The government is initiating a major shake-up of local government that could see the councils of the Wellington region, including Hutt City, amalgamate into a single larger authority.
Proposed reforms would abolish dedicated regional councillors and establish Combined Territories Boards (CTBs) made up of local mayors. These boards would be tasked with developing reorganisation plans for their regions, which could involve shared services, new council-owned companies, or the full merger of existing councils into new unitary authorities.
The move is part of a broader government strategy that includes several other levers designed to encourage amalgamation. Policies such as proposed rates capping, the controversial 'three waters' reforms, and significant changes to resource management are all creating an environment where councils may find merging a more attractive option.
Resource Management Act (RMA) Reform Minister Chris Bishop acknowledged that the reforms are geared towards creating larger councils. When asked if the changes would work best if boards ultimately decide to form unitary authorities, he said, “I think that is a fair summation of the situation”.
Local government voices concerns
The proposed changes have been met with caution from Local Government New Zealand (LGNZ), which has raised concerns about the increased workload for mayors. Dr Deon Swiggs, LGNZ's regional sector chair, said the added responsibility of regional governance could be overwhelming.
“Taking on the governance of regional councils would further add to this workload and could jeopardise the speed and quality of the reorganisation plans and the implementation of resource management reform,” Dr Swiggs says. He warns that the very purpose of the new boards could be undermined if mayors are stretched too thin to give the complex task of reorganisation the attention it requires.
LGNZ has suggested a transitional approach, recommending that regional councillors remain in their roles until the end of the current three-year term or until the new reorganisation plans are finalised. This, they argue, would ensure their valuable experience is not lost during a critical period of change.
We want the right expertise in the room so that the most significant changes to local government since 1989 are successful and enduring.
Is bigger really better?
While proponents of amalgamation often point to cost efficiencies as a key benefit, a 2022 report from the Infrastructure Commission challenges this assumption. The report, which investigated the link between council size and cost efficiency, found no evidence that larger councils are more efficient than smaller ones.
The commission compared spending in areas like road maintenance, building consent processing, and governance overheads but found no proof of economies of scale. “You would expect to see some cost efficiencies in areas like road maintenance or building consent processing where you should be able to do that a bit better or cheaper with more scale of an organisation - we didn’t find that in the data,” said Peter Nunns, the Infrastructure Commission’s strategy general manager.
Nunns clarified that while larger councils weren't worse, they performed “about the same on average” as their smaller counterparts. He stressed that leaders promoting amalgamation need to be transparent with the public about the real case for merging if cost savings cannot be guaranteed.
Lessons from Auckland's 'super city'
The most significant precedent for amalgamation in New Zealand is the formation of Auckland's 'super city' in 2010, when eight separate councils were merged into one. The success of this move remains a topic of debate. Figures such as Mayor Wayne Brown and former Prime Ministers John Key and Helen Clark have viewed it as a largely positive step, creating a more streamlined and unified city.
Auckland Council itself claimed in 2023 to have achieved savings of $2.4 billion since the merger. However, a closer look reveals a more complicated picture. Local government academic Dr Andy Asquith concluded that while the super city succeeded in creating unified leadership, it fell short on increasing democratic engagement, and any efficiency gains were “hard to determine”.
Economic analysis showed that while some initial savings were made, overall spending eventually increased. The number of staff employed by the new super city grew to be higher than the combined total of the eight councils it replaced. Furthermore, an investigation found that typical household rates bills in Auckland had climbed by 85% between 2010 and 2023, an average increase of 2.16% above inflation each year, casting doubt on the long-term cost benefits for residents.
Wellington's path to amalgamation
With the national framework pushing for consolidation, Wellington is now seen as a prime candidate for its own version of a super city. The idea of amalgamation is gaining traction, with many local leaders calling it “inevitable”. Recent non-binding referendums in Porirua and Lower Hutt revealed that a majority of voting residents were in favour of a merger.
Early discussions are already underway between the region's mayors. The likely outcome could be a ‘super-city-lite’ comprising Wellington City, Porirua, Hutt City, and Upper Hutt, with the Kāpiti Coast potentially joining later. The Wairarapa councils have signalled a desire to remain separate.
The debate comes as councils like Hutt City Council face immense cost pressures, making the prospect of shared services and resources appealing. However, the experience of Auckland shows that these benefits are not guaranteed. Issues like the divisive Petone to Grenada highway plan also highlight the challenges of balancing local interests with regional strategic goals, a problem that could be amplified in a single large bureaucracy.
As Wellington's leaders continue these discussions, they will need to persuade the public how a merger will concretely benefit them, particularly if creating a bigger council does not necessarily mean creating a more efficient one.
