Councils must focus on core business - Key

Prime Minister John Key says it is not a council's job to fund projects the Government had decided not to. Photo / Greg Bowker

Councils may have to bow to central government's preference as far as some local activities go, with Prime Minister John Key today saying it was not a local body's job to fund projects the Government had decided not to.

Local Government Minister Nick Smith yesterday released details about planned changes for the sector, including legislation to redefine the role of local bodies.

Dr Smith said councils' focus should be on local services, rather than ones that should be provided by central government, and the plan made that clear.

"Having local government with about 4 per cent of GDP involved in every possible area is not that efficient or effective, we're better to have them focused on things that only they can do and doing them really well,'' he said.

Legislation will be introduced to Parliament in May to amend the Local Government Act to replace references to the "social, economic, environmental and cultural well-being of communities'' in the purpose clause, and rewritten to make councils' new purpose "providing good quality local infrastructure, public services and regulatory functions at the least possible cost to households and business''.

However, the change has raised questions about council activities that cross over with central government responsibilities, with speculation some will be canned altogether.

Mr Key did not shy away from the possibility today, saying he wanted councils to focus on their core business.

"In narrowing their purpose clause, it may exclude them from providing those services, or at least challenge their thinking about whether those services should be provided,'' he said.

"One has to ask the question, if central government isn't providing those services, then really should local government step in and fill the breach? Because there might be a very good reason why central government hasn't done it.''

Auckland Mayor Len Brown is among those who have questioned what could be lost with the reforms, saying it would not be acceptable if the changes meant a council had to stop plans around social activities, or aspects to the city such as roading or public transport.

Speaking to media this morning, Dr Smith argued that the reforms were not being taken too far.

"The key new test that councils will need to apply in the way that they spend money is that there is a public good,'' he said.

"The current constraints are basically negligible, they can do everything. In my view, there is still a lot of room for councils in the way in which they define those public local services, and the way in which they define that local infrastructure to provide all of the things our communities would want our councils to provide.''

New fiscal responsibility requirements, and plans to allow easier council amalgamations are also among the reforms announced yesterday.