their new role. The Panel has provided a number of scenarios involving the amalgamation of local councils and in some cases greater reliance on community boards for local input. In all cases, there would be a “statutory requirement on councils to foster Māori capacity to participate in local government” and develop a “partnership framework that complements existing co-governance arrangements”. In other words, Māori would have a greater presence around the decision-making table. In their view, having Māori wards is not enough to achieve a “partnership”.

With respect to local government elections, they recommend adopting Single Transferrable Vote system for all council, lowering the eligible voting age in local body elections to 16, and introducing a four-year local electoral term (all recommendations made by LGNZ).

The rating provisions would be reviewed to open up new funding options for local councils, including “that central government agencies pay local government rates and charges on all properties”. For example, on DoC land and properties leased by government departments.

These are radical changes. If implemented they would pass control of local authorities to Māori, and councils would in effect become a local agency of central government.

Local Government NZ

There is no doubt Local Government NZ has had a significant influence on the recommendations included in the Draft Report. There is also no doubt LGNZ sees itself as having an important role in transforming local government – and in its submission to the Panel has requested financial support from central government “to provide induction and training resources for councils to increase their understanding of local tikanga, kawa and histories, and ensure that all staff and elected members can show respect for and an understanding of te ao Māori”.

It says, “In early 2022, we ran workshops and engaged in kōrero with councils, gathering a broad range of perspectives. As a result, we developed a paper for the Panel that outlines a clear vision of what councils want to become. It outlines the barriers that so far have stopped councils from achieving this vision and provides a series of recommendations for the Panel’s consideration about how these challenges might be addressed to make the sector’s vision a reality.”

It will be interesting to see how many of the new councils support the LGNZ submission, and if not whether they believe LGNZ is representing their best interests.

The submission from LGNZ can be seen HERE.

The response

So where to from here? Let’s start with a dose of realism.

Submissions to the Panel are open until 28 February 2023. Are the submissions likely to change the recommendations of the Panel? No. The terms of reference require the Panel to recommend co-governance, and LGNZ has supported that stance.

Is it worth putting in a submission? Yes. Because silence will be taken as acceptance.

Submissions should be made directly to the Panel HERE.

The solution

Realistically, no amount of arm waving and foot stomping to the Panel is going to make any difference. Nanaia Mahuta has set a course on co-governance and the Future for Local Government report is part of that agenda, as detailed in He Puapua.

The solution is a political one. No amount of polite protest will change the fact that the only solution is to remove the Labour Party from government. That opportunity presents itself next year. Co-governance is shaping up to be a very important election issue.

More information

https://www.futureforlocalgovernment.govt.nz/about/

Appendix 1: Terms of reference

https://www.dia.govt.nz/Future-for-Local-Government-Review-Terms-of-Reference

Purpose and scope

The Minister of Local Government (the Minister) is establishing a Ministerial review into the Future for Local Government (the Review). The Review is to consider, report and make recommendations on this matter to the Minister.

The overall purpose of the Review is, as a result of the cumulative changes being progressed as part of the Government’s reform agenda, to identify how our system of local democracy and governance needs to evolve over the next 30 years, to improve the wellbeing of New Zealand communities and the environment, and actively embody the Treaty partnership.

The Minister is seeking recommendations from the Review that look to achieve:

– a resilient and sustainable local government system that is fit for purpose and has the flexibility and incentives to adapt to the future needs of local communities;

– public trust/confidence in local authorities and the local regulatory system that leads to strong leadership;

– effective partnerships between mana whenua, and central and local government in order to better provide for the social, environmental, cultural, and economic wellbeing of communities; and

– a local government system that actively embodies the Treaty partnership, through the role and representation of iwi/Māori in local government, and seeks to uphold the Treaty of Waitangi (Te Tiriti o Waitangi) and its principles through its functions and processes.

The scope of this matter comprises what local government does, how it does it, and how it pays for it. The scope should include, but not be limited to, a future looking view of the following:

– roles, functions and partnerships;

– representation and governance; and funding and financing.

The role and representation of iwi/Māori in the local government system should be across all aspects of the Review’s consideration of this matter.

The Review should also recognise Aotearoa’s increasing diversity, and give consideration to the relationship between strengthening social inclusion and improving the wellbeing of our communities.

The Review should appropriately consider reports relevant to the future for local government, including, but not limited to:

– relevant reports and findings of the Waitangi Tribunal;

– the Productivity Commission’s report on local government funding and financing;

– the Justice Committee’s recommendations in its Inquiry into the 2016 Local Elections,

– the interim report for the 2019 Local Elections and any subsequent Justice Committee reports on local elections; and

– the Climate Change Commission’s advice to Government.

The Review should also be guided by the objectives of the Public Service Act 2020, in terms of building a unified, agile and collaborative public service, grounded in a commitment of service to the community.

The Review should not make any inquiries into any Government policy decisions, including but not limited to those related to programmes of reform. The impact of reform programmes on local government, such as those related to the three waters sector and resource management system, are within the scope of the Review.

Appendix 2: The 29 recommendations made by the Panel (full text)

Revitalising citizen-led democracy

1 That local government adopts greater use of deliberative and participatory democracy in local decision-making.

2 That local government, supported by central government, reviews the legislative provisions relating to engagement, consultation, and decision-making to ensure they provide a comprehensive, meaningful, and flexible platform for revitalising community participation and engagement.

