Bigger councils 'stronger but not cheaper '

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Local councils that amalgamate into a larger body can exert more influence on central government but are unlikely to make any cost savings or lower rates, according to a trans-Tasman report out this week.

A joint effort by the local government associations of New Zealand and South Australia and the Australian Centre of Excellence for Local Government, the report sought to evaluate the "consolidation" of numerous local bodies in both countries.

It says the recent amalgamation resulting in the Auckland super-city will need to be studied in future but its formation may "for the first time in [New Zealand] history" see a council set the direction of reform rather than wait for central government to intervene.

The writers say consolidation of councils is a recurrent theme in local government, but post-reform evaluation is rare. Consolidation could include amalgamation, sharing services, collaboration and boundary adjustment.

The report says efficiency gains are possible through consolidation "but are unlikely to produce reductions in local rates and charges due to other expenditure needs" and there was little evidence that amalgamation "will of itself yield economies of scale greater than those achievable through other forms of consolidation".

There were few robust examples of such savings being achieved, yet many in central government and some in local government "still cling to the belief that substantial savings can and should be made".

However, consolidation in some form could result in better strategic capacity and efficiency.

Concerns about loss of democracy resulting from less representation were "muted", suggesting the issue was being managed well or that it was not a major factor for communities, the report says.

Amalgamation had the advantage of creating larger councils "more likely to be engaged as partners with state or national governments in regional planning or governance arrangements and to be able to exert real influence".

The report comes as the Internal Affairs Department conducts closed door meetings around New Zealand with academics, public commentators, and representatives from iwi and local government as part of a review requested by Local Government Minister Rodney Hide.

Several smaller councils had been identified as "vulnerable" and Mr Hide believes structural reform such as amalgamation could solve some of their issues.

Local Government NZ president Lawrence Yule yesterday said the report reiterated his thoughts on amalgamation.

Mr Yule, who is mayor of Hastings and wants his council to amalgamate with Napier, said he had always believed the main reason for amalgamation was strategic capacity and the ability to influence.

- © Fairfax NZ News