Part 1: Introduction

Consulting the community about local authorities' 10-year plans.

1.1
By law, every local authority in New Zealand must prepare a 10-year long-term plan (LTP). They must also consult their communities on these plans before adopting them.

1.2
This report sets out matters arising from our audits of the consultation documents prepared as part of the 2015-25 LTP process. We report our observations from our work and suggest how local authorities can improve future consultation documents.

1.3
We will report on the 2015-25 LTPs later in 2015.

1.4
In this Part, we look at:

the statutory purpose of consultation documents;
our audit work; and
our audit opinions.

The purpose of a consultation document

1.5
Amendments to the Local Government Act 2002 (the Act) in August 2014 meant that local authorities had to prepare consultation documents for the first time in 2015. The consultation document replaced a full draft LTP and its summary as the legally required means for local authorities to consult their communities on their LTPs. The consultation document becomes the primary document to facilitate "the right debate" with the community.

Statutory purpose of a consultation document

1.6
The Act states that the purpose of a consultation document is to provide an effective basis for public participation in local authority decision-making processes about the content of an LTP.¹

1.7
The Act requires a consultation document to achieve this by:

(a) providing a fair representation of the matters that are proposed for inclusion in the long-term plan, and presenting these in a way that—

explains the overall objectives of the proposals, and how rates, debt, and levels of service might be affected; and

can be readily understood by interested or affected people; and

(b) identifying and explaining to the people of the district or region, significant and other important issues and choices facing the local authority and district or region, and the consequences of those choices; and

(c) informing discussions between the local authority and its communities about the matters in paragraphs (a) and (b).

1.8
Although local authorities are free to decide what to put in their consultation documents to achieve the statutory purpose, there are some mandatory requirements. We discuss how local authorities met these mandatory requirements in Part 2.

1.9
A local authority must also ensure that it presents the contents of its consultation document in a form and manner that provides an effective basis for public participation in local authority decision-making.²

1.10
The overall legislative requirements are clear. A consultation document should provide members of the public with an explanation of the important issues the local authority faces during the next 10 years, the local authority's options for addressing those issues, and how those options might affect the financial position of both the local authority and members of the public.

1.11
A consultation document should be presented in a way that members of the public can readily understand and that enables them to provide informed comment and submissions to the local authority if they wish to. As a result, the consultation document informs "the right debate" between the local authority and relevant stakeholders.

1.12
The consultation document must be presented in a concise and simple manner. It is intended to be a shorter and more accessible document than the draft LTP that was previously required. It should present only the most important issues for the community to consider.

1.13
The consultation document is not intended to summarise the full content of the LTP (unlike the previously required draft LTP summary). However, it must set out the main matters that the local authority proposes to include in its LTP. A consultation document must not contain or have attached to it a draft LTP or a full draft of any policy or strategy.

1.14
Before adopting a consultation document, a local authority must prepare and adopt the information that the content of the consultation document relies on.³ The consultation document must state where members of the public can access this information. By making this information available before the consultation document is adopted, the local authority effectively provides the community with all the significant information that was previously included in the draft LTP.

1.15
Consistent with this approach, the New Zealand Society of Local Government Managers (SOLGM) considered that:

A [consultation document] succinctly describes the key issues from the LTP as well as making the key choices and implications clear to your community. By focusing the reader's attention on the key issues … your [consultation document] is the key means for informing the right debate with your community.⁴

Our audit work

1.16
The Act requires each consultation document to contain an audit report from the Auditor-General providing an opinion on:

whether the consultation document gives effect to its purpose (as set out in paragraphs 1.6 and 1.7); and
the quality of the information and assumptions underlying the information provided in the consultation document.⁵

1.17
We therefore carried out an audit for each local authority's consultation document to determine whether it provided an effective basis for consultation (with a particular emphasis on whether it fairly represented the matters the local authority proposed to include in its LTP). We also determined whether the consultation document identified and explained the main issues and choices facing the local authority and the consequences of those choices.

1.18
We also audited the local authority's underlying supporting information, including asset management plans, to determine the reliability of the supporting information.

1.19
Before the Act was amended, we were required to assess the extent to which the draft LTP complied with the requirements of the Act. In amending the Act, Parliament has clarified that this is no longer our role.

1.20
Our role is now to assess whether the consultation document is fit for purpose. We assess whether the consultation document covers what it needs to and whether it "does the job". We are not required to give a view on whether the local authority has met all the requirements of the Act from a legal perspective.

1.21
However, there is an element of legislative compliance to our role, including mandatory content requirements for consultation documents. We consider whether those important components are present and whether each consultation document does the job it needs to. This does not involve checking that every last detail lines up with the Act, regulations, or prescribed forms.

1.22
Appendix 1 presents the new requirements for local authorities and for our audit role.

Audit opinions

1.23
We issued unmodified audit opinions for all consultation documents audited.

1.24
Six audit reports included an "emphasis of matter" paragraph. We use an emphasis of matter to indicate a significant uncertainty or other matter that we consider important enough to highlight to the reader.

1.25
In two audit reports, we expressed no opinion on some matters contained in the consultation document. These were for Upper Hutt City Council (statements about a possible amalgamation) and Napier City Council (statements about a Local Government Commission report about potential amalgamation issues).

1.26
In Appendix 2, we set out excerpts from the eight non-standard audit reports that we issued.

1.27
Many consultation documents that we initially received did not, in our view, provide an effective basis for consultation. These consultation documents:

did not identify and explain the most significant issue(s) facing the local authority; and/or
set out all the relevant issues, but failed to identify the relevant options, implications of the options, and consequences, as the Act requires; and/or
were poorly written, making it difficult to understand the main issues and choices facing the local authority.

1.28
Subsequent changes to the consultation documents meant that, on balance, they disclosed enough to obtain an unmodified audit opinion.

1: Section 93B.

2: Section 93F.

3: Section 93G.

4: New Zealand Society of Local Government Managers (2014), Telling our Stories 2015, Wellington, page 6 (emphasis in original).

5: Section 93D(4).