Towards better local regulationLGNZ presentation and discussion

February 2013

Inquiry process

Terms of reference – May 2012

Issues paper – July 2012 – 59 submissions received

Approx 80 engagement meetings & 2 surveys (local govt & businesses)

Draft report released 17 Dec 2012 Submissions by 6 March 2013

Final report to government in May 2013

Terms of reference Early conclusions

• Identify opportunities for both central and local government to improve the regulatory performance of local government

• Gaps in the way regulations are made at the central government level, with a lack of implementation analysis.

• Evidence to suggest that monitoring and enforcement of local regulations is an issue undermining the achievement of regulatory objectives.

• Develop principles to guide decisions on which regulatory functions are best undertaken by local or central government

• Allocating regulatory responsibilities between levels of government, while straightforward in principle, involves practical trade-offs.

• Recommend options for regularly assessing the regulatory performance of the local government sector

• The performance reporting space for regulatory activities is crowded.

• Not all of the performance information is being used to full effect.

• There is a need for more feedback between levels of government.

Why are we here today?

• Listen and engage

• Pose some remaining puzzles and problems for the Board to consider

Central government regulatory process

Central government processes

• Gaps in the way regulations are made at the central level – lack of implementation analysis– poor consultation– weak lines of accountability

• Such gaps can – Reduce incentives to undertake rigorous analysis– Lead to poorly designed regulations – Draw resources away from areas with higher local value

Survey of local authorities on central government performance

b) Engagement is positive and constructivea) Local government feedback is taken into account when drafting new regulations

Survey of local authorities on central government performance

d) Engagement has a positive impact on the quality of central government regulations

c) Engagement is genuine and creates a sense of trust

Problem 1: Barriers to implementing regulations

IssueStrong message from councils that ambiguity in legislation is a barrier to implementing regulatory functions.

Questions• Which specific provisions are unclear

or ambiguous ?

• What implementation problems does this ambiguity create?

• What evidence could the Commission use to support a finding around unclear legislation?

Unclear or ambiguous provisions in legislation

Problem 2: Relationship with central government

IssueStrong message from councils that central government does not provide enough guidance on regulatory issues.

Questions• In which specific regulatory areas or

functions is guidance inadequate?

• What are the consequences of a lack of guidance and what evidence could the Commission use to illustrate these consequences?

• What would ‘good’ guidance look like?

Central government agencies provide enough guidance material to allow proper performance of regulatory functions

Local government regulatory process

Local government processes

• Local government regulation will be more successful if:– there is good design– councils have processes that assist them to allocate

resources where they are expected to generate the largest benefits

– there is the right capability

Problem 1: Addressing business perceptions of inconsistency

IssueInconsistent council advice. While 36% of businesses agree councils provide reliable and consistent advice, 30% disagree. Qualitative responses suggest strong feelings in the 30%.

Questions• What factors explain the 30% of

businesses that disagree?

• What processes do councils have in place to ensure internal consistency/quality of regulatory advice given to the public?

• What measures would help to reduce the 30%?

‘The council provided reliable and consistent advice'

Nearly 50% said the time and effort to comply with regulations is too large

Problem 2: Encouraging regulatory cooperationIssueCapability is importantCooperation can address capability needs

QuestionsWhat barriers could be reduced or removed to promote cooperation?

Importance of various factors in deciding to coordinate and collaborate with other councils

Problem 3: Understanding drivers of resource allocation

IssueLAs are forced to spend a disproportionate amount of their regulatory budgets on administrative processing in order to meet statutory deadlines

Questions• Why do statutory

timeframes stand out as a driver?

•Why is net benefit analysis less important?

Drivers of resource allocation to regulatory functions

Problem 4: Increasing cost-effectiveness of regulation

'Local government regulations (not rates) place a significant financial burden on my business'

IssueRegulation can have a significant impact on business productivityNew LGA purpose statement requiring performance of regulatory functions “in a way that is most cost-effective for households and businesses.”Questions• Is there potential to reduce costs

and impacts of regulation? • In what regulatory areas does the

decision-making process include an analysis of cost-effectiveness?

Problem 5: Increasing usefulness of performance information

IssueTo be worth the expense and effort, performance assessment should generate value for the people that assess performance and the people that fund the activity being assessed

Questions• Why is there low use of

performance information to assess regulatory performance?

• How could the usefulness of performance information be increased?

‘How routinely does your council do each of the following?’

Conclusions and request for submissions

Further lines of inquiry

Variation• When is variation in regulatory practice due to local circumstances,

and when is it just ad hoc?Regulatory outcomes• Digging deeper into the outcomes of regulation (including but not

limited to, economic outcomes) Implementation• Digging deeper into how regulations are implemented, particularly

monitoring and enforcement – resource allocation• Reviewing quality of local government regulatory decision-makingStrengthening central government regulation-making processes• Investigating options

Next steps

• Further engagement• Submissions• Areas for further investigation and analysis

Submissions and discussion forum: www.productivity.govt.nz Follow us on Twitter: @nzprocom

Submissions by 6 March 2013

Final report to government by 1 May 2013

Discussion forum

In addition to the submission process, for quick comments on specific issues. May be used in the final report. • How does compliance with local government regulations affect

your organisation?• Is it important that local government regulation is consistently

applied across the country? Why/why not?• How should regulatory functions be funded?• How well are local authorities monitoring and enforcing

compliance with regulations?• How well are Maori perspectives included in decision-making by

local authorities?

Join the discussion: www.productivity.govt.nz/discussion-forum/1510