Does size matter? The impact of local government structure on cost efficiency

Local government plays an important role in infrastructure planning and provision in New Zealand. Addressing New Zealand’s infrastructure challenge will require local government to provide infrastructure and services efficiently and effectively. How do we measure up?

This report aims to improve the evidence base on local government performance in New Zealand, focusing on the cost efficiency of council infrastructure and service provision.

Key findings

• There is relatively little hard evidence on the impact of local government structure in New Zealand on performance.
• Three types of local government services represent over half (52%) of total local government operating expenses. These services are road maintenance, building consent processing, and overhead costs for governance and support services.
• As identified in the New Zealand Infrastructure Strategy, we should review the structure of local government to ensure that it provides infrastructure in an efficient and well-coordinated way, especially in growing urban areas that are spilling across existing council boundaries.