KEY POINTS:
There has been a lot of debate about the effectiveness of the way Auckland is structured, and whether improvements can be made to the existing format of one regional council and seven city or district councils.
This is not an issue unique to Auckland. Local government structures and delivery mechanisms are being discussed in many countries.
The important part that local government plays in national economies is now better understood. It is not surprising that national governments are becoming increasingly interested in this issue. It is also clear that while national government has a considerable and legitimate interest in the outcome of this debate - cities affect national wealth and central agencies are often large investors in local infrastructure - it cannot play the part of local government.
As part of a discussion around local government restructure in the UK, Deloitte has carried out a review of the success or otherwise of local government reform and published our findings in 2006 (Pushing the Boundaries; Making a success of local government reorganisation). Key findings were:
* Whether reform produces benefits depends as much on how it is implemented as on the exact nature of the change;
* Top-down or government-run processes can make significant change but this is at a price in terms of their acceptance and the effectiveness of their implementation. The consultation process may be seen as being opaque and there is a risk that some changes are seen as politically motivated. The realised benefits and savings may be less than those projected.
* Bottom-up processes involving existing councils get stakeholder support but can mean little change and are ineffective in making the more significant reorganisation that is needed. This is not surprising as there is a tendency for people to oppose change in the area that affects them most.
There are benefits from using an independent 'commissioner' to provide fairness and get stakeholder support. This should provide for both authorities and the public to provide input to shape the proposals. This process can avoid the accusations of unfairness, lack of transparency and political interference while addressing the fundamental issue of reform.
* Changing the structure of local government is not a fast process. As well as decisions about the restructure a major transition process is needed to move to the new organisation(s).
For truly transformative impacts, the new entity will need its own systems, infrastructure and culture, need to incorporate harmonised and improved services and manage to a tighter financial situation. Typically, this can take up to two years to execute and requires a well run transition to ensure service levels do not decline in the interim.
This international analysis seems to make sense and perhaps can be a guide for the current discussions in Auckland.
Let's also remind ourselves of the reasons for reform:
* There is an opportunity for direct cost savings from duplication of resources. Some of this could be won from a shared services approach but is unlikely to obtain all the benefits without organisational change
* There are opportunities for indirect cost savings to customers from having consistent regulations across the region
* The region could be more effective in our planning and execution as we would be able to could have a more effective structure for considering the plan for the region as a whole and for effecting delivery
* We would reduce the impact of the mislocation of some powers, assets and income
The City region would be able to present one face to discussions with national government and agencies and bring a greater resource to bear on resolving local issues
These issues are not unique to Auckland but they are important to the region and the rest of New Zealand. Let's learn from the lessons in the UK to help guide our actions.
* Nick Main is the chairman of Deloitte
