Reforms set out clearer pathway – whether councils like it or not

Thursday, 27 November 2025

Ministers Simon Watt and Chris Bishop announce the local government reform plans earlier this week.

Campbell Barry is head of local government and partnerships at Agite Consulting, and the former Mayor of Lower Hutt.

OPINION: The Government wants to abolish regional councillors, but that’s not why this proposal is being touted as the biggest shakeup to local government since 1989.

Step one of the proposal is simple on paper. Regional councillors would go, and the preferred model is for a committee of mayors to take over governance of regional councils. This is a smart move because it leans into the mandate mayors already hold from their communities, and for many of them, the chance to have a greater say at the regional level will be appealing.

Where things get interesting is step two. Every region must prepare a reorganisation plan within two years. These plans would map all council functions, assess performance, identify opportunities to improve delivery, and then propose new models. Reorganisation could mean shared services, joint council-controlled organisations (CCOs), or even full amalgamation of councils. Importantly for amalgamation, there is no requirement or trigger for a binding poll. Removing that hurdle means councils can more confidently consult their communities on options and put forward a proposal without the fear it will be sunk by parochial politics. Instead, the Minister of Local Government will have final sign off on the final plan.

Minister Chris Bishop announcing the scrapping of regional councillors

“Simplifying Local Government” is, in essence, taking the same approach as “Local Water Done Well”. It is not forcing a single national model like Labour’s Three Waters reforms, which might have made the most sense from a policy point of view, but did not land politically. Instead, it outlines a process, sets expectations, and makes it clear the status quo is not an option.

In many ways the approach favours pragmatism over perfection. It moves the ball forward while leaving councils with room to shape what comes next. It does risk producing suboptimal outcomes, like getting more than 40 water entities under Local Water Done Well, but perfection can be the enemy of progress.

One unknown is how the next two to three years will play out for regional councillors, given their roles would be no more. We risk losing a lot of knowledge and regional governance perspective, including in vital areas like environmental management and public transport. As the system is reshaped, we should take care not to sideline that experience.

There are challenges. Step one assumes mayors can absorb a significant new governance role on top of their current responsibilities. While Combined Territories Boards will be able to establish committees and appoint territorial councillors to help share the load, it will still require additional capacity, and a major shift in mindset. Navigating the competing interests of territorial and regional councils, urban and rural councils, big and small councils, will be very difficult in the short term.

Change fatigue is also real. Councils are still navigating water reform and have dealt with years of shifting policy direction from successive governments. Councils are also under huge pressure to lower costs while delivering more. Many will be rewriting long-term plans shortly. Business as usual risks being more challenging than ever. Layering a two-year regional reorganisation process on top of that will stretch many councils to their limits.

For smaller, rural and provincial councils, the anxiety will be familiar. When four water entities were proposed for all of New Zealand under Labour, the less public-facing driver of opposition by so many elected members was the fear that it would lead to broader amalgamation. This new proposal is explicit that territorial councils will have to seriously consider amalgamation.

The irony, of course, is that many expected this to be the moment regional councils were swept away – a path that would have been far more complex than it sounded. In reality, it could make them the one left standing. Once regions map functions and test new delivery models, it is the smaller territorial councils that are more exposed. Regional councils already hold most of the natural region-wide functions and are the logical anchor for any future structure.

Campbell Barry is the former mayor of Lower Hutt.

The other elephant in the room is what this proposal does not address – local government’s broken funding and financing model. While there is an opportunity to drive efficiency, reduce duplication, and improve delivery, there is a real risk we spend huge amounts of time, money and energy reorganising structures without fixing a core problem. If we don't address the funding settings, we risk simply rearranging the deck chairs on the Titanic.

Yes, there is work underway on regional deals, congestion charging, GST sharing on new builds, development levies and other tools. All of that needs to be pulled together. In fact, it could be the most powerful carrot the Government has. Regions that put forward bold, future-focused reorganisation plans could be rewarded with access to choosing new funding mechanisms or revenue tools. That would shift the conversation from compliance to opportunity, and it would encourage councils to take the big swings rather than defaulting to the smallest possible change.

Despite the challenges and fish hooks (in which there are many), the direction is hard to argue against. This proposal sets out a clearer pathway for regions to design something better, while avoiding the political traps of the past.

Whatever happens from here, the ground has shifted. The Government has made it clear that local government cannot stay as it is. Councils can shape the change, or have the change shaped for them.