The findings have been described as the most significant review of local government since the 1989 reforms and the 2002 Local Government Act.
They come as New Zealand responds to economic, social and environmental challenges exacerbated by climate-related events and infrastructure deficits.
The independent panel was established in April 2021 to advise the Government on building a resilient and sustainable local government system that was fit for purpose, flexible and incentivised to adapt for the future.
It also had the job of ensuring it had public trust and confidence, partnered effectively with mana whenua and central government, and actively embodied and upheld The Treaty of Waitangi.
The panel, chaired by Jim Palmer, has concluded local communities are not presently well served by the relationship between local and central government, and a reset in the relationship is required.
It has recommended local government and communities be empowered to build local solutions, as well as reform of The Local Government Act, and the establishment of a new Crown entity.
“Local government and communities must be empowered to build local solutions for national-level problems, with vital collaboration and funding from central government,” Palmer said.
“We recommend a new Crown department is established to manage the relationship between central and local government that clarifies roles, allocates resources and together deliver greater value for communities.
“We also recommend the Local Government Act is updated to embed intergenerational wellbeing as a core function of councils and to recognise local government as a Tiriti partner."
Among the recommendations are increasing councillors' pay in order to encourage candidates from a wider range of backgrounds, moving to four year terms and lowering the voting age to 16, as a way to increase voter turnout.
The panel also recommends consolidating some of the country's 78 councils or at least having them share functions such as roading.
Palmer said councils needed to change how they operate and the Panel has recommended a raft of reforms, including new approaches to leadership and new structures.
“Councils are doing innovative and impactful work in their communities but are hampered by a lack of funding and day-to-day pressures," he said.
Wairarapa MP and Minister for Local Government Kieran McAnulty said the independent report requested by the sector was an opportunity to work with local government and consider the issues raised, after the general election on October 14.
"The recommendations are not government policy but will provide an opportunity to work with local government to agree on what changes need to be made to make it fit for purpose for 30 to 50 years," he said.
"We need to know how our system of local government needs to evolve so it is better able to support programmes critical to communities, such as our emergency management system, our climate resilience profile, improvements to housing supply, and councils as enablers of community wellbeing."
"In the meantime, we are interested in hearing from councils their initial views on the final report.
"We are conscious of other sensitive areas of work that require focus and resources, such as helping New Zealanders through complex economic circumstances and recovery from recent weather events."
McAnulty said at this stage, considering new policy work could potentially direct resources away from supporting communities through tough times.
"Reforming local government is important, but ‘bread-and-butter' issues and recovery from recent disasters take precedence in the short term," he said.
"The general election provides local government with a window to get together, look over the recommendations [of the report] and decide what they like and what they don’t. Then, after the election, we can sit down and agree on how to progress things."
- NZLDR
Public Interest Journalism funded through NZ On Air
