If a bigger council is better, then why isn't Masterton District Council much better than Carterton or South Wairarapa District Councils?

Why this question is important:

The core assumption of the proposed amalgamation is that bigger councils are more efficient through economies of scale and are more financially resilient.

The core assumption

The whole case for amalgamation is based on the premise that a bigger council will be more efficient.

Here in the Final Proposal it states the advantages of a Single District Council and makes the claim that a "medium-sized council organisation would have greater economies of scale". In short, bigger is better.

The "new council would have greater financial resilience" - again the base premise is that "bigger is better".

BERL Rankings

The economic consultancy BERL does assessments of the effectiveness of councils and it ranks those assessments to determine which are the best performing and worst performing councils in New Zealand.

It assesses across a number of key indicators.

"The economic indicators that are examined include population, employment, Gross Domestic Product (GDP), and business units. Together, these economic indicators are termed key performance indicators."

If "bigger is better" is true then we'd expext that councils in areas of bigger population would rank higher in the assessments.

View the graph below to see the correlation between size of council/population and ranking. (Note: we have removed councils with populations great than 100,00 but even when included the graph doesn't change significantly.)

There is no correlation between size and performance (ranking).

In the 2013 rankings:

  • South Wairarapa was ranked 4
  • Carterton ranked 10
  • Masterton ranked 48

And yet, we are told that a bigger council would perform better.

Some links to associated material

When smaller is better - Jason Krupp from the New Zealand Initiative




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