Hamilton rates a dishonourable mention in the case for local government reform.

The city's ill-fated hosting of the V8 street race – and its $40 million cost to ratepayers – is cited as a "worst case example" of financial management.

The description, by Internal Affairs officials, confirms the catalysts for government reforms to rein in council spending that has led to ever-growing rates increases.

In the past decade, the rates component of the consumer price index, a measure of inflation, rose an average 6.8 per cent per year, more than any other component: food price rises averaged 3.3 per cent, transport costs 2.6 per cent and housing 5 per cent.

In the same 10 years, council debt nationally climbed to record levels, from $2 billion to $7b.

Councils' main way of servicing that growing debt is to increase rates.

The Government says the problems include a lack of skills, failures of governance or decision-making, and a lack of sufficient focus and incentives to operate efficiently.

It has argued that improving local government efficiency requires a suite of actions.

The reforms include financial benchmarking to better allow comparisons and explicit powers for government intervention, with a lower threshold for action than currently.

They also aim to refocus the local government sector on "core" council business.

- © Fairfax NZ News

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