Local Authorities Working Together.


Local authorities carry out many of the same functions and activities, have common statutory responsibilities, and face similar challenges. Working together can be a practical and cost-effective way to tackle common tasks, share resources, or take advantage of economies of scale. Internationally, public bodies at local and central government levels are being encouraged to work together in the interests of efficiency and the co-ordinated delivery of services to the public.

We selected 12 case studies from throughout New Zealand to examine a variety of joint arrangements between local authorities. These arrangements included sharing staff, joint procurement, combined planning, and co-operative delivery of services.

We examined these arrangements against a set of broad good-practice expectations, in order to assess whether the joint arrangements were being well managed and were providing value for money. We then considered the case studies collectively to draw out more general guidance for local authorities. This is summarised in a separate brochure (PDF 65kb).

We intend to use our report as a basis for any future work in this topic area.

The Environment for Working Together

The Legislative Framework

The Local Government Act 2002 (the Act) requires local authorities to carry out their activities as effectively and efficiently as possible. One way that local authorities can meet this requirement is by working together. The Act gives local authorities the freedom to work together where they can demonstrate benefits in doing so.

Strategies for Working Together

Staff in local authorities will more readily identify and take advantage of opportunities to work together where the organisational environment and culture actively support working together. Some local authorities have promoted working together by:

  • introducing specific strategies or policies; or
  • taking part in regional forums.

Less than half of the local authorities involved in our case studies referred in their planning documents to a policy or strategy on partnerships or other forms of working together with other local authorities. Some local authorities may therefore be missing out on useful opportunities to work together. We encourage all local authorities to consider working together wherever there is potential to operate more efficiently or deliver services more effectively to their communities.

Regional Forums

We looked at two regional forums established expressly to foster joint arrangements among local authorities in Auckland, and in Southland. These forums were helping local authorities in the two regions to align strategies and policies, and provided an opportunity for councillors and chief executives to identify and debate opportunities for working together.

Local authorities may have a lot in common in terms of functions, responsibilities, and challenges, but they can also differ in many respects, such as size, culture, resources, systems, and service standards. These factors may pose a barrier to working together. Through regional forums, local authorities were able to better understand their different circumstances and priorities, and to reach a common view on the best approach to working together.

Councillors may be wary of arrangements that transfer a measure of control and governance to a joint body or another local authority, especially where individual council priorities are different. Forums can enable councillors from different local authorities to align priorities and perspectives, to help reach decisions as a region, and resolve differences as they arise. Our case studies showed that the leadership and commitment of councillors was critical to the success of joint arrangements.

Neither of the two regional forums had the power to bind its member councils. Reporting back to the individual councils was an important feature of each forum. This arrangement preserved the decision-making powers of individual councils on particular issues, leaving each free to choose whether or not to participate in a particular joint arrangement.

Creating a Catalyst for Ongoing Co-operation

Relationships take time to establish and maintain. Successful regional co-ordination can be the product of relationships built up between staff in different local authorities over a number of years. Where they existed, staff networks had created a valuable level of trust and understanding between local authorities, and a foundation for entering into specific joint arrangements. In some cases, the constructive working relationships built by staff involved in joint arrangements, had created opportunities for further and ongoing co-operation between their organisations.

Selecting Joint Arrangements

Deciding Whether Working Together is the Best Option

Entering into joint arrangements with other local authorities is one of many ways that a local authority may choose to carry out its activities. In order to identify and analyse options, local authorities need to take a systematic approach – assessing costs, benefits, and risks, and considering alternatives such as carrying out a task in-house or contracting out a service. In deciding to work together, local authorities must be able to demonstrate that this approach will benefit local communities. We assessed whether the processes followed by local authorities met our expectations.

Joint arrangements had come about for different reasons:

  • to meet new statutory obligations or standards;
  • to align objectives, policies, standards and activities, provide better quality and more consistent information to the public, and ensure consistent processes or standards – especially for people dealing with more than one local authority;1
  • to build capability – an issue faced by smaller or less well-resourced local authorities in particular; and
  • to deliver services more effectively or efficiently.

Of the 12 joint arrangements that we examined as case studies, 4 were the outcome of a considered assessment of a variety of opportunities to work together. While useful, these processes did not fully meet our expectations of a systematic and comprehensive examination of options.

