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Local Government Commission responsibility for wasted amalgamation costs

  • September 16th, 2015

Ron Mark MP in Parliament today excoriated the recent performance of the Local Government Commission. I’m hopeful that it will improve under Sir Wira Gardiner. It has much ground to make up. The LGC should be extremely humble after obvious failure to produce any valuable reform over the past few years, and after voters showed  no respect for its recommendations.

Ron urged the government to read my firm’s submission in May this year to the Local Government Select Committee. This post notes a few conclusions set out in that submission based on some years of dealing with the Commission.

First, we argued that there is a vital role for a Local Government Commission committed to intellectual quality. We submitted that:

“…the Commission should be a stimulating centre of knowledge, research and excitement about local government excellence. It should be promoting rigour and wide thinking about the possibilities and the problems, drawing from experience across New Zealand and around the world. It should help protect local councillors and local democracy from temporary fashions in reform enthusiasm, misinformation and unreasonable expectations of local government. It should be ready for those purposes with sober, objective and clearly independent and neutrally authoritative comparative information. It should be trusted by government and parliamentarians as being unbiased and expert in its role. Its contributions should be so inherently compelling they would be sought. It should be respected enough by local authorities that they refer disputes voluntarily. It should have a reputation for independent excellence sufficient to lead local authorities to welcome it as a nominator for positions on CCOs or other multi-authority bodies.”

We went on:
It currently offers none of the above. Some of that could be remedied with suitable changes to its governing statute. But it does not presently deserve confidence that it would not abuse, or fail to deliver with, such powers.
This submission sets out circumstances that lead us to that assessment, including the Commission’s;
a) odd interpretations of its governing statute, including a bizarre attempt to persuade us that legal white is black;
a) false presentation of important provisions of its governing statute in public information, with an apparent intention to persuade citizens that the Commission’s decision criteria were both lawful and satisfied;
b) lack of research (or curiosity) about important reform decision factors it is legally required to evaluate;
c) obvious bias;
d) origination of misleading description used in propaganda to the public;
e) use of unsupported emotive language in reports that should have been objective and research based;
f) indifference to delay in correcting established material errors in published material while citizens were being encouraged to make submissions in reliance on it;
g) seeming lack of interest in obtaining objective appraisal of the Auckland experience;
h) commitment to the “single voice” objective for local government without any critical appraisal or research, or even intuitive reflection on pros and cons;
i) failure to reflect on or to research the relative performance and experience of councils of differing sizes, including the contribution of small Councils in the response to the Canterbury earthquakes.”
We described instances of the Commission making up “statutory” language to support its view of what its objectives should be because the actual statute was inconveniently different. When we drew this astonishing deceit to the attention of Wellington Fairfax reporters, unbelievably it was not reported. The DomPost evidently agreed with the great and the good of Wellington that the outlier peasantry would be better off ruled from the centre, and a little thing like a statutory commission lying about the law was an inconvenient truth not worth exposing.

Our submission to the Select Committee set out chapter and verse:

Missed out the ‘local’ from democratic local decision-making

The purpose of local government is (s 10):
j) to enable democratic local decision-making and action by, and on behalf of, communities; and
k) to meet 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.
In explaining the legislative requirements [in its published assessment of proposals for amalgamation], the Commission misquoted the LGA, saying:
“(8) The purpose of the local government is to enable democratic decision-making by, and on behalf of, communities”.
The LGA [conveniently omitted the words “local” and “and action”].
There are three mistakes in this misquote of the legislation. The legislation is critical and directly affects the decision the Commission is evaluating. To alter key criteria from “democratic local decision-making” to simply “democratic decision-making” materially changes the meaning of the criterion. Similar mistakes are made elsewhere in the proposal with “local” being left out in key considerations . This is contrary to the purpose of the LGA. As Justice Collins in the NAG decision said “communities [must]be the focal point of the way local government is organised” and “Parliament’s intention [is] that communities be more empowered to influence the basis upon which local government is reorganised”.
Instead of concentrating on “local” decision-making the draft proposal focuses on the need for a stronger and more effective regional leadership and a strong voice with local government . This example shows a misapplication of the law.

We expanded on the Commission’s invented (and illegal)  ‘strong voice’ criterion

We think the mistakes may be due to the Commission focusing on the need for a “strong voice” or “single voice”. This is not a legislative criterion. Nor is it a criterion that is subject to any disciplined analysis. They seem to have given no consideration whatsoever to:
1) the enhanced risk for a community if the “single voice” is discredited and not widely respected;
2) mechanisms to reduce the “all our eggs in one basket” risk of single voice suppression of dissenting voices;
3) ways to [improve] the quality of the voices contending for local leadership.

