Horowhenua District mayor says smaller councils suffer under Government funding model

Horowhenua mayor Bernie Wanden.

Horowhenua mayor Bernie Wanden says the Government’s existing one-size-fits-all model for its policy mandates isn’t working for some councils, including Horowhenua District.

Unfunded mandates are costs that the central government imposes on councils. Wanden said the impact the mandates can have on smaller councils such as Horowhenua is huge.

A NZ Institute of Economic Research (NZIER) report commissioned by Local Government New Zealand released this month stated policy mandates weren’t always in the best interest of councils, and often result in increased costs for ratepayers.

Those costs increased rates, he said, adding that then local ratepayers sometimes blamed their local council for that increase, rather than central government.

“We are often blamed for putting rates up but some of that cost that we have to share with our ratepayers has been forced upon us by central government.”

Earlier this year the council settled on a 16.6% rates increase in its Long-Term Plan 2024-2044. To avoid it being higher, elected members had to make cuts to some services, including reducing opening hours at Te Takeretanga o Kura-hau-pō Levin Community Centre and Te Awahou Nieuwe Stroom Foxton Library and stopping berm mowing in urban areas.

Staff cuts were also made, with some roles disestablished, and a sinking lid policy applied to other roles, meaning they wouldn’t be replaced.

At the time, Wanden told the Horowhenua Chronicle the constraints around the current funding model for local government were “very frustrating”.

The NZIER report looked at four council reforms mandated by central government: the National Policy Statement on Urban Development and Medium Density Residential Standards; the Sale and Supply of Alcohol Act 2012; the National Policy Statement for Freshwater Management and improving recycling and food scrap collections.

Several unfunded mandates will be coming into effect soon, without any new funding, the report said.

One of those unfunded mandates will be introduced with the Proposed Local Government (Water Services Preliminary Arrangements) Bill, which will require councils to develop a water services delivery plan and other requirements.

Wanden said a key issue for the Horowhenua district was around water services, which required a lot of money and resources.

“We’re trying to get the best solution, and I think we don’t often get support for doing that work.”

Proposed changes to the Emergency Works policy for NZTA would shift an extra $70-$95 million in costs to councils to fund emergency work on roads.

The Proposed Local Government (Electoral Legislation and Māori Wards and Māori Constituencies) Amendment Bill requires a poll at the next election, with a potential cost impact of some councils having to complete a representation review three years earlier than would otherwise be required.

The report said these new unfunded mandates would likely see rates rise higher in the future.