Douglas & Hubbard on Auckland Council
July 25th, 2009 at 9:55 am by David FarrarThe Herald reports:
Sir Roger Douglas wants ratepayers to be able to shop around for the best local council, saying that being able to defect to one nearby even if they do not live there will invoke the spirit of competition.
Great idea.
Sir Roger told a parliamentary select committee considering legislation setting up Auckland’s Super City that there should be a flexible community council structure with ratepayers able to decide its size and even set up their own councils.
Groups of ratepayers who lived next to another community council should also be able to opt out and join another council.
“The capacity to change council will create competition for ratepayers, which is likely to see value for money being delivered by local government,” Sir Roger said.
Those who place a premium on low rates can get a Council that does that, while those who like enhanced community facilities can also get what they want.
Former Auckland City Mayor Dick Hubbard told the committee he strongly supported the proposed powers for the Super Mayor after his experience of being hamstrung by the “power-hungry” Deputy Mayor Bruce Hucker.
Mr Hubbard said he was elected on a vision, but then obstructed in implementing it by Dr Hucker who had a voting bloc on the council. For this reason, the Super Mayor must be given the power to hire and fire the deputy.
I agree with Dick Hubbard. The Mayor needs a team he or she can work with. The Council still gets a veto over policy and spending decisions, but an effective leadership team is a good thing.
Related posts:
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- Mayor Hucker back in charge
- Tui Billboard on Hubbard
- Mayor Bruce Hucker
July 25th, 2009 at 10:06 am
Those who place a premium on low rates can get a Council that does that, while those who like enhanced community facilities can also get what they want.
That’s an interesting idea, but surely choice would be limited by the ratepayer’s geographic location within their own council’s boundaries?
With the residents at the edges more able to switch councils that residents slap-bang in the middle of a council area. So…pro-choice..as long as you live here or here or here…but not here or here. Not a very level playing field.
Vote:July 25th, 2009 at 10:14 am
“an effective leadership team is a good thing”
Yes, that is clearly illustrated by the main parties in national politics at the moment.
Vote:July 25th, 2009 at 10:25 am
I’m interested that Sir Rogers views on smaller and more financially independent community councils seem contrary to those of Minister Rodney Hides.
This free exchange of ideas and democratic debate is quite refreshing really
Vote:July 25th, 2009 at 10:25 am
Roger Douglas is out to lunch with that loony tunes idea
Vote:July 25th, 2009 at 10:43 am
“Sir Roger Douglas wants ratepayers to be able to shop around for the best local council, saying that being able to defect to one nearby even if they do not live there will invoke the spirit of competition.”
- sounds great in theory but what of long term planning and strategy when a neighbourhood block can defect to a (presumably) next door local borough. I can just see the politicians focussing on immediate concerns and publicity-popular issues. The NZ Herald will be the most powerful influencer (even more than Hucker!!)… Sorry Roger, I empathise with your philosophy but more thought is needed on this one….
Vote:July 25th, 2009 at 10:47 am
Hubbard is right. The Mayor of Auckland is likely to be the second most powerful political position in the country. If the royal commission was set up to ‘solve’ Auckland’s decisionmaking process then a super strong mayor is vital.
Vote:July 25th, 2009 at 10:47 am
Can’t see how this is going to work, in practice. I work for a large company which has a number of well-known brands and a variety of businesses all operating under a federal model. Each business has its own CEO and they all report to the group CEO who reports to the board. The difference between that model and this proposition, is that each separate business pulls broadly in the same direction and is capable if they so chose, of taking advantage of the economies of scale offered by the group.
This proposition instead encourages each separate council to compete against each other, poaching ratepayers (a.k.a. customers) and undercutting each other in order that the fittest survive. Granted, it does put power into the hands of the ratepayers but doing so, reduces the opportunities of the economies of scale otherwise offered and also importantly, increases the complexity of service delivery by encouraging a variety of models to be applied to say, refuse management. Complexity is a significant hidden cost in any business and arises when variations in offerings and delivery models aren’t designed from scratch to use the same common elements as much as possible. This model actually encourages complexity to grow and that’s why I can’t see how it can work, operationally. Politically, it’s good, but operational improvements is where the SuperCity is going to stand or fall and if these aren’t immediately apparent within the first few years of operation, people are going to stand back and ask: ‘whyever did we bother to do this in the first place?’
Vote:July 25th, 2009 at 11:02 am
Douglas is absolutely right and it is not a new idea. When I was involved with Independent Devonport during and after the 1989 local body amalgamation the idea that small competing local bodies are more responsive, innovative and cost effective was well-documented and central to our campaign.
