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What next for Local Government?

Home Insights What next for Local Government?

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Contributed by: Craig Shrive, Felicity Ellis

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Published on: April 27, 2021


On Friday, the Minister of Local Government, Hon Nanaia Mahuta announced an independent review into the Future of Local Government (Review). The Review will consider 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. Essentially, this covers what local government does, how it does it, and how it pays for it, and includes:

  • roles, functions and partnerships;

  • representation and governance; and

  • funding and financing.

This Review will run in parallel to large scale reform of New Zealand's resource management framework and the provision of water services – both of which are a core responsibility of local government. Indeed, in response to concerns raised about the future role of local government if it does not provide water services, the Minister has previously indicated that the scope of its future role would be examined, with a focus on the positive contribution local government can make to wellbeing.
The Review is also partly due to the significant technological and societal change that has occurred since the Local Government Act 2002 was enacted; the need to respond to requests that the Government determine how to ensure the Treaty relationship is fully provided for through the local government system; and the desire to strength the relationship between central and local government. 
The Ministerial review is not a formal inquiry under the Inquiries Act 2013. However, the Terms of Reference indicate that many of the operational matters (such as administrative support, planning and reporting) will be consistent with inquiries conducted under that Act.
The Terms of Reference envisage two stages of review.  The initial and priority focus will be on how local government will be a key contributor to the wellbeing and prosperity of New Zealand and an essential connection to communities in the governance of New Zealand. The Review is empowered to then scope the broader work to follow this initial focus, including identifying process and priority questions.
Jim Palmer has been appointed Chair of the Review. Other panel members are John Ombler QSO, Antione Coffin, Gael Surgenor and Penny Hulse.
The timeframe for the Review is as follows:

  • The Review may commence from 3 May 2021.

  • An interim report will be presented to the Minister signalling the probable direction of the review and key next steps on 30 September 2021.

  • A draft report and recommendations will be issued for public consultation on 30 September 2022.

  • The final report of the Review will be presented to the Minister and Local Government New Zealand on 30 April 2023.

The Terms of Reference state that the Government will "welcome the work of the Review but will not be pre-committed to the implementation of its findings". We therefore expect that, following the presentation of the final report, Cabinet will consider the findings, and subsequently announce its intended response. Reform will therefore not be implemented for some years – and there is unlikely to be certainty of proposed direction for local authorities deciding whether to opt in to the water reform process at the end of this year.
The Terms of Reference for the Review (available here) require the Panel to undertake a "robust" engagement process throughout the duration of the Review, so we expect that there will be ample opportunity to participate.

This article is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.

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