Why 40 years of council mergers have failed to deliver – Nick Clark

For 40 years, New Zealanders have been told that fewer councils mean better government, and for 40 years, the evidence has refused to oblige.

Until 1989, New Zealand had about 850 elected local government bodies. Councils sat alongside elected water catchment boards, pest destruction boards, harbour boards, drainage boards and electricity supply boards. The democratic granularity was sometimes confusing and occasionally inefficient. It was also the deepest civic infrastructure in the country.

That year, the fourth Labour Government swept it away. Some 249 city, borough, district and county councils became 73 territorial authorities. Most special-purpose boards were consolidated into 13 newly established regional councils. The reform was justified solely on theoretical efficiency grounds. No serious case was made that the bodies it abolished had been doing their jobs poorly.

In 2010, Sir John Key’s National Government did it again. Eight Auckland councils became one supercity governing 1.8 million people through 20 councillors and a mayor. The same efficiency case was made. A 2025 analysis by TDB Advisory found that Auckland Council’s real per capita spending had risen 34% in the 15 years since the reform. A promised post-implementation review was never undertaken. Voter turnout in Auckland’s 2025 local elections was 29.3%.

Between 2017 and 2023, the Ardern-Hipkins Labour Government extended the pattern across other sectors. Twenty District Health Boards, each with elected members, were rolled into Health New Zealand in 2022. Sixteen regional polytechnics were merged into Te Pūkenga in 2020.

Three Waters would have consolidated the country’s drinking water, wastewater and stormwater functions into a small number of regional water services entities. More than 30 mayors organised against it, and the programme was reversed at the 2023 change of Government.

The pattern crosses party lines, with Labour and National making the same kinds of moves with the same lack of evidence.

Last month, the current Government announced the next round, called “Head Start”. RMA Reform Minister Chris Bishop and Local Government Minister Simon Watts gave councils three months to put forward their own merger proposals or have mergers imposed on them. Again, the justification is efficiency in theory. And once again, hard evidence that efficiency will be achieved in practice is lacking.

Forty years of this trajectory have produced predictable results. New Zealand is one of the most centralised countries in the OECD and one of the most consolidated, with one territorial authority per 79,000 residents, against Switzerland’s one per 4000. The Government’s own Infrastructure Commission sought the efficiency gains consolidation was supposed to deliver and could not find them. Its 2022 report, Does Size Matter? found no clear relationship between council size and cost efficiency.

Regional councils will carry on until the 2028 local elections. After that, their functions will be taken up by unitary councils, territorial authorities that also perform regional council functions. Auckland, Gisborne, Nelson, Tasman and Marlborough are current unitaries. Under Head Start, they will become the default.

Managing water catchments, land drainage infrastructure and pest control are critical activities that require strong focus. They will be lumped in with higher-profile local council activities such as roading, rubbish, libraries and parks, potentially repeating the mistake with water services. These services were neglected for years in favour of more visible issues, until burst pipes and disease outbreaks made the neglect impossible to ignore.

Other countries have come at this problem from the opposite direction. The Netherlands has established waterschappen for catchment-scale water management, with their own powers and functions distinct from those of municipalities. Switzerland has regional-level structures in its 26 cantons. Other European countries use special-purpose sub-national bodies for functions that do not fit within ordinary municipal boundaries. Single-purpose elected bodies are not a relic of a dark past. They are the right architecture for functions where geography does not neatly match the territorial unit.

In 2016, the New South Wales Government proposed reducing the number of councils from 152 to 112. There was substantial local opposition and court challenges. The programme ended at 128 councils after the state Government had abandoned many of the mergers. The promised efficiencies did not arrive. Peer-reviewed analyses showed no reduction in council spending after forced amalgamation.

New Zealand’s 40-year retreat from local democracy has not delivered what its proponents promised, and the next round will not deliver either. The right direction is to reverse the retreat. We need more elected local bodies, not fewer. We need more local authority over decisions that affect daily community life, and stronger accountability mechanisms for how that authority is exercised.

Cabinet will decide which Head Start proposals to progress later this year. Three Waters showed that local opinion can move a Government when Wellington’s logic is wrong. There are two months left in which to act. That is not long, but it should be long enough to put forward a different proposition.

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