Ironically, it was John Banks as Minister of Local Government who blocked Devonport regaining independence at the last moment by changing the law to make it impossible for residents to elect to secede.
reid, economies of scale are a matter for the provider, not the purchaser. Small local authorities can purchase services from large private providers just as efficiently as large authorities. There is no reason for most local body services to be provided by bureaucrats.
Vote:July 25th, 2009 at 11:06 am
Nutty idea. Given councils are or should be providing physical services (water, sewerage, roads, footpaths and planning oversight etc) how would this work if 11 ratepayers on one street opted to change and 1 didn’t? Complexity and associated cost will make it unworkable. I’m all for the super city and better efficiency but if the execution gets cocked up the fallout will be severe. If rates and user charges don’t go down and stay down and service levels don’t remain constant or improve this will kill the Nats at the next election. It is a very high risk strategy. Outcomes are extremely measurable to individuals, and its a real issue that has the potential to seriously offend the man in the street unlike many other reforming issues the govt is embarking on. Better to force efficiency on councils by benchmarking, proscribing eligible activities, centralising core functions.
The worst possible outcome is for the changes to go thru and a numpty mayor and set of left wing councillors get elected who proceed to screw up by expanding the council into inefficient areas of business, because the Nat government will get blamed for the outcomes.
Surely a better approach would have been to legislatively narrow the scope of councils, force them to focus on core services and reform things like ARC and the regional transport clowns. Hope I am wrong, but I see nothing but ongoing political troubles with a super city.
Vote:July 25th, 2009 at 11:11 am
gomango, if you think rates and charges will go down as a result of the Super City you are in cloud cuckoo land.
There is zero possibility that will happen. The transition costs will be hundreds of millions of dollars and hundreds of thousands of man-hours all of which you will pay for. Then the Super City will be less efficient and less responsive than the smaller entities and will invest in bigger and fatter white elephants.
Rates, charges and borrowing will all continue to increase faster than inflation.
Vote:July 25th, 2009 at 11:35 am
Alan, reading between the lines, you appear to assume that all local council services will be outsourced. I think that’s a flawed assumption not least because its fraught with political difficulties since it opens Hide up to the very accusation the lefties have made from the start. I agree that some services will be in the short term but remember that this move has to pay dividends within a three-year window otherwise it’s goodbye Nats.
The biggest opportunity for immediate gain is to rationalise the existing local services under one umbrella. So for example, instead of having separate bodies conducting their own parking operations you have one Auckland-wide operation using best-practice, which from my understanding would have to be Wellington’s model which has exceptional revenue-gathering. You do the same to everything, from library management to parks to refuse to consents to back-office functions, etc.
Eliminating legacy process and systems duplication, excess staff and process and offerings complexity from all of those services is the only thing that will allow you to immediately reduce rates. If you attempt to instead, tender and outsource those services, you just delay implementation for years and buy a tremendous political fight that will be in full flight by the time of the next election.
Just as a BTW, I cannot understand why it is that some people leap to conclude that outsourcing is always the most cost-effective option when after all, the organisation you’re outsourcing to is there to make a profit from the contract. I mean, most operations aren’t rocket-science and its a fairly simple matter to apply common-sense to improve your own services which you already own and have built up and invested in. Why is that some people think that it’s impossible to apply the same rules to your own operation that the outsource provider does?
The phenomena is most staggering to me when a company employs someone like Delloittes or Cap Gemini to give some advice. I mean, all they do is get twenty-somethings on low wages to lookup a generic report from their database, throw in a few customisations, run it quickly by one of the senior partners and then charge horrendous fees for the privilege. And the company thinks it’s really great. The fact their own existing staff could have produced exactly the same work for a quarter of the price, never seems to occur. Just crazy.
Vote:July 25th, 2009 at 11:36 am
Alan – read my post more closely (or maybe I should have been clearer) – that is exactly what I believe. What i said is the proof of success is that rates and charges go down and services dont.
There is a very small chance that the transition etc will work as advertised and the new regime will be maaaaarvellous. But by far the most likely outcome is that it will be badly executed and become a festering wound for the national govt. In my own business I always plan a new project using the law of thirds:
- it will cost 3 times as much
Vote:- it will take 3 times as long
- the benefits will be one third of what you expected
July 25th, 2009 at 11:39 am
Douglas show an intellect head and shoulders above his colleagues in the ACT Party. Surely if this choice of councils is to allow free choice to all they will have to be small councils. Yes Roger another great thought lets go back to 700 small council reverse the amalgamations of the 80s and 90s
Vote:July 25th, 2009 at 11:42 am
“if you think rates and charges will go down as a result of the Super City you are in cloud cuckoo land”
Alan, as I said, if rates and charges don’t go down, the Nats are dead.