This “single voice” mistake was at the heart of the Draft Proposals for Reorganisation of Local Government in [Hawkes Bay and Northland]. Both proposals referred to the need to have a “single voice to advocate to central government”.

On 18 July 2014 we wrote to the Commission requesting information on the “single voice” references. Their reply of 18 June 2014 [enclosed] said:
“The Commission sees this as closely relating to effective representation of communities of interest, a criterion under clause 11(5) of Schedule 3 of the Local Government Act 2002. Effective representation of communities of interest is an important contributor to enabling democratic local decisions-making by and on behalf of communities, being part of the purpose of local government and a criterion under clause 12. The Commission will be taking such matters into account in determining how it will proceed with the current proposals.”

But in fact as we explained to the Commission:

“Clause 11(5) requires the Commission to be satisfied that the local authority proposed will “contain within its district or region 1 or more communities of interest, but only if they are distinct communities of interest”. There is no mention of “effective representation of communities of interest” in clause 11(5). The first purpose in section 10 is “to enable democratic local decision-making and action by, and on behalf of, communities”. The statutory purposes make no reference to representation; rightly, as representation of voters is a condition of legitimacy, but representation of a territorial area would be among the least important functions of local government.
The only use of the phrase “effective representation” in Schedule 3 is in sub clauses 15(5)(b) and (7). The first is to ensure enough local board members to “provide effective representation of communities of interest within the district”. The second has a similar purpose.
Clause 15 is a strong direction to ensure that particular communities are not left without effective representation. Far from being authority to promote a “single voice”, by reducing the likelihood of multiple views being expressed, it is an instruction to protect one of the fundamental purposes of representative democracy. In brief, it is about local voices, not single voice.
Furthermore, even if it had not been an attempt to mislead us and others, with a patently false claim to statutory legitimacy, the Commission should have been sufficiently expert, analytical and well informed to ask itself whether having one strong regional voice to central government is as important as ensuring representation of competing views.
They should have been examining the Auckland experience to see whether having a single voice means that voice will be a sensible or representative voice.”

Misleading advertising
The Commission distributed propaganda for the Wellington amalgamation instead of objective description. It included passages very similar to those which the Advertising Standards Authority Complaints Board ruled, when used in GWRC propaganda:

“represented its own assumptions and opinions as fact which was misleading and was likely to exploit the lack of knowledge of the readers”. The Board found statements in the advertisement were in breach of Basic Principle 3, and Rules 2 or 11 of the Code of Ethics. Consequently, the Complaints Board ruled these parts of the advertisement had not been prepared with a due sense of social responsibility, breaching Basic Principle 4.”

On the now failed Hawkes Bay proposal the Commission said:

“One council and one Mayor, supported by a Maori Advisory Board, would work to advance the interests of the entire region and would provide strategic leadership across Hawkes Bay as a whole. One Council would also address concerns that Hawkes Bay is being held back by rivalry and a lack of cooperation between existing councils”.

This press release was a subjective promotion of amalgamation despite overwhelming feedback against it. The Commission produced nothing to substantiate the contention that rivalry and a lack of cooperation was “holding back” Hawkes Bay. There was no apparent awareness of the research literature which evaluates the benefits of “regulatory competition” to discipline bodies susceptible to abuses of power. There appears to have been no interest in the vital contribution of small local authorities Waimakariri and Selwyn, given the poor performance of Christchurch City Council and Environment Canterbury before the appointment of Commissioners.
Lawrence Yule, Mayor of Hastings and LGNZ head, has shown how to take a lesson in his response to losing the amalgamation vote in Hawkes Bay. I’m reasonably confident that the Gardiner LGC will be a similarly good learner.

But the acid test will be whether the Commission and LGNZ now turn to investigate ways to improve local democracy. See here, and here for some suggestions.

Different regions should be set free to experiment (given that this government is already experimenting with tailor-made models in Auckland and Canterbury). We will need law changes to secure better Councils. They must eliminate some of the perverse incentives and unfair liabilities that distort decisions. They could reduce the trend toward elections being name-recognition exercises even for avid followers of public affairs.  And they could reduce the time frustrations that steer high calibre people away from local government.


  • Roger Strong
  • September 18th, 2015
  • 3:12 pm

But look at who is one the commission-they have our old mayor Basil Morrison who famously rural residents of this area-‘if you life in the country then don’t expect any services’. He was also on the Treaty of Waitangi tribual that decided that the far north tribes hadn’t conceded soveignty.

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