Kerre Woodham: How is it that we need a Crown Observer?

Kerre Woodham Mornings Podcast

The Government is set to appoint a Crown Observer to Wellington City Council within weeks. The writing was on the wall really, wasn't it? It was whether they were going to go the whole hog with the Commissioner, a’ la Tauranga, or settle for an Observer, and that is what they've gone with.

Local Government Minister Simeon Brown made the announcement yesterday and said he's written to Wellington City Council with draft terms of reference – he's given the Council ten working days to respond, as required under the law. The move follows months of wrangling over the Council's Long Term plan. They were looking to fund it through the sale of Wellington Airport shares, that sale is now not going ahead, and they're having to scratch around and find a whole lot of money to fund the goings on of the city. The planned sale of the shares, and it was one that was pushed by Mayor Tory Whanau, was scuttled at the last minute, following a vote by councillors earlier this month.

Tory Whanau is resigned to the fact that there is an Observer coming in and she said, “I welcome the Minister's intention to bring in an observer”. She said the Minister has fairly pointed out examples where councillors had walked out of meetings and acknowledged the Council has some tough decisions ahead in the next few months. She also conceded that the Council must do better – but she does not accept there's been financial mismanagement at the Council surrounding water infrastructure investment, and she does not intend to cancel crucial plans for the city.

Well, it may not be mismanagement, but there seems to be a little bit of financial incomprehension. Simeon Brown said the council has demonstrated an inability to understand the mechanisms it has available to manage the financial pressures it's facing. So, you don't know your arse from your elbow when it comes to budgeting, basically, to boil it down into simple language. This includes the Council choosing in its Long Term plan to use rates revenue to pay for its water infrastructure upfront, rather than appropriately using debt finance.

Former Wellington Mayor Dame Kerry Prendergast spoke to the Mike Hosking Breakfast this morning and says the person selected to be the Observer will have to have a specific skill set:

KP: I think the Minister has made the right call and I am positive he didn't make that decision lightly. It is not easy for central government to step into local government. Local government’s responsible for its own decisions, and this is a centre-right government. I'm sure that he took lots of advice and it wasn't something that he came to an easy decision on, but I do think it's the right decision. And let's hope with the right person in there, and a council and mayor and management who are now listening, we're going to see the right response coming from them.

MH: Would you want to be a Crown Observer?

KP: I don't think that's the skill set they're looking for. They'll be looking for someone who is maybe an accountant/financial expert, someone who will be able to display the qualities I've just set out, that's the sort of person they'll be looking for.

Yes, somebody who does know their arse from their elbow when it comes to a set of accounts. The Government's appointment of a Crown Observer at Wellington City Council has prompted concerns that other councils too could be in the firing line. The Opposition believes the bar for intervention is too low, and that Wellington is hardly the only council with bickering members and money struggles. Labour said many councils were struggling to fund their mandates, especially after the government changed the water legislation, and it pointed out the funding and financing tools for water infrastructure was still not available.

Chris Hipkins said if Wellington is the threshold needed for an Observer, then he expected other councils around the country to also get interventions. He said, “I think the threshold for that kind of intervention needs to be quite high, my concern here is that if they're doing it for Wellington City Council, they could be doing it for other councils in relatively short order”.

A couple of things on that, call me old fashioned, but I'd really like to have somebody who knew what they were doing in charge of the sums. And if Wellington have shown that they don't know how to manage sums, and if they have shown that they cannot take advice, because I'm presuming that the highly paid permanent staff members at Wellington City Council, the public service if you will, the ones who are not elected but appointed, surely they must know how to manage a set of sums? So how come they haven't been able to spell it out to the Council that this is what we need to do? You've got people who have been hired to do a job at the Council and presumably they know what they're doing. Councillors can come and go, and they will keep the cities and the towns operational and functional.

So do councils not listen to the heads of department when they present their reports? Do they ignore the advice of, pretty well-paid, specialists in their field and just override their recommendations? How is it that we need an Observer to come in who knows about finance and knows about accounts, when you've got a chief executive, and you've got heads of departments who are already on staff being well paid? I would be all for it, having somebody who knew what they were doing, overseeing what the Council was doing, if there weren't supposed to already be people there, that ratepayers are paying for, to do precisely that.

If I was elected to council, I'd say, what do you recommend we do first? How much money have we got to do all of these jobs? Where can we get money from without necessarily pinging the ratepayers? And I would assume that people who have been working for Council for ten years would have some answers. You know, why have a dog and bark yourself? You've got a chief executive, why do you have an Observer? What's the chief executive doing? I'm just interested because otherwise the whole concept of local democracy is flawed. If we can't manage to manage ourselves, then just appoint a highly trained CEO and let them get on with it.

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