Minister won't intervene in 'dysfunctional' West Coast council

Tuesday, 26 November 2019

Local Government Minister Nanaia Mahuta says the Westland District Council will be 'closely monitored'.

Local Government Minister Nanaia Mahuta has U-turned on threats to impose a Crown Observer on a 'dysfunctional' West Coast council.

But the Westland District Council will still be 'closely monitored' by the Government, she says.

Westland mayor Bruce Smith welcomed the news as a 'good result'. An independent review had made 17 recommendations, which staff had since implemented, and a new audit and risk committee with an independent chair had been set up.

Mahuta wrote to the council in July and September this year, expressing concern about poor processes, dysfunctional governance and management, non-compliance with policies, and natural hazard management.

Westland mayor Bruce Smith says the oversight group is a good thing.

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The letter followed an auditor-general inquiry that raised serious concerns about a decision by Smith and councillor Durham Havill to build a $1.3 million stopbank at Franz Josef without the backing of the full council, and without consulting experts or conducting a proper procurement process.

Mahuta raised issues including privacy, poor process around the election of two deputy mayors, complaints against Smith to the auditor-general, a Serious Fraud Office investigation of a senior manager, resignations of members of the council's management team, and recent defamation and code of conduct proceedings against councillors. There were also allegations of uncontrolled expenditure, misleading statements around the council table and information being withheld from councillors.

She told them she intended to appoint a Crown observer.

Things then went quiet until Tuesday, when she released a statement. It said she 'cautiously acknowledged' the council had made progress.

Local Government Minister Nanaia Mahuta has advised the Westland District Council she intends to appoint a watchdog because of governance concerns. (Video first published in July 2019)

It is not a total back-down.

Mahuta said due to the scale and nature of the issues, the council would benefit from oversight. She had asked an existing oversight group to help the council improve more.

The Department of Internal Affairs would chair the oversight group and work with other agencies on the terms of reference.

'They will provide valuable guidance to the council and they can escalate significant problems to me if necessary. Given the steps taken by the council, I am reassured they are on the right path to being a well performing council,' Mahuta said.

The council had taken steps to improve including setting up a governance committee to 'provide transparency of decision making, putting in systems and frameworks for policies and processes, and learning from past experience'.

She said she had considered appointing a Crown observer because she was not confident the council's management was effective due to the number and frequency of issues being raised.

She would consider intervention in future if a significant problem arose, she said.

'In the meantime, the council will be closely monitored. The threshold to use intervention powers is necessarily high. Although problems still exist on the council, they do not amount to a significant problem … many councils around New Zealand suffer from similar issues.'

Smith said the oversight group was 'a good thing'.

'We answer to Internal Affairs anyway. It's a good result and we will be able to carry on business as usual,' he said.

'The minister has acted really professionally. She received complaints and allegations – lots and lots of them – and when she provided us with the information and the details of the complaints we were able to respond as a council.

'She was able to consider that response and the things that have changed in the last year or two and make her decision not to appoint a Crown observer.'

Former councillor Gray Eatwell, who had been raising concerns with the Government about the council's decision-making and lack of transparency since 2017, said he was frustrated with the delay in action.

He said the council and its mayor had breached its statutory obligations, particularly in the way the stopbank was built in Franz Josef, but there had been no consequences.