The transition costs will need to be met by the govt from the consolidated fund and that’s what I assume is going to happen.
Vote:July 25th, 2009 at 12:35 pm
I am reminded of a great cartoon with Hubbard and his deputy meeting. “Mother Hubbard” whines the deputy, “Mother Hucker” growled the mayor.
[DPF: Same - one of the great cartoons]
Vote:July 25th, 2009 at 12:45 pm
Wash your mouth out with soap.
Nothing that plonker says is of any value.
Vote:July 25th, 2009 at 12:47 pm
reid, there is no chance rates and charges will go down as a result of Super City. They may go down if other idiotic laws and regulations are reformed.
“Eliminating legacy process and systems duplication, excess staff and process and offerings complexity from all of those services is the only thing that will allow you to immediately reduce rates.”
You’re joking. Those are exactly the processes that are going to cost hundreds of millions of dollars.
No-one is saying outsourcing is always best, but where there are efficiency gains from size it usually is.
gomango, sorry, you are right. I didn’t read you far and carefully enough.
The chances of the transition working as advertised are zilch, especially since neither the Commission nor Hide have a clue about the issues and problems as far as I can tell.
Vote:July 25th, 2009 at 1:24 pm
“reid, there is no chance rates and charges will go down as a result of Super City.”
Alan, I’m not saying they will. I’m saying if they don’t, then the Nats are history.
“You’re joking. Those are exactly the processes that are going to cost hundreds of millions of dollars.”
Well duh. It’s not a question of doing them or not. Not doing them is not an option. It’s how you get them done, that’s the issue.
Vote:July 25th, 2009 at 1:44 pm
reid, my point was that they are not going to be easy, quick or give you an immediate rate reduction.
Vote:July 25th, 2009 at 2:10 pm
I don’t think anything to do with the operational amalgamation is going to be easy or straightforward, Alan.
All I’m saying is that doing what I’m suggesting gives you the best chance of making the quickest possible return, given the political difficulties of outsourcing any of the significant operations that are currently done within the various councils. Operational rationalisation may or may not make enough of a material difference to be noticeable in the rates by the time the next election comes round, but it is the best chance out of the various alternatives on offer.
“The chances of the transition working as advertised are zilch, especially since neither the Commission nor Hide have a clue about the issues and problems as far as I can tell.”
I don’t disagree, on current reading. And this is because no-one is yet talking operationally, they are only talking politically. I’ve said since the day this was first mooted the success stands or falls not in the politics but in the operational changes, and it’s now been what, six months?, and no-one in the power structure has yet begun to make those noises…
I suspect what they might do is to sell off one of the significant operations and use that money to reduce the rates in the short term and hope that people buy that. If they try to do that, I think they’ll find that people are now wise to the downstream results of that process, given the failure of the electricity reforms that were sold on precisely that basis and which have not resulted in long term price decreases but in fact, have resulted in not only the opposite but also in the degradation of the infrastructure that the taxpayer originally funded.
So I think we agree Alan, that the outcome is not looking pretty, at this moment in time. Perhaps however, we just differ on the best way to achieve the desired result.
Vote:July 25th, 2009 at 3:38 pm
The US has a flexible system in that it is easy for towns within Counties to “incorporate” and become full municipalities – what we call councils. Similarly annexation – what we call amalgamation – is very simple and is routine. A developer will build a fringe town which remains in the developers management until it is a going concern and is then annexed into the adjoining City. We make such changes a real drama.
If you want to read about the outcomes of mega mergers overseas go to my web page and search under say Toronto and Montreal and then read my submissions to the Select Committee.
Vote:All the recent mega mergers have been dramatic failures. However, if the committee takes note of the submitters and we end up with a Greater Auckland Council to look after region wide issues and maybe thirty fully fledged councils to take care of local affairs then it could work although the transition costs will always be high.
And Wendell and I predicted some time back that the most likely outcome of mega mergers is a left wing super Mayor – Red Ted being a classic example. And sure enough Len Brown is already ahead of Banks and this margin will grown unless they restore full local governance.
The Transition authority has already appointed Leila Harre (well known) and Craig Shearer. Craig is ex ARC and their most ardent promoter of central planning and Smart Growth. (i.e, Dense thinking). Again the North American mega mergers were all designed to promote Smart Growth by giving a single Mayor power to decide where everyone in the region should be allowed to live.
I do not know who advised the government but they clearly did look outside New Zealand for their info.
July 25th, 2009 at 4:57 pm
I agree with all of that, Owen.
I also predicted that Banks would fall to anti-Auckland City sentiment by the rest of the electorate. Brown is best placed to capitalise on that so long as his health permits.
Vote: