Ahead of the impending reforms to New Zealand’s resource management system, the Government has announced proposals that will set a process for delivering a structural reset for local government (or at least consider opportunities for a structural reset). The rationale for the proposals is that there are too many layers of local government, with unnecessary and costly inefficiencies present in the system. 

The proposed “reset” process will provide for a new decision-making body, tasked with taking over regional council functions and then identifying opportunities to streamline governance and service delivery, with clear signals pointing to a desire for some form of amalgamation.

In this update, we explain and comment on the Government’s proposed changes, including the introduction of Combined Territories Boards (CTBs), how Regional Reorganisation Plans (RRPs) will be developed, and what these reforms could mean for councils, communities, and future governance structures.

How are Regional Councils different from Territorial Authorities?

While the Government’s draft proposal states that “having two types of councils operating in the same area is complex, confusing, and costly”, regional councils have several distinct statutory responsibilities, including:

• managing rivers, lakes, the coastal marine area, and air quality;
• environmental regulation under the RMA;
• regional transport planning;
• implementing Treaty settlement commitments administered by regional councils;
• owning and managing assets, which includes port companies; and
• civil defence and emergency management.

The Government’s proposals will not, at least initially, disestablish regional councils - they will continue to exist. However, they will be governed by a different elected body, made up of the elected mayors of territorial (city and district) authorities (discussed below).

The pointed messaging in relation to duplication, inefficiencies and a lack of understanding about what it is that regional councils do, may indicate a preference for unitary authorities, which have the functions of both a territorial authority and a regional council. The fact that unitary authorities can choose whether to prepare a RRP is another potential signal that this structure is seen as more effective overall.

Proposed new CTBs to replace regional councillors

The Government’s proposal is that regional councillors are replaced with CTBs, comprising the mayors of all territorial authorities within a region. The CTBs would take on the governance responsibilities of regional councils, until any structural change occurs. While proposing CTBs, feedback has also been sought on whether a Crown Commissioner should be used, or whether CTBs should include a Crown Commissioner, and what powers they may have. 

The use of CTBs is a substantial change, as it would replace the democratically elected regional councillors with a group of mayors elected by their districts and cities instead. This change will lead to decision-making complexities, as the larger councils will - naturally - expect more sway. The proposals recognise this by suggesting a population-based weighted approach to voting, with adjustments to be made by the Local Government Commission to ensure smaller communities are represented effectively. In addition, for certain resource management matters, a resolution of the CTB would only pass if it was supported by members representing more than 50% of the region’s population, and more than 50% of the CTB members.

Based on the Local Water Done Well implementation to date, proportionate ownership and decision-making arrangements need to be progressed sensitively, with a degree of compromise a practical and political reality. Legislating this form of model without there being buy-in from the relevant councils, or room for flexibility, may create significant tension.

An obvious issue with grouping based on regional boundaries is that some territorial authorities exist across two regions - examples being Rotorua Lakes Council and Waitaki District Council. In light of this problem, the Government has suggested either:

• Adoption - the isolated population is ‘adopted’ by an adjacent district within the same region (for example, that population of Rotorua Lakes District within the Waikato region is ‘adopted’ by the adjacent Taupō or South Waikato District); or
• Additional representation - the isolated population is represented across the CTBs their district is aligned with, with either a proportionate voting share or their territorial authority local ward councillor representing that population on the CTB.

It is also proposed that any committees established by Treaty settlements will remain, and existing Māori engagement processes will continue. However, regional Māori constituencies will be dissolved, and the Government is not proposing that there be specific Māori representation on CTBs.

Regional Reorganisation Plans to set out how councils within a region will work together

CTBs would be responsible for the creation of RRPs, with the intention that this occurs within two years of their establishment. An RRP would set out how the councils propose to work together to deliver effective and efficient services. In effect, it is a stronger (and potentially legislated) version of the triennial agreement required under section 15 of the Local Government Act 2002, which already requires councils to develop processes to delivery services to more than one district.

While the Government’s proposals place importance on the development of RRPs, the consultation material states that before this exercise is undertaken, the Government will review regional council functions and test whether they should be reallocated to another agency (likely central Government), or if they are necessary at all.

Once completed, RRPs would be assessed by the Local Government Commission against certain criteria (which are framed in broad terms, and include “affordability now and in the future”), and would ultimately need to be approved by the Minister for Local Government.

The consultation material sets out a range of options for future service delivery, varying from shared services arrangements to joint council-controlled organisations (CCOs). CTBs also have the option of proposing reorganisation, to form one or more unitary councils for a region.

Interaction with resource management reforms

The Government will shortly introduce its two new bills that are proposed to replace the RMA. It has linked these proposed changes to those reforms, by proposing that the CTBs (if established) should be the decision-making body under the new regime.

