The Local Government and Environment Select Committee yesterday released its report on the Local Government Act 2002 Amendment Bill.  The Bill is aimed at strengthening council governance and increasing councils' operational efficiency.

The Committee was divided on several key issues and ultimately could not agree that the Bill be passed. 

Objections were raised by Committee members from opposition parties in relation to a number of changes proposed in the Bill, including the following:

  • Replacing the statutory purpose of the LGA, which requires local government to promote the “four well-beings” in the community (social, economic, environmental, and cultural well-being), with the new purpose of meeting "the current and future needs of communities for good quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses”.  Opposition Committee members were concerned that the change could threaten the maintenance of local government activities that foster community cohesion and welfare, and that it could increase the potential for judicial review of local government decisions.
  • Increasing the powers of Ministerial intervention in local government decision-making.  Opposition Committee members were concerned that this could threaten the autonomy of local authorities.
  • Increasing mayoral powers: The Bill proposes to extend some aspects of the Auckland mayoral model to all mayors, such as the power to appoint deputy mayors and chairs of committees.  The Green Party Committee members were concerned that this could pose a threat to collaborative working relationships between the mayor and councillors.
  • Removing the mandatory requirement for a poll of electors in each district or region that is directly affected by a reorganisation scheme that has been approved by the Local Government Commission.  Opposition committee members stated that this process is antidemocratic.
  • Introducing a system of financial benchmarks for councils' performance in respect of income and expenditure (to be set out in regulations to ensure flexibility).  The Green Party Committee expressed concern that the creation of such benchmarks, when combined with increased Ministerial intervention powers, could cause the benchmarks to evolve into de facto caps on rates and council debt that could ultimately degrade rather than enhance council's ability to manage their affairs in a financially prudent way.

The full report of the Select Committee can be found here.