July 20, 2012

Major concerns over proposed law change

The Kapiti Coast District Council has “major concerns” with the Government’s proposed law change that would give the Government power to appoint a Crown Manager to run a council or part of a Council.

In its submission on the Local Government Amendment Bill 2012, Council says such an appointment would represent a direct take-over of both management and governance by the Minister of Local Government.

“This represents a very considerable blurring of the management/governance distinction and is directly contrary to a fundamental tenet of internationally recognised best practice that the spheres of governance and management should be clearly delineated and kept largely separate.

“Further, it represents a removal of one of the few checks and balances in New Zealand’s constitutional democracy provided by the independence of local government.

“Local councils are creatures of statute but they are not departments of central government,” says the strongly worded submission.

The Government introduced the amending legislation in May this year and submissions close July 26.

Council, which approved its submission yesterday, said there were a number of problems with the Bill, and it suggested ways of addressing them.

It said the new Purpose Statement implied that councils were insufficiently focused on what the Government considered to be “core” infrastructure and services. However Kapiti spent about 75% on infrastructure and related services, which was in line with most other councils.

Expenditure on social, environmental and cultural wellbeings amounted to 10 to 15% but was often highly cost-effective in addressing issues at a very local scale.

The Bill provides powers for the Minister to set under regulation benchmarks for Council performance. These are to be used to assess whether a local authority is prudently managing its revenues, expenses, assets, liabilities, investment and general financial dealings.

Council says benchmarking and the use of this information “must recognise the differences between councils and the communities they represent.” It said the nature of long term council infrastructure, differences in population growth, differences in revenue sources and the age of assets resulted in different investment strategies being required for different local authorities.

“What is prudent in one local authority may not be in another.”

Council said the proposal to introduce benchmarks by regulation would give rise to likely rates capping. International experience showed such caps constrained rates increases but failed to result in an optimal mix of local services and rates.

“We are very concerned that using this mechanism to achieve the aim (that we share) of safeguarding the affordability of rates for ratepayers, may result in the situation experienced in New South Wales where asset condition is known to have deteriorated significantly leaving a catch-up legacy for future generations. This has serious negative implications for inter-generational equity.”

Council said it also had “serious concerns” about the destabilising potential of serial reorganisation proposals inherent in the proposed provisions of the Bill.

“Any fringe group with an ideological mission could submit any number of proposals covering any number of local authorities. Alternatively, anyone with an axe to grind with a particular council could submit serial proposals to have it abolished. In either case, a significant loss of productivity would be inevitable in the council(s) concerned and the ability to ensure continuing delivery of services, particularly in the planning and policy areas would be noticeably compromised.”

Council said it was also concerned that the Local Government Commission could also proceed with a proposal without a poll unless a sufficient number of ratepayers petitioned for a poll to be undertaken. Council says the abolition of the requirement for a poll of electors was undemocratic.

It supports the provisions in the Bill giving mayors the power to establish committees and to appoint a deputy and committee chairs, but it opposes the provisions in the Bill giving mayors the power to lead the development of plans, policies and associated budgets.

The full submission can be found on www.kapiticoast.govt.nz/ECD

ENDS

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