The impending resource management reforms are expected to be largely based on recommendations for RMA reform from the Expert Advisory Group (EAG) (see our previous FYI and report here), although the EAG envisaged that regional councils and territorial authorities would be retained, albeit with collaboration. Rather than needing to constitute joint committees to achieve the required collaboration, or develop bespoke panel or other decision-making structures, the CTBs (as an effective joint committee) could provide a clearer mechanism for that collaboration to occur.  

The counter view is that for decisions on regional spatial plans, or natural environment plans, the CTB may not be the right decision-maker. These decisions, while being policy in nature, will involve the reconciliation of independent expert evidence, difficult decisions in relation to hazard risk and potential retreat, and consideration of the views of vested stakeholders and communities. By conferring this responsibility on CTBs there would be a clear risk of introducing political preference into matters that may better fit independence, and so the approach taken by the new acts will be worth keeping an eye out for.

Our comments

Overlap with other reforms

While the messaging behind these announcements is no different to what we’ve all heard before - “the system isn’t working” - the amount of reform currently under development means that it is difficult to put a finger on the intended end goal for local government. Between water reform, resource management, building, public works, emergency management, changes to the Local Government Act and a number of other proposals (including potential rates capping), a vast number of existing council services are already being impacted, leaving questions about what effective, efficient delivery in fact looks like.

In practice, timing will be critical. The more overlap there is between the various reforms, and the CTBs attempting to develop their RRPs, the less certainty there will be overall. From experience, if there is no (or reduced) certainty about outcomes, there may be more appetite to retain the status quo. If, however, the RRP was developed to take account of the outcome of the various reforms, a coherent system-wide view may be possible.

Empowering mayors

A key feature of the proposed reforms is an expansion of the role, power, and responsibilities of mayors of territorial authorities, who will be both a mayor and a member of the CTB. That could mean a significantly greater workload for mayors, who will have dual (and potentially competing) governance responsibilities, as well as being involved in developing RRPs.

The ability for CTBs to be able to function successfully will, in our view, be strongly influenced by whether mayors are able to work together at a regional level.  If they can, it may reduce the likelihood of legal disputes between regional councils and territorial authorities. On the other hand:

• The potential for tension within a CTB remains. For example, the proposal that CTBs will be responsible for “assessing the performance of current functions across councils in the region” will require members of the CTB to judge the performance of the others’ councils, as well as their own;
• The Government’s proposals do not address whether a mayor will be required to obtain any prior authority from their territorial authority for the decisions that they may make as a member of the CTB. If such authorisation is not required, it could be a separate source of disputes; and 
• Regional councils’ functions include regulating activities carried out by territorial authorities, including water takes and wastewater discharges. Careful management will be required to avoid conflicts of interest.

Considering future amalgamation or aggregation of service delivery

The requirement that CTBs develop RRPs with a focus on identifying where there are possibilities for delivery or aggregation of services across a region aligns with the broader direction of the resource management reforms, as well as the Government’s signals in relation to water reform (albeit that the local water done well legislation deliberately provided for local choice).  

However, the Government does not appear to have a clear view as to how any aggregation or amalgamation should occur, and has instead left it to CTBs to decide. Although that may provide CTBs with greater flexibility, the costs of considering how best to organise local government in their region will ultimately be borne by ratepayers.

It remains to be seen what input local communities will have into any future reorganisation. The Local Government Act 2002 includes a mechanism by which local government can propose reorganisation. However, a key hurdle to the use of those provisions is the need to consider “the degree and distribution of demonstrable public support for the proposed changes”. It is not clear how relevant public support may be to the contents and implementation of RRPs, or the Minister’s ultimate decisions.

We also consider it unusual that the development of RRPs is not slated to involve regional council input or expertise. While the proposal appears to be based on the perception that (district and city) mayors are more widely known to the public and therefore have the appropriate mandate, by displacing regional councillors in favour of CTBs, there is a potential loss of regional experience that could usefully inform such decisions.

Greater role for the Crown in local government?

There is some tension in the proposals between local decision-making and greater input from central Government. For example, the potential involvement of Crown Commissioners and the requirement for Ministerial approval of RRPs will give central Government a potentially greater role in local government decision-making, which will need to be balanced against the strength of community views on any RRP proposals.

On the other hand, Crown representatives could assist to moderate the politicisation of CTBs, promote best practice governance, and help ensure that the mayors on a CTB work well together. In thinking ahead to regional spatial planning, our view is that some Crown involvement with the CTBs (ie by NZTA, KiwiRail and others) could be of real benefit, to achieve substantive alignment between infrastructure planning and urban growth, and support the development of the longer-term, certain, spatial blueprint that our regions require.

Next steps

Feedback on these proposals, and the questions that the Government has asked within its discussion document (available online here), is due by 20 February 2026.

If you would like to discuss the implications of these reforms, or need assistance with preparing feedback, please contact one of our experts listed below.

Special thanks to Ben Russell and Ashe Wainui-Mackle for their assistance in preparing this article.