The Department of Internal Affairs

The Department of Internal Affairs

Te Tari Taiwhenua

Building a safe, prosperous and respected nation

 

Better Local Government

Overview

In March 2012 the Government announced an eight point reform programme for local government. This is part of the Government’s broader programme for building a more productive, competitive economy and better public services.

The first phase of the programme culminated in legislation that was passed in December 2012.

The Local Government Act 2002 Amendment Act 2014 became law on 8 August 2014.

The Amendment Act amends the Local Government Act 2002 to:

  • change what development contributions can be used for;
  • allow for objections to development contributions charges;
  • encourage more collaboration and shared services between local authorities;
  • make consultation requirements more flexible;
  • provide for a new significance and engagement policy;
  • enable more efficient and focused consultation on long-term plans and annual plans;
  • remove unnecessary duplication between annual plans and long-term plans;
  • introduce new requirements for infrastructure strategies and asset management planning;
  • enable elected members to use technology to participate in council meetings, rather than attending in person;
  • require councils to disclose information about their rating bases in long-term plans, annual plans and annual reports; and
  • require disclosure of risk management arrangements for physical assets in annual reports.

The Act also includes provisions that enable the Local Government Commission to:

  • establish local boards (similar to those in Auckland) as part of new unitary authorities, and in existing unitary authorities; and
  • create council-controlled organisations and joint committees as part of a reorganisation scheme.

The Government has also made decisions about the details of local government financial prudence regulations. These regulations have now been prepared.  A link to them can be found here: http://www.legislation.govt.nz/regulation/public/2014/0076/latest/whole.html

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Local Government Act 2002 Amendment Act 2014

The final Amendment Act can be found here:

  • Local Government Act 2002 Amendment Act 2014 (link currently available)

The Act gives effect to Government decisions about a further set of reforms to the Local Government Act 2002, building on the amendments made in 2010 and 2012.  The reforms are designed to encourage and enable local authorities to improve the efficiency and effectiveness of their operations and processes.

Development contributions

Changes to development contributions include:

  • a new purpose for development contributions, and principles to direct and guide their use;
  • clarifying and narrowing the range of infrastructure that can be financed by development contributions;
  • improving the transparency of development contributions policies;
  • encouraging greater private provision of infrastructure through the use of development agreements;
  • introducing a development contributions objection process, with decisions made by independent commissioners; and
  • clarifying legislative provisions to make them more workable and easier to understand.

A series of fact sheets have been prepared, which provide more information on these changes. 

The Associate Minister of Local Government has appointed 26 commissioners to the Register of Development Contributions Commissioners. The Minister's media release includes their names and short biographies.

To assist development contributions commissioners in performing their role, the Department has prepared a guidance manual:

 

Local boards outside Auckland

 

 

Changes to the Local Government Act in relation to boards include:

Making local boards more widely available, with adaptations that make the model appropriate in different circumstances.  The Amendment Act includes provisions that enable the Local Government Commission to:

  • consider the option of local boards during any proposed reorganisation, and establish them as part of new unitary authorities; and
  • consider establishing local boards in existing unitary authorities, and deal with these proposals through a shorter reorganisation process.

The local boards model in the Act has many of the same features as in Auckland, but with the flexibility to allow the Commission to tailor the details to suit each reorganisation.

 

Efficient delivery and governance of local authority services

 

 

The Amendment Act makes the following changes to the Local Government Act 2002:

  • provide for greater encouragement to local authorities to collaborate and cooperate;
  • enable the Local Government Commission to create council-controlled organisations and joint committees as part of a reorganisation scheme;
  • provide for greater transparency, clarity and accountability in contracting for delivery of services by council-controlled organisations;
  • broaden the scope of the triennial agreement between councils within each region;
  • provide a clearer framework for joint committees;
  • clarify provisions relating to the transfer of responsibilities from territorial authorities to regional councils; and
  • clarify that the Local Government Commission can, through the reorganisation process, provide for a regional council to exercise powers and responsibilities conferred on territorial authorities by statute.

 

Consultation, decision making and long-term/annual plans

 

 

The Amendment Act makes the following changes to the Local Government Act 2002:

  • provides for new significance and engagement policies, to provide clarity about how and when communities can expect to be engaged in decisions about different matters;
  • amends the special consultative procedure, so it accommodates new ways for communicating and consulting with the public; and
  • repeals most requirements to use the special consultative procedure when consulting under the Local Government Act 2002.  (Consultation would still be required, though, in accordance with the principles of consultation in the Act.)  

The Act also provides for a new, concise and focused consultation document for long-term and annual plans.  Councils would use these to consult instead of issuing detailed draft plans containing a lot of technical material.

A series of fact sheets have been prepared which provide more information on these changes.

Infrastructure delivery and asset management

The Amendment Act makes the following changes to the Local Government Act 2002:

  • reinforcing the importance of asset management planning as part of a council’s prudent stewardship of resources;
  • requiring councils to prepare an infrastructure strategy for at least a 30 year period, and to incorporate this into their long-term plans from 2015; and
  • requiring councils to disclose risk management arrangements, such as insurance, for physical assets in their annual reports.

A series of fact sheets have been prepared which provide more information on these changes.

Amendments to Financial Reporting Regulations

To complement the other infrastructure-related proposals, the Government decided to amend the Local Government (Financial Reporting) Regulations 2011 to require disclosure of balance sheet information for core assets.

There is currently an information gap that prevents the construction of a national balance sheet for core local authority assets (water, wastewater, stormwater, flood protection, roading).  To address this, the Financial Reporting Regulations have been amended to require councils to disclose certain standard balance sheet information for each of these assets in their annual reports.

View the Local Government (Financial Reporting) Amendment Regulations 2013 here:  http://www.legislation.govt.nz/regulation/public/2013/0468/latest/whole.html#DLM5728112

Local authorities will include their first disclosures under the new regulations in their annual reports for the 2013/14 financial year.  The Department has prepared an example extract from a fictional local authority’s annual report to illustrate the additional information that will need to be disclosed: Example disclosure (.pdf) 65KB*

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Further Information