3 That central government leads a comprehensive review of requirements for engaging with Māori across local government related legislation, considering opportunities to streamline or align those requirements.

4 That councils develop and invest in their internal systems for managing and promoting good quality engagement with Māori.

5 That central government provides a statutory obligation for councils to give due consideration to an agreed, local expression of tikanga whakahaere [management practices] in their standing orders and engagement practices, and for chief executives to be required to promote the incorporation of tikanga in organisational systems.

Tiriti-based partnership between Māori and local government

6 That central government leads an inclusive process to develop a new legislative framework for Tiriti-related provisions in the Local Government Act that drives a genuine partnership in the exercise of kāwanatanga and rangatiratanga in a local context and explicitly recognises te ao Māori values and conceptions of wellbeing.

7 That councils develop with hapū/iwi and significant Māori organisations within a local authority area, a partnership framework that complements existing co-governance arrangements by ensuring all groups in a council area are involved in local governance in a meaningful way.

8 That central government introduces a statutory requirement for local government chief executives to develop and maintain the capacity and capability of council staff to grow understanding and knowledge of Te Tiriti, the whakapapa of local government, and te ao Māori values.

9 That central government explores a stronger statutory requirement on councils to foster Māori capacity to participate in local government.

10 That local government leads the development of coordinated organisational and workforce development plans to enhance the capability of local government to partner and engage with Māori.

11 That central government provides a transitional fund to subsidise the cost of building both Māori and council capability and capacity for a Tiriti-based partnership in local governance.

Allocating roles and functions in a way that enhances wellbeing

12 That central and local government note that the allocation of the roles and functions is not a binary decision between being delivered centrally or locally.

13 That local and central government, in a Tiriti-consistent manner, review the future allocations of roles and functions by applying the proposed approach, which includes three core principles:

▸ the concept of subsidiarity [roles and functions should be led and managed at the most appropriate local level so that communities are empowered to shape their outcomes and take a leadership role in doing so]

▸ local government’s capacity to influence the conditions for wellbeing is recognised and supported

▸ te ao Māori values [a Maori world view] underpin decision-making.

Local government as champion and activator of wellbeing

14 That local government, in partnership with central government, explores funding and resources that enable and encourage councils to:

a. lead, facilitate, and support innovation and experimentation in achieving greater social, economic, cultural, and environmental wellbeing outcomes

b. build relational, partnering, innovation, and co-design capability and capacity across their whole organisation

c. embed social/progressive procurement and supplier diversity as standard practice in local government with nationally supported organisational infrastructure and capability and capacity building

d. review their levers and assets from an equity and wellbeing perspective and identify opportunities for strategic and transformational initiatives

e. take on the anchor institution role, initially through demonstration initiatives with targeted resources and peer support

f. share the learning and emerging practice from innovation.

Replenishing and building on representative democracy

15 That the Electoral Commission be responsible for overseeing the administration of local body elections.

16 That central government undertakes a review of the legislation to:

a. adopt Single Transferrable Vote as the voting method for council elections

b. lower the eligible voting age in local body elections to the age of 16

c. provide for a 4-year local electoral term

d. amend the employment provisions of chief executives to match those in the wider public sector, and include mechanisms to assist in managing the employment relationship.

17 That central and local government, in conjunction with the Remuneration Authority, review the criteria for setting elected member remuneration to recognise the increasing complexity of the role and enable a more diverse range of people to consider standing for election.

18 That local government develops a mandatory professional development and support programme for elected members; and local and central government develop a shared executive professional development and secondment programme to achieve greater integration across the two sectors.

19 That central and local government:

a. support and enable councils to undertake regular health checks of their democratic performance

b. develop guidance and mechanisms to support councils resolving complaints under their code of conduct and explore a specific option for local government to refer complaints to an independent investigation process, conducted and led by a national organisation

c. subject to the findings of current relevant ombudsman’s investigations, assess whether the provisions of the Local Government Official Information and Meetings Act 1987, and how it is being applied, support high standards of openness and transparency.

20 That central government retain the Māori wards and constituencies mechanism (subject to amendment in current policy processes), but consider additional options that provide for a Tiriti-based partnership at the council table.

Equitable funding and finance

21 That central government expands its regulatory impact statement assessments to include the impacts on local government; and that it undertakes an assessment of regulation currently in force that is likely to have significant future funding impacts for local government and makes funding provision to reflect the national public-good benefits that accrue from those regulations.

22 That central and local government agree on arrangements and mechanisms for them to co-invest to meet community wellbeing priorities, and that central government makes funding provisions accordingly.

23 That central government develops an intergenerational fund for climate change, with the application of the fund requiring appropriate regional and local decision-making input.

24 That central government reviews relevant legislation to:

a. enable councils to introduce new funding mechanisms

b. retain rating as the principal mechanism for funding local government, while redesigning long-term planning and rating provisions to allow a more simplified and streamlined process.

25 That central government agencies pay local government rates and charges on all properties.

System design

26 That central and local government explore and agree to a new Tiriti-consistent structural and system design that will give effect to the design principles.

27 That local government, supported by central government, invests in a programme that identifies and implements the opportunities for greater shared services collaboration.

28 That local government establishes a Local Government Digital Partnership to develop a digital transformation roadmap for local government.

System stewardship and support

29 That central and local government considers the best model of stewardship and which entities are best placed to play system stewardship roles in a revised system of local government.

Author – Frank Newman