It’s clear that local government has reached a turning point. Reform is no longer theoretical, it’s happening, and in many respects it’s long overdue, writes Tararua District Council Mayor, Scott Gilmore.
I’ve not heard anyone credible argue that things are fine as they are. Communities are frustrated, councils are under strain, and affordability has become the defining issue in almost every conversation about local government.
The real question now isn’t whether change is needed, but whether we can shape that change in a way that delivers better outcomes while protecting the connection between councils and the people we serve.
There are many ways councils could become more efficient, effective, and affordable. Amalgamation may be the right answer in some places, particularly where geography, identity, and economies already align.
In other areas, it risks weakening local voice and distancing decision makers from communities. One-size-fits-all solutions are dangerous, especially in a country as diverse as ours. The direction from central government seems to favour amalgamations, but forced mergers will almost certainly meet strong pushback from councils and the communities they represent. That resistance is understandable and a reminder that local engagement matters.
This concern has been well articulated recently by Federated Farmers, who warned against rural interests being dominated by larger urban centres in consolidated governance models. That perspective resonates strongly with me. Local democracy and local understanding matter, particularly in provincial and rural communities where councils are often the most visible and accessible layer of government.
At the same time, the local government sector needs to be honest with itself. We didn’t arrive at this point overnight, and reform isn’t happening in a vacuum – public confidence in councils has been weak for a long time.
The NZ Local Government Survey produced by LGNZ in 2014 and repeated in 2017 showed overall council reputation sitting at just 28 out of 100, with little change over that period. The weakest areas related to value for money, spending decisions, and financial management. What’s striking is the absence of any similar survey since 2017. Sentiment hasn’t improved, yet the sector failed to confront the issue when it had the opportunity.
There’s a tendency to argue that dissatisfaction is purely the result of recent rates increases but, in reality, that frustration has been building for years and has now reached a tipping point. Reform is political, but it’s political because it’s popular with ratepayers. In many cases, councils were close to losing their social licence, and too often the warning signs were ignored.
That failure to read the room has real consequences. When councils now talk about reducing rates increases in response to government direction, it begs an obvious question – why did it take central government stepping in for that shift to occur? Too often though, when trying to minimise rates increases, councils have focused on trimming visible services that annoy people, rather than tackling the underlying structures that drive long-term cost pressures.
I firmly believe that shared services sit at the heart of that problem. New Zealand has 67 city and district councils all delivering broadly the same services, usually in isolation. The duplication is obvious, expensive, and absurd. I’ve been advocating for greater shared services since I was elected to council in 2022 and campaigned on it during the mayoral election.
It remains difficult to explain why the sector hasn’t embraced the efficiencies it could bring, given the clear potential for savings and improved capability. Shared services don’t need to be limited to existing regional boundaries though, and councils should be free to collaborate across regions where doing so will achieve better outcomes for communities.
In early 2025, I wrote an opinion piece arguing that shared services were the fix – not amalgamation. The warning was simple, if councils didn’t make change themselves, it would be imposed on them. I didn’t expect that point to arrive so quickly, but it has.
The Government has now effectively presented the sector with a choice: greater amalgamation, or meaningful expansion of shared services. For now, councils still have agency, but that window won’t remain open indefinitely.
Part of the reason change has been so slow is structural. Councils operate as monopolies so, when costs rise, they’re passed directly to ratepayers who have no alternative provider. Unlike most markets, there’s little natural pressure to innovate or become more efficient until a crisis point is reached. That crisis point is now here.
Water services are a clear example. They were effectively removed from councils because, collectively, we failed to manage them at a scale that was affordable and sustainable. Roads may well be next. The Simplifying Local Government consultation papers explicitly reference regional roading authorities as an example of shared services. That’s not accidental. When central government is funding a significant proportion of local roads, it has both influence and responsibility to ensure maximum value for money.
The challenge will be ensuring that any new structures remain responsive to local needs. That’s why councils should be proactively shaping shared service arrangements now, rather than waiting for decisions to be made for them.
Alongside structural reform, legislative changes such as the Local Government Systems Improvements Amendment Bill are important. Clarifying what councils should and shouldn’t be responsible for will help restore focus and accountability.
Councils are frequently drawn into areas that properly sit with central government, often without funding. Clearer boundaries will reduce cost pressures on councils and help rebuild trust in local government, though I do expect much more knocking at central government’s door when people are directed there for things councils can no longer do.
Perhaps that pressure could return some of these responsibilities to us, along with appropriate funding.
Affordability sits at the centre of all of this. Rates capping reflects the reality that many households, farms, and businesses are already under pressure. My biggest concern with rates capping was the potential flow-on impacts to core infrastructure, but with water costs now separated it’s much more doable, particularly if councils create other real efficiencies. Change will be tough, but councils have an opportunity to be far clearer about priorities and find ways to deliver within constraints. This may be the incentive needed to drive more innovation.
Taken together, the reforms ahead represent a genuine opportunity. Change is long overdue, but it doesn’t need to come at the expense of local voice or community connection. This is local government’s chance to build a better system, one that delivers value, restores confidence, and reflects the different needs of different places.
If we fail to do that, those decisions will be made for us. If we succeed, we can shape a future that works for our communities and for the generations that follow.