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CCNZ: Any progress on amalgamation in 2016?

Peter Silcock Chief Executive Civil Contractors New Zealand (CCNZ)

Maybe for local government 2015 will be remembered for the things that didn’t happen, says Civil Contractors NZ CE Peter Silcock. The big question is will 2016 be any different?

The past year will be remembered as a time when local government amalgamation proposals took a major step back – or should I perhaps say, a step sideways – after amalgamation proposals in Wellington, Northland and Hawkes Bay all came to nothing.

While Hawkes Bay voters delivered a strong message by comprehensively rejecting merger plans. then Local Government Minister Paula Bennett had her own very strong message at the Local Government New Zealand conference when she said that while forced amalgamations might be off the table progress was still expected.

The Minister particularly focused her comments on the opportunities for cooperation and the possible creation of council controlled organisations (CCOs) around two key council assets – transport and wastewater. These are areas in which many Civil Contractors New Zealand (CCNZ) members provide maintenance and construction services to local authorities.

Minister Bennett’s key point was that change is required if we are to achieve long-term sustainable growth. While most of us would not debate that point we also live in the real world where, at times, identifying the change required is the easy part. The tough part of the job is being able to sell it to enough constituents to be able to make it happen.

Issues of size

The local government sector is facing huge challenges. Over the past year the problems and potential solutions have been well debated but there has been a distinct lack of progress on making the step changes required to deal with the big issues of local government reform, better asset management, replacing aging infrastructure, better procurement practices and sustainable funding.

One of the concerning trends in 2015 has been the assumption that size will solve all our problems. While in some situations size can provide advantages, big is not always beautiful. If there was any doubt about that, you only needed to look at the results of a 2015 survey undertaken by the NZ Council for Infrastructure Development (NZCID) that highlighted that some of our largest councils rated below average in terms of procurement practices.

The consolidation and bundling of too many contracts can also reduce opportunities for small and medium sized contractors to secure a sustainable supply of work. To maintain a viable, innovative and progressive sector we need to ensure there are opportunities for contractors of all sizes. Maintaining that balance of large, medium and small contracts is critical for any council’s long-term procurement strategy.

In an environment where councils are facing considerable funding challenges, local authorities simply can’t afford – and ratepayers will not tolerate – suboptimal asset management and procurement practices.

During 2015 CCNZ provided comments on a number of draft council and CCO procurement policies. What this and the NZCID survey have highlighted to us is that it is not the size of the council or CCO that determines the quality of procurement. It is often about people. It is about strong and steady council leadership, and a capable engineering and procurement team that is allowed to get on with the job.

So in 2016 I hope the focus will be on developing procurement and asset management capability within councils.

Health and safety

People should also be the focus early this year as councils come to grips with their new responsibilities as PCBUs (Persons Conducting a Business or Undertaking) under the new Health and Safety at Work Act which comes into force on April 4.

The Act creates new responsibilities for clients (such as councils) that are contracting construction work. Contractors and councils will need to work together to meet their respective responsibilities.

In engaging contractors, councils have an opportunity to support people on their construction sites by adopting the Construction Safety Council’s new “ConstructSafe” competency framework and assessment tool. This is not another training programme. It simply sets the level of competency that people need to have to safely enter a construction site (whether you are a carpenter, civil contactor or a timber salesperson). The system has been developed by the whole construction industry and is supported by an online tool that quickly assesses people’s competency.

ConstructSafe has been comprehensively tested on a variety of construction sites, large and small, horizontal and vertical. It creates a single competency standard and ensures that everyone on site has the knowledge to protect their own safety and the safety of their workmates.

We are providing more information about ConstructSafe to councils and the scheme will be officially launched on April 4 to coincide with the new Act coming into force. Councils that require the use of the ConstructSafe system on their sites will be taking a major step in meeting their requirements as a PCBU.

New Civil Trades Regime

The Construction Safety Council also plans to roll out competency levels for specific trades, supervisors, and health and safety managers later this year. We believe this will make a significant difference to our safety record and are looking to local authorities to help us get the system adopted as quickly as possible across the whole industry.

CCNZ will also roll out its new Civil Trades Regime this year. The new qualification a “civil trades person” recognises the skill and expertise of people who work on our civil infrastructure. It places them alongside carpenters and plumbers, for example, who hold both qualifications and practical experience in their trade.

This is a critical building block if the civil construction industry is going to be able to attract and retain the skilled, productive and motivated staff to build and maintain our civil infrastructure. This will be a step change for the industry and will enable us to market careers rather than just jobs to prospective employees. The tag line for this new qualification is “Qualified People – Quality Infrastructure”.

So maybe for local government 2015 will be remembered for the things that didn’t happen. The big question is will 2016 be any different?

Can the local body elections stimulate a change to the way we think?

Will we be able to break out of the focus on reducing debt and minimising rate increases to take on the costly challenges of renewing and developing our aging (yet invisible to the public) underground infrastructure?

Will we see some truly visionary infrastructure planning that integrates residential developments with our public transport and communications infrastructure, community health and education services and local work opportunities?

Can we step past the issues of 2015 to focus on our people, and creating and maintaining quality infrastructure?

This article was first published in NZ Local Government Magazine’s Perspectives 2016.

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