The Governance and Administration Committee reported back on the Local Government (System Improvements) Amendment Bill earlier this week, with relatively minor changes to the Bill introduced earlier in the year.

As a recap, the Bill was introduced to address the Government’s concerns about a lack of financial discipline in local government, and to refocus on the “basics” (see our previous FYI here).

Helpful changes to the proposed purpose statement?

As introduced, the Bill sought to replace the “four well-beings” with a version of the purpose statement as it was in 2014–2019, with some modernisation. No substantive changes have been recommended to the modified purpose, although the reference to local infrastructure, services and regulatory functions being “most cost-effective for households and businesses” has been replaced by the simpler “cost-effective”, with an associated definition of that expression.

A number of submissions were made that identified uncertainty with the phrase “most cost-effective for households and businesses” – as it was not clear whether that should be tested based on financial costs, or broader costs and benefits. It appears that the recommended change has been made to provide greater clarity, and remove the risk of challenge if a decision was not, prima facie, the “most” cost-effective.

The new definition of “cost-effective” engages several considerations, including value for money, the effective use of resources, and the total costs and benefits of all decisions and actions. While there is still room for debate as to how this concept is to be applied at the time of decision-making, the inclusion of broader considerations is a welcome change, as it better reflects the multi-faceted nature of the matters Councils need to bear in mind when making decisions about local infrastructure and public services (including matters other than financial costs).

Putting aside the removal of the four well-beings, which allowed councils the ability to ask whether they should decide to act, rather than whether they could, our overall view on the reframed purpose and new definition is that it may not add much to the existing relevant considerations for council decision making. This is because current provisions of the LGA, including the definition of “good-quality”, already place focus on or require efficiency, effectiveness and ensuring appropriateness to present and anticipated future circumstances.

Core services remain largely unchanged

Apparently minor, but potentially important, changes have been recommended to the core services in section 11A. These include the addition of a reference to “waste management and minimisation” as well as the addition of “community… facilities” (additions underlined).

These additions provide clarity for local authorities and ensure that there is no question that “community facilities” are a legitimate activity for councils.

The opportunity to develop a more comprehensive list of core council activities and services has not been taken up. While this results in a relatively short list of core services, they are only a matter to have regard to, and the list does not constrain the purpose in section 10.

We were surprised to see the reference to “civil defence emergency management” retained, instead of any reference to the wider concept of managing natural hazard risks. While there is no question that “civil defence emergency management” is a function of local government under the Civil Defence and Emergency Management Act 2002 (which is to be subject to its own-long-promised-reforms soon), the recently announced National Adaptation Framework highlighted a commitment to “focus local authorities on core services including managing natural hazard risk through improvements to the local government system” (see our previous FYI here). Whether this was an oversight of this Bill, or the National Adaptation Framework, remains a question.

As many natural hazards can lead to incremental or wider impacts that do not necessarily result from emergency events (for example, land stability from rising groundwater levels or increasing risk of landslides as a result of the changing climate), our view was that reference to managing natural hazard risk was a better framing.

Access to information for elected members

The Bill as introduced included provisions codifying the existing rights of elected members to access information that they ‘need to know’. This Bill introduced a process that involved a request to the Chief Executive for information, who would then decide whether provision of documents was reasonably necessary.

The Committee has recommended the addition of another step, if the Chief Executive refuses to provide documents. In that situation, the elected members could take the matter to the governing body (ie. the elected members as a collective) to make a final decision.

The introduction of this step seems problematic and misunderstands the respective roles of elected members and council officers. In effect, elected members will determine their own ‘need to know’, which undermines the principle. It may also be unworkable in many cases. For example, it is not clear how these requirements would operate where the Chief Executive refuses all elected members access to information which is not relevant to their decision-making (such as highly confidential documents, or documents relating to employment matters). Elected members may also need to determine the question of access without actually seeing the documents, which is practically unworkable. Careful advice will be required to navigate this process, if it is engaged.

Other minor changes

The Committee has also recommended:

• A requirement for the Minister to consult with relevant local authorities before introducing new reporting and performance regulations, amending the standard code of conduct or amending the standard standing orders. Previously the Bill only required such consultation where it was considered appropriate.
• A requirement for Chief Executives to explain any changes to the standard code of conduct to their members in a meeting that is open to the public.

Conclusion

While several recommendations have been made that will likely simplify expectations and process requirements for local authorities, the narrower framing of the purpose statement still brings with it room for interpretation and challenge. Councils will need to consider how they approach decision-making to ensure alignment with the new purpose statement, particularly given the heightened interest in the use of public funds, and government narrative on fiscal discipline by councils.

Get in touch 

If you have any questions about this article, please get in touch with one of our experts.

Special thanks to Jack Apperley and Jasmine Setchell for their assistance in preparing this article.