The new Local Government (Auckland Council) Act, recently passed under urgency, provides for the governance structure of the Auckland Council. The changes from the initial Bill which received its first reading back in May are significant. Among other things, the Act adopts the recommendations of Parliament's Auckland Governance Legislation Committee which are intended to substantially increase the powers and responsibilities of local boards. In this update we briefly look at some of the issues relating to those local boards. What are local boards?
Local boards represent the so-called 'second tier' of governance in the Auckland Council structure. They are special creatures of statute. As the commentary to the Bill stated 'These boards are a new form of governance body'. Importantly, a local board is unincorporated (ie unlike a company or the Auckland Council itself, a local board does not have separate legal personality and cannot sue or be sued in its own right). A local board is not a local authority or a community board or a committee of the Auckland Council. It will not itself own property or employ staff. A local board is a decision making body.
What does the Act say about local boards?
The Act endeavours to put the 'local' back into local government, without compromising the benefits of 'one council' for the Auckland region. However it is important to recognise that the structure contemplated by the Act remains a work in progress. Much of the detail governing the relationship between local boards and Auckland Council is still currently being developed. This further detail will appear in the third piece of reform legislation, expected to be introduced in November this year.
In the meantime, the concept of 'shared governance' promoted by the Royal Commission has returned to prominence. The governing body of Auckland Council and the local boards are to sit alongside each other and have distinct roles, rather than operating in a typical hierarchical relationship. Decisions on local matters made by local boards will legally be decisions of Auckland Council. However, it is each local board that will be responsible and 'democratically accountable' for its local decisions (as opposed to the governing body of Auckland Council).
Decisions relating to regulatory matters are to remain the responsibility of Auckland Council. But, decision making responsibility for all 'non regulatory' matters should be allocated to local boards unless Auckland Council determines that the decisions are best made regionally. We understand the present intent of Government is that the next piece of legislation will prevent Auckland Council removing an allocated function of a local board without that board's consent. It is also envisaged that the third Act will put in place a dispute resolution mechanism to manage disputes between Auckland Council and local boards.
Annual budgets for local boards will be set by Auckland Council having regard to a range of factors prescribed by legislation. Each local board will also have a 'local board agreement' with Auckland Council and is required to prepare and adopt a three year plan for its area in accordance with the special consultative procedure set out in the Local Government Act 2002.
Ensure no loss of regional focus
Clearly, a great deal of thought, hard work and leadership will be required to ensure that Auckland Council is not distracted from its regional focus by the management of multiple relationships with local boards. To some degree, the flavour of the Royal Commission's approach to what it referred to as 'local councils' has now been adopted in the context of local boards (particularly, the concept of shared governance). The challenge will be applying these concepts in an environment with 20 to 30 or so local boards, rather than only six local councils as the Royal Commission had recommended.
Local board responsibilities
One of the first key matters will be the initial allocation of local board responsibilities and local budgets which are intended to apply from 1 November 2010. While the commentary to the Bill refers to this process, the Act itself gives no guidance. Again, we expect that this may be one of the matters which will be dealt with in the third piece of legislation. Fundamentally, the Agency will need to decide which 'non regulatory' decisions are best made at a local level and which decisions should best be made at a regional level. The decision by the Legislation Committee not to specify particular decisions which should be made 'locally' in the Act is good (although it will be interesting to see whether this approach is carried through to the third piece of legislation).
With its 'on the ground' knowledge of each current council's activities, the Agency should be better placed to make such judgements. A good example relates to the provision of libraries. Decisions relating to libraries are referred to in the commentary to the Bill as being among the functions which Parliament expects would be delivered by local boards. While some decisions relating to libraries may well be local, much work has been done in the region in recent years to improve the regional operation and co-ordination of libraries including development and implementation of a regional information technology platform. Clearly, the allocation of decision making responsibility will need to reflect the local and regional aspects of delivery of this particular service.
As with every task allocated to the Agency, timing will be a significant issue. This is particularly the case with local boards as the Local Government Commission is not required to determine the number and boundaries of local boards until 1 March 2010. Given this, it will be interesting to see the approach taken by the Agency. One approach would be to leave most functions remaining with Auckland Council until the structure is, to some extent, bedded down and it becomes clearer where responsibility for decision making will best lie.
Looking ahead, clearly issues of equity between local boards will need to be carefully managed. In allocating funding between local boards, Auckland Council is required to balance a range of competing factors such as the level of dependence on local government services and facilities in each local board area with the rates revenue derived from that area. Accordingly, we would expect the content of Auckland Council's local boards funding policy to be hotly debated across the region and in particular amongst Auckland Councillors and members of local boards. The Act refers to a funding policy which will apply from when the LTCCP for the period from 1 July 2012 is adopted but the Act contains no details of what is to occur in the interim period. We assume that the third piece of legislation may provide that the initial funding policy applicable from 1 November 2010 (together with initial local board plans and local board agreements) will be developed by the Transition Agency.
Roles and responsibilities of Auckland Council staff
Post 1 November 2010, Auckland Council staff will also need a clear understanding of their roles and responsibilities in relation to local boards (as noted above, local boards themselves cannot employ staff). We anticipate these issues are currently being worked through by the Transition Agency. A few staff will presumably have dedicated responsibility to a local board (to assist with administration and representation issues). A range of other staff will presumably continue to be based at regional centres providing support to one or more local boards within defined areas. The remainder of Auckland staff will presumably have responsibility for delivery of centralised services and addressing regional issues.
Strong leadership by the CEO of Auckland Council will be critical to address these issues and to deliver effective management of the local board structure. The Act specifically provides that the Auckland Council CEO is responsible for a range of matters relating to local boards including implementing the decisions of the boards and implementing each local board agreement. Effective leadership of each local board, through its chairperson, will also be essential.
Finally, the many decisions to be made by the Transition Agency and Auckland Council relating to local boards involve a high degree of discretion and judgement. To avoid the possibility of pointless and costly disputes and litigation, a strong relationship between Auckland Council and the local boards will be critical. Adopting the language of the Royal Commission in the context of local councils, the success of the relationship will depend on:
- the cultures of each elected body. In particular, whether the elected members of Auckland Council and the local boards take on board the fact that they are all part of the same organisation and act accordingly; and
- the extent to which the members of the Auckland Council understand that a local voice and influence is essential, in order for the organisation as a whole to function effectively.
As always, we will keep you posted as the process of reform continues.
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