City mayors are pushing for new funding deals that would devolve more responsibility for infrastructure and social services to local communities.
Every time Hamilton mayor Paula Southgate meets with Chris Hipkins or one of his ministers, she puts the case for moving from one-off ad hoc funding packages to strategic co-funding agreements.
"I never miss a beat," she says.
It's not just Hamilton and its neighbours in the Waikato. Councils across New Zealand are arguing for these new "high-trust" deals. They are known by a range of names including city deals, town deals, region deals, community agreements, and growth deals.
READ MORE: * Review proposes new tools to finance local roads, parks and homes * Govt ‘open minded’ on paying rates for schools, hospitals * Bed taxes and road pricing get green light from Govt review
The Future for Local Government Review, which reported back last month, calls them place-based agreements – and they could change the way community infrastructure is funded.
This week at the big Local Government NZ conference in Christchurch, mayors and council representatives will consider how these might work – and they say they'll be listening closely and hopefully to speeches from the Prime Minister and Opposition leader Christopher Luxon.
The biggest hurdle is not the money – it's that term, "high trust".
"We are a long way off that at the moment," Southgate admits. "But we've had some really constructive conversations with both the current Government and the opposition parties to just get them to understand the pressures that Hamilton faces.
"We've made it quite clear to a number of visiting ministers that we need that city deal in our areas to help unlock the future of New Zealand. But we've also said to them that they need to do some thinking about where New Zealand grows, and where it doesn't. Not everybody can have everything, but we need to work smarter."
"It doesn't sound particularly revolutionary. But it is actually pretty uncommon, in New Zealand and around the world, for a range of government entities to get together and say, we're going to put all our money into one pot." – Linda Meade, Kalimena Advisory
In June, the local government review highlighted the lack of trust as one of the biggest problems. The current legislative framework for local government is highly prescriptive, its report says, reflecting low central government trust in the sector.
And that goes both ways. Every government changes the law to impose its own political view on councils' roles, investment priorities, and long-term strategic focus. "These changes have created uncertainty about central government’s intentions, eroding trust between central and local government," the report says.
The review recommends one more change to the Local Government Act to require central and local government to align wellbeing priorities and agree place-based investment plans.
"It was an appalling time in every Mancunian's life. It was devastating. It took us a long time to recover." – Sir Howard Bernstein, Greater Manchester
Place-based agreements are bespoke packages of funding and decision-making powers negotiated between central and local government and other local bodies, the report says.
"They are designed to drive long-term, large-scale wellbeing improvements at place in a way that shines light on local priorities. Agreements may be organised around a specific place – for example, with one or more region, city, or town – working to achieve a long-term vision for the area."
It says different forms of place-based agreements are already happening across the country, but they lack ongoing commitment from all parties.
"Place-based agreements can be refined and adapted over time as milestones are achieved and next steps are agreed," it says. "The development of place-based agreements is challenging and will take time. There will need to be room for some trial and error and a way to share learnings across the field."
From Manchester to NZ
The gold standard for city deals is Greater Manchester, in the UK. And it all emerged from tragedy. In June 1996, a powerful 1,500 kg bomb was detonated in the city centre by the IRA, injuring 212 people and causing devastating damage.
But out of that came a plan for regeneration, led by the council's visionary chief executive Sir Howard Bernstein.
Some people call the IRA explosion the best thing that ever happened to Manchester. Bernstein disagrees. "It was an appalling time in every Mancunian's life," he says, in a BBC interview. "It was devastating. It took us a long time to recover."
Sir Howard remembers a time of political compromise.
"We were a staunch Labour council but we knew the value of working with the Conservatives," he says. "We knew it was time to open up to market forces and investment and working across political lines. We put Manchester first."
The Manchester City Deal entailed increased decision-making powers in areas such as transportation, housing, planning, and skills development.
Central government and the Greater Manchester local authorities agreed to make significant investment in a plan comprising infrastructure projects, housing developments, transport improvements, and economic regeneration initiatives.
Part of this was the earn-back model, which allows Greater Manchester to retain a portion of the additional tax revenues generated from economic growth and investment in the region, to reinvest in further development projects.
The 10 councils that make up Greater Manchester worked together with Westminster politicians to design the strategy. It included rebuilding the city centre in a way that worked for its people, merging Manchester's two universities into one, and culminated in hosting the Commonwealth Games in 2002.
(And afterwards, Sir Howard's beloved Manchester City was able to move to what became the City of Manchester stadium.)
Kalimena Advisory director Linda Meade has just returned from Manchester, where she met with Sir Howard. “Cities are crucial engines of economic growth," he says. "Transport, housing, economic development, skills and job creation are best addressed at city-region level.
"Only by assuming greater freedoms and powers devolved from Whitehall can we begin to realise the full potential of our cities."
This week Meade is speaking to the Local Government conference in Christchurch about city deals, as part of a seminar on new ways to fund and finance local government.
She sees collaborations like Get Wellington Moving and the Christchurch rebuild as small steps in the direction of city deals.
Indeed, there are unmistakeable similarities between the experiences of Manchester and Christchurch. The new Te Pae convention centre, where the conference is being held, is one of the flagships of the rebuild.
And curiously, Christchurch Mayor Phil Mauger last week offered to host the 2026 Commonwealth Games, after the Australian state of Victoria pulled out due to ballooning costs.
Christchurch already had lots of facilities to enable it to host the Games in three years, and the city’s stadium and controversial Metro Sports facility would be finished by then.
He suggested Christchurch could “share the love” around the country, and that rowing and cycling could be held in Cambridge or Invercargill.
That timeframe may be a tad too ambitious, but it highlights the potential in combining local and national leadership and vision.
Meade asks: "What potential role could city or region deals play as a means to not only fund pressing investments and infrastructure, but also to reflect the aspirations of people and communities across Aotearoa New Zealand?"
For city deals to really work in New Zealand, she says towns and regions need to identify their competitive advantage, such as creative technologies, renewable energy, or advanced manufacturing like med-tech.
Councils must find mechanisms to effectively work together (Hamilton has been working with neighbouring Waikato and Waipa district councils to push its city deal) and they must commit to a set of principles for place-based investment, and outcome targets.
They need to agree on 'signature investments' and establish joint ventures that leverage competitive advantage. For example, in Wellington this could be Callaghan Innovation and Te Herenga Waka Victoria University of Wellington.
And they must focus on education and growing a skilled workforce.
"It doesn't sound particularly revolutionary," she tells Newsroom.
"But it is actually pretty uncommon, in New Zealand and around the world, for a range of government entities to get together and say, we're going to put all our money into one pot. And we're going to agree on a prioritisation process that is for the betterment of the entire region."
