Digest No. 1977
Local Government Act 2002
Purpose of local government
The Act amends the purpose of local government statement in the Act. At present this reads: “ to enable democratic local decision-making and action by, and on behalf of, communities; and …”to promote the social, economic, environmental, and cultural well-being of communities, in the present and for the future.”
The Bill replaces the second arm of this statement with the following: “to meet the current and future needs of communities for good quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.”
The Bill also defines the term “good-quality”, in relation to local infrastructure, local public services, and performance of regulatory functions, to mean “infrastructure, services, and performance that are … efficient … and … effective … and … appropriate to present and anticipated future circumstances” (Part 1, Clause 7, amending Section 10 of the Act).
The Bill amends the provisions of the Act relating to reorganisation proposals. The provisions are extensively amended. Amongst the changes are those relating to who may make a reorganisation proposal, when a reorganisation proposal is prohibited and the contents of a proposal.
At present, the Act provides that a reorganisation proposal that involves the alteration of a boundary or the transfer of a responsibility may be made … by an affected local authority, by the Minister; or “by a petition signed by at least 10% of the electors of the area subject to the proposed reorganisation:”.
Under this Bill, a reorganisation application may be made by any person or organisation, including (but not limited to) one or more affected local authorities, or “any body or group with an interest in the governance of the area or areas that the reorganisation application relates to” or the Minister
The Act contains no particular exceptions to this. The Bill provides that no person may make a reorganisation application if the application relates to a local authority that has been the subject of a reorganisation scheme and the application, if it were made, would have been made during a period (being not greater than three years) specified by the Commission (see Clause 30).
The Bill provides in much more detail than in the Act for the matters that must be included in an application and provides a much more detailed and prescriptive description of the criteria for the assessment of proposals.
The Bill authorises the modification of certain statutory requirements during the period beginning when the Local Government Commission gives public notice of a final reorganisation scheme and ending when the fate of the scheme is determined (Part 1, Clause 10, Schedule 1 to the Bill, inserting New Schedule 3 into the Act; Clause 11 of the Bill, inserting New Section 24A into the Act).
Measures and expectations to be specified
The Bill provides that the Minister of Local Government may, by notice in the Gazette, specify measures and expectations relating to the Local Government Commission's performance of its functions and exercise of its powers (Part 1, Clause 14 inserts new section 31A into the Act).
Role and powers of Mayors
In relation to the role and powers of mayors, the Bill provides certain powers to appoint deputy mayors and chairs of committees (Part 1, Clause 16, inserting New Section 41A into the Act; cf. Section 9 of the Local Government (Auckland Council) Act 2009, which sets out the role and powers of the Mayor of Auckland).
Remuneration and employment policy
The Act sets out the activities of local authorities that must be carried out in accordance with Part 1 of Schedule 7 of the Act. To this list is added the activity of adopting a remuneration and employment policy (Part 1, Clause 18, amending Section 48 of the Act; Clause 24 amends Schedule 7 of the Act).
Powers of the Minister of Local Government
The Bill provides for the power of the Minister in relation to a local authority. These are for the most part available where a defined problem has occurred as follows:
a matter or circumstance relating to the management or governance of the local authority that detracts from, or is likely to detract from, its ability to give effect to the purpose of local government within its district or region; or
the consequences of a state of emergency (within the meaning of section 4 of the Civil Defence Emergency Management Act 2002) affecting, or recently affecting, the local authority's district or region; and include
a failure by the local authority to demonstrate prudent management of its revenues, expenses, assets, liabilities, investments, or general financial dealings in terms of any parameters or benchmarks prescribed by regulations made under Section 259(1)(dc) (described below under “regulations”); and
a potential problem within the meaning of first two matters here bullet-pointed; and
“to avoid doubt”, two or more of these problems
The interventions range from advisory (Crown Review Team (New Section 256), Crown Observer (New Section 258) to managerial (Crown Manager (New Section 258B), Commission (New Section 258D) (Part 1, Clause 21, substituting Sections 254-258 of the Act and inserting New Sections 258A-258T into the Act).
Regulations to define prudential management
The Bill provides a new regulation-making power to authorises the Governor-General to make regulations that prescribe parameters or benchmarks for assessing whether a local authority is prudently managing its revenues, expenses, assets, liabilities, investments, and general financial dealings (Part 1, Clause 22, inserting new paragraph (dc) into Section 259(1); cf Section 101 of the Act).
The Act sets out the information required to be included in long-term plans, annual plans, annual reports, and pre-election reports of local authorities. The Bill makes certain amendments including a requirement for a local authority to include in its annual report for the financial year ending 30 June 2013, and each following financial year, a report on employee staffing levels and remuneration (Part 1, Clause 25, amending Schedule 10 of the Act).
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