Ideasroom

Covid recovery - local government up to the task?

What's coming down the pipeline at us now demands innovative and agile responses, and central government alone can not provide the answer. Is local government well-positioned to step up? 

The emerging economic and social dislocation caused by Covid-19 and the likely widening and deepening of that dislocation present challenges at all levels of government – local and regional and not just central.

Clearly the big levers that central government has at its disposal – fiscal and monetary policy – and the depth and reach provided by public service departments and agencies and the programmes they deliver, will mean central government will be to the fore. With unemployment predicted to rise to levels not seen since the Great Depression, New Zealand will need a set of active labour market policies of the kind we have not seen before.

But we know that central government alone will not provide the answer. Central government is already doing things that would only be entertained (and accepted as legitimate) in a crisis. And there is likely more to come as the Government uses its balance sheet to intervene in quite direct ways. But it is in the nature of governance, networked as it is, that interventions in the labour market - whether to lift capacity or better match capacity with opportunity - requires willing and able partners.

Chief among those is, of course, the private sector. But recent experience has also shown that local government too can play a significant role. In many policy spaces there is no line of demarcation between central and local government such that those concerned with wider welfare issues should limit their energies to the former.

In the period since the Great Depression, unemployment peaked in March 1991 at nearly 12 percent. Of course that figure masks quite significant variation. Indeed, in 1991 there were communities in this country where the rate of unemployment for younger Māori was well north of 50 percent. The issue was complex, and – to use a term of the time – a wicked one. Unemployment was structural, long-term for many, and came with inter-generational consequences. It demanded innovative and agile responses. So will what is coming down the pipeline at us now. 

One response to the challenges posed by structural unemployment came from a group of Mayors – the Mayors Taskforce for Jobs (MTFJ) – lead initially by Christchurch Mayor, Gary Moore. That body worked closely with central government (and governments of a variety of persuasions), and eventually in the early 2000s the relationship was codified in a Memorandum of Understanding between the two levels of government. That Taskforce still exists today, and it may well be called upon to marshal resources, in the unique manner that only local and regional government can, to the project of rolling out those active labour market policies referred to earlier.

Given recent media coverage that suggests an unhealthy degree of tension in one major local authority, the question is whether local government is up to the task. 

A local government council is, in some respects, not unlike a multi-party Cabinet. Prime ministers and mayors will sometimes face similar challenges – differences in scale perhaps, but similar nonetheless. Good prime ministers work on the basis of ‘no surprises’ (as indeed do their ministers). So they reach out, using ‘political’ staff to identify political and policy points of sensitivity and to assist in finding the zone of agreement.

I suspect that some mayors do likewise. Cabinet decisions will very often reflect granular and vigorous discussions at Cabinet committees – and politically-neutral public servants will often be called upon to provide evidence-based advice, appropriately out of the public eye – at this level. Councils, particularly in the present context, may not enjoy the luxury of in camera committee discussions, but mayors chairing those council meetings should also operate on the basis of ‘no surprises’ and reach out to councillors to broker compromises in advance of public meetings.

To not do so risks ‘you win, I lose’ kinds of votes we have seen recently (where, one suspects with marginal compromises all parties may have emerged with bottom lines intact). And just as with public servants in central government, in local government, politicians – mayors and councillors – must avoid dragging officers into the political affray. 

Wellington City Council will not be alone in seeing friction between mayors and councillors. A particular style of leadership and political management is required and local government might usefully reflect on the tools that prime ministers and cabinets have used to make multi-party government work. Given what we have coming towards us, all levels of government really have to be up for it, and fit for purpose.

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