Following the local government reform consultation in late 2025 and early 2026, the Government has this week announced two further proposals. Those are:

• The creation of a “head start” pathway for local government reform, which gives groups of councils a three-month window (until August 2026) to put forward proposals to reorganise into larger unitary authorities; and

• A “backstop process” (which applies after the 2028 local elections), that will require the restructure of all councils that chose not to use the “head start” pathway.

The new proposals provide further scope for territorial authorities to lead reform in their regions, with a not-so-subtle signal about what will happen if they do not take this opportunity, but leave little time to develop agreed reorganisation proposals.

Feedback on the previous proposal 

Feedback was mixed. There was broad agreement on the need for reform, but significant concern about the proposed model. Key themes included:

• Support for the principle of reform, but not necessarily for the CTB model as proposed;

• Concerns about democratic representation and loss of regional voice with the removal of elected regional councillors;

• Scepticism about CTBs as a governance model, including risks of conflicts of interest and unmanageable workloads for mayors;

• Delivery risk and reform overload, given concurrent resource management and related other reforms; and 

• Concerns about increased central government control and reduced local autonomy.

Today’s announcement - the “head start” pathway

The “head start” pathway will allow groups of territorial authorities (that is, city and district councils) and/or unitary authorities to submit proposals to create new unitary authorities that cover part or all of a region (and where sensible, may include councils from different regions).

Proposals submitted through the “head start” pathway will:

• Need to meet listed eligibility criteria. In particular, proposals must come from groups of two or more territorial authorities and/or unitary authorities (not regional councils). The group must represent either a majority of affected territorial authorities or a majority of the affected population; and

• Be assessed against five criteria: deliverability; support for the new planning system; simpler governance; economies of scale; and maintaining a strong local voice.

Cabinet will decide which proposals to progress in-principle later in 2026, with final decisions following consideration of detailed proposals to be made in early-2027. The Government will then introduce legislation in 2027 to implement its selected proposals in advance of the 2028 triennial local body elections.

A “backstop” will apply to councils that elect not to make use of the “head start” pathway

Regions and councils that do not progress through the head start pathway will be subject to a backstop process, which will set a standard approach to reorganising local government and will likely seek to require simplifying structures and reducing duplication. However, details of that backstop process are not yet confirmed.

The Government has indicated that it will make further announcements in 2027 regarding the backstop, with legislation supporting reorganisation to be enacted before the 2028 local government elections. However:

• The Government has indicated that there will not be elections for regional councillors at the 2028 triennial elections, with current councillors either being replaced by a new structure (for example, a CTB) or remaining in their roles until the end of the 2028 term; and

• Any reorganisation required under the backstop process will not occur until during the 2028 triennium.

In summary, all councils will be subject to some form of reorganisation in the coming years. The choice for councils is between:

1. submitting their own proposal now through the ‘head start’ pathway, or 

2. waiting to see what central government imposes through a backstop process. 

As Local Government Minister Simon Watts commented in the Government’s announcement, the choice for councils is “lead your own reform, or we will do it for you”.

Initial comments 

• This is a clear, and significant, shift from the previous CTB-only model. The previous proposal envisaged regional councils being replaced by CTBs, which would then develop RRPs, the “head start” pathway provides a process that allows groups of councils that support a particular reorganisation proposal to move directly toward establishing a unitary authority, albeit that any proposal will rely on Cabinet support.

• The legislative mechanism remains unclear. It is not yet known whether the Government intends to legislate separately for each proposal accepted by Cabinet (as with previous one-off amalgamations, like Auckland Council), or whether it will insert a standalone process into existing legislation that provides a framework for proposals to follow.

• It appears that a group of territorial authorities could submit a proposal that includes a third territorial authority, even if that third council does not support the proposal. For example, under the Government’s eligibility criteria the submitting group need only represent a majority of affected territorial authorities or population of the ‘affected area’ included in the proposal. While that may assist with ensuring reorganisation proposals have a suitable scale, as it may allow larger or like-minded councils to draw other councils into a proposal, it may also be highly contentious where a proposal is not supported by all of the councils that it would affect (or deliver a structure that can maintain strong local voice).

• The ‘head start’ pathway, as described, is focused on the creation of unitary authorities. Some regions may still prefer the CTB-style concept as previously described (ie greater integration without full amalgamation). Whether such proposals would be accepted under this pathway is unclear.

• In practice, the three-month timeframe for councils to submit proposals to the Government under the “head start” pathway is very tight, and the practical challenges of securing agreement across multiple territorial authorities within that window should not be underestimated. Related to this point is the high degree of public interest in the development and adoption of such proposals by councils, which may carry with it an expectation of public consultation.

• The concurrent sequencing of these changes with resource management reform is especially problematic. In particular, the signalled timing means the new legislation that will enable any restructure proposal (with the practical implementation a further complex step beyond that) will not be in place in time to relieve councils within a region from establishing arrangements that can support the development of a proposed regional spatial plan. As a result, while announced on the basis that it will simplify resource management reform, it will not achieve that in the short term unless resource management reform implementation is slowed down to cater for local government reorganisation.

• Finally, the implications for newly or soon-to-be established water organisations will need to be carefully considered. If, for instance, a single or multi-council owned water organisation becomes - by way of reorganisation - owned by a single unitary council, then there could be motivation to amalgamate the separate organisations into one. However, the timing of the restructure of the local government may lead to real complexities for the ongoing water reforms, particularly if the water organisations will be at different stages of establishment, transition and operational maturity. 

Next steps 

Councils have three months (until 9 August 2026) to develop and submit outline proposals that they wish to be considered for the “head start” pathway. Officials will then assess proposals, with Cabinet decisions expected later this year and final implementation ahead of the October 2028 local elections.

If you would like to discuss the implications of this announcement, or how it may affect your council or region, please get in touch with one of our experts listed below.

Special thanks to Ben Russell for his assistance in preparing this article.