September 2019

Welcome to our second localism newsletter.  For new readers LGNZ, working collaboratively with organisations such as The New Zealand Initiative, is seeking the views of New Zealanders on whether the balance of roles and responsibilities between central and local government is working.

In the developed world New Zealand is unusual for the very large role central government plays in the provision of public services and the very small role played by local government.  By international standards the distribution of governmental functions is “unbalanced”. 

LGNZ is looking to get greater balance by empowering communities, strengthening local and regional governance and positioning central government to focus on those matters which can only be addressed nationally. 

Your views are needed now.  LGNZ wants to know your views on how best to empower communities.  Check out our Discussion Document and tell us what you think.

Has NZ always been so centralised?

When you talk to people, especially officials working for central government, the frequent response is that centralism is the NZ way; that we have always been this way, and it is a necessary result of our settler and colonial history.  That a small population needs a strong central government to enable development to happen.  The argument may have a logic but it is not the full story. The following graph shows how the size of local and central government were roughly similar for the 19th and early 20th Century until central government begins to grow rapidly:

Figure 1

Figure 1: Tax shares compared

Figure 1 shows that until 1920 the amount of tax raised by local and central government was largely in balance.  After 1920 central government grew extensively while local government is little changed, with tax as a share of GDP slightly below what it was 100 years ago.

What largely explains the growth in central government is the development of the welfare state and the decision by central government to take responsibility for functions like education, health, social welfare and housing.  In many other developed countries such social welfare roles were shared between local and central government. 

Sir Howard Bernstein speaks on City Deals

The English approach to localism includes what is called “City Deals” – a strategy whereby councils are encouraged to create “combined authorities” in order to be able to negotiate the transfer of powers and functions with central government

Problem solving close to the ground rather than policy making from a remote national capital has the benefit of customisation.A local solution can be a more efficient use of resources since it is aligned with the distinctive needs of a particular place (Bruce Katz, Jeremy Nowak, “The New Localism”)

The first and best known City Deal was with Manchester City Region (see Krupp 2015).  The roles, responsibilities and funding transferred from central government to the combined authority included skills development, employment, housing, re-offending and justice as well as health and social services.  As chance would have it Sir Howard Bernstein, the former CE of Manchester City and one of the architects of the deal negotiations, was recently in New Zealand where he spoke to a group of enthusiasts in Wellington.  Some of his key observations were:

  • The plan to achieve a city deal was a long term one that began with an assessment of the ability of the city to meet its future challenges.
  • A strategy was developed that was subject to peer review by highly regarded urban development specialists. The independent review was critical for getting support from Whitehall officials;
  • They needed to convince central government that they could be a trusted partner;
  • The case was argued on the need to have neighbourhood based integrated commissioning of all public services in order to reduce demand for tertiary health services;
  • Arguing for the transfer of hospitals and health service gave their application greater credibility;
  • George Osborne, former Chancellor of the Exchequer, was an essential champion within the Government who was able to deal with “blockages” in the civil service.

By seeking additional powers and responsibilities the councils were responding to the failure of the existing “top down” way of delivering and commissioning services. Sir Howard’s argument was that the needs of Manchester could only be properly met by the city itself having a greater say in the commissioning of services.  It was a case of elected members aware of their public duty of care realising they did not have power to make a difference.

Local champions

As the 2019 local election campaign warms up we are finding some candidates campaigning on the themes of localism and a commitment to put this into practice if elected.  K Gurunathan (Guru), who is campaigning for re-election as mayor of the Kapiti Coast District Council, has endorsed LGNZ’s “riding the localism wave: putting communities in charge” by standing on a policy of strengthening the role of community boards within the district.  Guru’s vision includes creating a network of neighbourhood support groups across each community and ensuring each board is “armed with the cutting edge analysis” of the state of their community.

Australian academics seek the devolution of local government powers

“To stimulate an agenda of devolution and localism. The time has surely come to confer a right for communities and neighbourhoods to initiative the establishment of local entities with comer real decision-making authority”

A new report published by LogoNet, a network of individuals, academics and researchers in Australia, entitled “Place based governance and local democracy: will Australia Local Government Deliver?” calls for Australians to have the power to establish community boards, as able to be exercised by citizens in New Zealand.  In the same way the LGNZ’s call for localism is both strengthening the role of local government along with the empowerment of their communities, LogoNet is concerned with what councils can do to strengthen democracy.  They have a “placed based” and collaborative governance approach.

Developed as part of a two year “open dialogue” process the authors look at the factors that are driving change, such as declining trust in big government and the speed of global change, and document different approaches to enabling greater citizen participation and self-government. 

The report can be downloaded here.

Is devolution in the UK back on track?

While the British PM is making the news over Brexit it appears that he might get that country’s devolution programme back on the “rails”.  He has just pledged to give metro mayors in combined authorities (such as Manchester) control over their rail budgets, timetables, tracks, trains and stations. 

Coincidentally the Local Government Association has just published a report, in light of declining passenger numbers, demanding that councils be allowed to control bus services in their areas.  They point out that local polling clearly shows that the “vast majority” of citizens want councils to take over control. 

New report argues for stronger local leadership

In May this year the UK based think tank Localis released a significant new report “Hitting Reset - a case for local leadership”.  The report is based on research involving interviews with council leaders, policy officers and central government officials.  One of the members of the Advisory Panel was the recently appointed Hutt City chief executive Ms Jo Millar.

One of the problems with centralisation is that any individual failure in local government is seen as systemic (Hitting Reset)

The Report is makes recommendations on what would need to change to strengthen local leadership; what is needed to reinvigorate local economies and political structures and what changes are needed to the welfare state to address changing demographics and expectations.  In short a roadmap for decentralisation.

The report can be downloaded here.