Moreover, few potential joint arrangements were subjected to a rigorous business case assessment that identified and analysed all costs, benefits, and risks. Cost/benefit assessments, where they were undertaken, often excluded the costs of in-house staff time, which in some cases was significant.

We identified some proposed joint arrangements that failed to proceed. This may happen for a number of reasons. However, in our view, more rigorous planning, analysis of costs, benefits, and risks, and consideration of options might have reduced some of the time and effort spent on pursuing unproductive opportunities, and made it more likely that proposed joint arrangements would have demonstrable benefits for local communities.

Benefits of Working Together

Despite the absence of cost/benefit analysis in some cases, we identified significant financial and non-financial benefits for local authorities working together. These included:

  • avoided staff costs;
  • access to skills and expertise;
  • exchange of best practice;
  • procurement savings from economies of scale;
  • better community outcomes;
  • co-ordinated services; and
  • improved compliance with legislation and standards.

However, local authorities were often unable to reconcile actual benefits with projected benefits because:

  • no cost/benefit analysis had been undertaken;
  • benefits (such as common standards or better services) were sometimes not able to be quantified; and
  • some of the joint arrangements had not yet reached the stage where benefits were apparent.

Management of Joint Arrangements

Most of the joint arrangements that we looked at were being soundly managed, as appropriate to their scale and complexity, and the levels of risk for the partners.

Agreements for Working Together

Some local authorities had drawn up partnership agreements. These were providing a useful framework for local authorities to work together on specific projects, and outlined agreed objectives and roles, a clear project timetable, funding arrangements, and working relationships. Where local authorities had different cultures, working styles, policies or decision-making processes, such agreements provided a means for the partners to resolve issues as they arose.

Ongoing relationships – such as for local authorities to share staff, provide services, or run a joint venture – were commonly governed by a contract setting out the terms of the agreement between the partners.

Governance Arrangements

We found that governance arrangements were appropriate, and varied according to the nature of the project. Joint arrangements of strong community interest were governed by steering groups with councillor representation from the participating local authorities. These steering groups fulfilled important functions, such as:

  • communicating with local communities and meeting public accountability expectations;
  • directing project teams of staff from the participating local authorities;
  • resolving policy differences between partner local authorities; and
  • keeping participating local authorities informed.

Staff on project teams were taking positive steps to ensure that councillors were consistently briefed and that council decisions were co-ordinated.

Structure and Legal Form

Working together can give rise to situations where it may be necessary to consider making appropriate corporate arrangements. Circumstances where this will be necessary are where local authorities:

  • commit significant shared expenditure;
  • employ staff who work for more than one local authority; and/or
  • collectively enter into a contract, thereby incurring legal obligations.

In some instances, project teams had carefully considered options for the structure of a joint entity against well-defined criteria. Other arrangements had evolved to the point where financial transactions and other aspects of the relationship between the local authority partners needed to be put on a more formal footing, and consideration given to the structure and legal form of the joint arrangement.

Funding Joint Arrangements

Joint arrangements typically involve two types of expenditure:

  • joint expenditure to, for example, engage consultants; and
  • costs incurred by individual local authorities – in particular staff time, administration, and other associated overheads.

Arrangements involving joint or pooled funding need robust reporting and monitoring mechanisms agreed to by all the partners.

For each of our 12 case studies, the participating local authorities had negotiated a formula for sharing joint expenditure. Some joint arrangements gave partners the flexibility to meet their share of the costs through in-kind contributions instead of cash.

Few budgets identified staff time and other in-house costs, or analysed the effect on workload. Failure to recognise the demand on staff resources was responsible for slow progress on some joint arrangements.

In some situations, local authorities had appointed a project manager, who played an important role by:

  • managing the implementation of the joint arrangement strategy or plan;
  • ensuring key milestones were met and work programmes completed;
  • monitoring expenditure on behalf of the funding partners; and
  • facilitating agreement between the parties, reconciling differing points of view, and co-ordinating relationships between participating local authorities and with other stakeholders.

Monitoring and Evaluation

Periodic reviews can provide assurance that project deadlines are being met, benefits realised, and lessons learned. We found that joint arrangements were not generally being evaluated to ensure that they delivered the expected gains. Where proposals had identified net benefits from working together, we found no mechanisms in place to monitor and review actual benefits against projected benefits.

1: Working together may not be appropriate where a local authority has a statutory duty to make a particular decision itself, such as in relation to some functions performed under the Resource Management Act 1991.

page top