Part 1: Introduction

1.1
Decision-making and consultation are important activities by which local government fulfils its purpose of enabling democratic decision-making and promoting the general well-being of current and future generations.¹

1.2
The Local Government Act 2002 (the Act) requires local authorities to take a principles-based approach to performing their role. Some of the principles relate directly to decision-making and consultation. The Act also sets out requirements for decision-making and consultation. This means that local authorities must use their judgement when engaged in decision-making and consultation. This applies both to when local authorities are working with their communities and to their management processes. Local authorities face risks of challenge if their decisions can be shown to be unreasonable, or if they have not observed due processes for decision-making and consultation.

1.3
There are many reasons for local authorities to engage in a range of decision-making and consultation processes. These reasons include establishing relationships, getting better co-ordination and use of resources, identifying a broader range of options for consideration, gaining the trust of their communities, supporting an engaged and informed community, and meeting expectations from the community to be involved and participate in local authority decisions.

1.4
After the Act was passed in 2002, sector organisations and the Department of Internal Affairs produced a series of high-level guidance material.²

1.5
In the past, we have published guides on local authority decision-making and consultation, managing conflicts of interest, managing the relationship between the local authority and the chief executive, and managing public communications by local authorities.³

1.6
We respond to a number of requests for assistance annually. These are enquiries from members of the public about the activities carried out by their local authority, or enquiries from local authority staff or elected members seeking advice on actions they are carrying out or contemplating for the future Information about our process for enquiries is available from our Office or our website at www.oag.govt.nz.

1.7
We felt there was a need, given the five years since the Act was enacted and given that our 1998 guidance material on decision-making and consultation pre-dated the Act, to provide new guidance on the requirements for local government decision-making and consultation for areas that the sector was finding a challenge to implement. This guide, and other reports published since 1998, covers all the topics included in the 1998 report.

Purpose of this guide

1.8
The responsibility for decision-making and consultation practice under the Local Government Act 2002 lies with local authorities.

1.9
The Act is based on principles that require judgement to apply. Therefore, the purpose of this guide is to provide information for local authorities to use when applying the principles and requirements of the Act to their decision-making and consultation. It is not a step-by-step “how to” guide.

1.10
Exploring ways of working with others that enable more participation by citizens in decision-making is a global trend in local government. Many local authorities use participatory approaches (such as workshops, community forums, and planning with partners) to determine community views, and to work through issues and find possible solutions. The structure of New Zealand local government remains that of a representative democracy, where elected representatives are responsible and accountable for the decision-making of the local authority, assisted by information from such participatory processes.⁴ This guide recognises both participatory approaches and representative responsibilities.

1.11
We expect this guide to be useful to a diverse audience, including the public. For those in local government, we expect that elected members and staff will use this guide with other material provided by sector organisations such as the Society of Local Government Managers (SOLGM)⁵ and Local Government New Zealand (LGNZ).⁶

1.12
The sections of the Act addressed in this report are:

• principles relating to local authorities (section 14);
• decision-making provisions (sections 76 to 81);
• consultation provisions (sections 82 to 90);
• planning provisions (sections 93 to 97); and
• financial management provisions (sections 100 to 102).

How we developed this guide

1.13
We brought together a working group of local government staff and advisers to help identify the main issues facing the sector and examples of good practice New Zealand examples and references to international practice support the material. Extensive sector commentary on various stages of the draft material improved these issues and examples further.

1.14
The working group chose to select important issues for consideration, rather than preparing comprehensive “how to” information. Each issue is explained, followed by the Act’s requirements, some discussion, and examples where applicable.

Using this guide

1.15
This guide sets out the Auditor-General’s and the local government sector’s views on current good practice. We expect this good practice to evolve over time.

1.16
The guide is not intended either to be an operating manual or to cover every conceivable situation. It should not be taken as constituting legal advice or as the audit requirements of the Auditor-General. Where a member of the public or an elected member has specific queries on these matters, they should seek separate advice.

1.17
We intend to review this guide when circumstances require it.

1.18
Those who are unfamiliar with the Act will be able to use this guide to become familiar with the general principles and obligations for decision-making and consultation that local authorities work under. We expect that this will assist, in particular, those citizens who have questions about how their local authority has carried out these activities.

1.19
Others who are more familiar with the Act will be able to benefit from the wide range of examples included. We hope this sharing of good practice will provide both stimulation and support to local authorities and the sectors that work with them.

What this guide does not cover

1.20
This guide discusses the generic requirements for decision-making and consultation, with some references to specific aspects that the sector identified as more challenging. The guide does not cover every aspect of specific decisions that have particular requirements under the Act.

1.21
This guide does not cover:

• decision-making and consultation requirements under other Acts;
• how to carry out consultation or prepare community outcomes;⁷
• fairness, bias, and predetermination issues;⁸
• how to do monitoring, reporting, and evaluation; or
• certain decisions under the Act made by local authorities, such as making bylaws.

1: Section 10 of the Local Government Act 2002 states that the purpose of local government is to enable democratic decision-making and action by, and on behalf of, communities and to promote the social, economic, environmental, and cultural well-being of communities, in the present and for the future.

2: These include the New Zealand Society of Local Government Managers, Local Government New Zealand, and Department of Internal Affairs, Local Government Knowhow Guide: Decision-making (2003) and Local Government Knowhow Guide: Governance (2003).

3: All these reports are available on our website www.oag.govt.nz and are listed in Appendix 1.

4: Section 41(3).

5: See Society of Local Government Managers, www.solgm.org.nz and www.solgm.co.nz (legal compliance guides).

6: See Local Government New Zealand, www.lgnz.govt.nz.

7: We discuss the process of engaging with other organisations and stakeholders as part of preparing community outcomes in Part 3.

8: For information on fairness, bias, and predetermination issues, see our Guidance for members of local authorities about the law on conflicts of interest (June 2007), available on our website www.oag.govt.nz.