Part 3: Conclusion

3.1
Councils prepared their 2024-34 long-term plans during a time of significant change and uncertainty. Notably, the Government was developing legislation to change how water services will be owned, financed, and operated. The timing of the Government’s transport policy announcements and funding decisions also did not align with the time frames for councils’ long-term plans.

3.2
Most councils responded to this uncertainty well. They were able to complete long-term plans that met the required standards and provided their communities with a reliable view of how councils will provide and pay for services.

3.3
The 2024-34 long-term plans also show that councils face significant financial and infrastructure challenges that they will need to carefully manage.

3.4
Rising operating costs and the need to increase capital expenditure are putting pressure on many councils. In response, councils are increasing rates at historically high levels. To pay for much-needed investment in infrastructure, councils are also increasing their debt to some of the highest levels in decades.

3.5
As a result, some councils are close to or exceeding their self-imposed debt limits.

3.6
These factors create risks to councils’ long-term financial sustainability and to their ability to respond to unforeseen events such as earthquakes or severe weather. Councils will need to carefully manage these risks.

3.7
The changing operating context for local government highlights the importance of a strong strategic and agile approach to long-term planning. We continue to recommend that the Department of Internal Affairs and the local government sector review the required content for long-term plans so that they remain fit for purpose and focus on what matters most to communities.

3.8
Long-term plans (and their supporting finance and infrastructure strategies) should be actively used to drive councils’ delivery and performance and to provide accountability to their communities.