Amalgamation Won't Fix What's Actually Slow
New Zealand's Simplifying Local Government reform gave councils until 9 August to submit their own merger plans. The evidence says merging won't make them cheaper or faster — because size was never the variable that mattered.
In short: as part of the Government's Simplifying Local Government reform, councils had until 9 August 2026 to volunteer their own merger plans, or have one imposed on them later. Cabinet is expected to decide on shortlisted proposals later this year. The pitch is that bigger councils are more efficient councils. The Government's own infrastructure research says that isn't true — council size has no bearing on cost efficiency. If that's right, amalgamation will produce bigger councils with exactly the same operational decision-making habits, just with a wider area over which to run them.
This is part of a larger pattern across the sector — see the fuller argument for where council performance actually comes from.
On 5 May, Local Government Minister Simon Watts and RMA Reform Minister Chris Bishop gave the country's 67 councils a choice: submit a credible reorganisation proposal by 9 August, or have one imposed under a "backstop" process after 2028. Framed as voluntary, it isn't really — Watts put it plainly: lead your own reform, or we will do it for you. Given that only three of those 67 councils are hitting their building consent timeframes, and fewer than a quarter are meeting resource consent targets, it's easy to see why a government under pressure reaches for the biggest lever available. Bigger units, the logic goes, mean fewer duplicated back offices, more specialist capability, and lower cost per ratepayer.
The evidence doesn't support the theory
New Zealand already ran this experiment. Auckland's 2010 super-city merger folded eight councils into one, sold on exactly this promise of scale efficiency. Fifteen years on, its costs and its rates have both climbed faster than inflation, and the savings scale was meant to deliver never showed up. That isn't just an impression. When the Infrastructure Commission set out to test whether bigger councils are more cost-efficient, its 2022 report — Does Size Matter? — found that council size has no bearing on cost efficiency: in the very areas you'd expect scale to help, from road maintenance to building consents, the efficiencies simply weren't in the data. It's a conclusion the current reform doesn't mention much.
That's not an argument that amalgamation is pointless — there are real cases for shared services, deeper technical benches, and simpler regional planning. But it is a direct challenge to the premise that a bigger org chart is a faster or cheaper one. If size isn't the variable driving cost and speed, merging entities changes the letterhead without touching the thing actually producing the drag.
The org chart was never the bottleneck
The same argument applies to the wider reform package rather than amalgamation specifically: reform reshapes local government without reaching what sets its pace. To be clear about which layer that targets: working out governance, boundaries and who merges with whom is a genuinely strategic call, and it deserves the care it's currently getting — this isn't an argument for rushing that decision. The pattern I'm pointing at sits underneath it, in day-to-day operations. Councils are, for entirely understandable reasons, wired toward risk minimisation over risk optimisation on routine calls — every consent, every procurement approval, every everyday decision gets checked, escalated, and re-checked, because being slow is forgivable and being wrong is not. That pattern doesn't live in the boundary lines on a map. It lives in delegated authority levels, sign-off chains, and what actually gets rewarded when a frontline team makes a fast, sound call versus a slow, defensible one. Merge two councils with that pattern and you get one larger council with the same pattern — Auckland is the proof of concept, not the exception.
There's also a practical risk in the way this particular reform is landing: a voluntary, bespoke process across 67 councils on a three-month clock is likely to produce a patchwork of mismatched entities, each carrying whatever governance habits its constituent councils walked in with. Nothing about a compressed merger timeline forces anyone to interrogate how decisions actually get made — if anything, a restructuring under deadline pressure is exactly the environment where the safest, most defensible process wins by default.
What would actually move the numbers
If the goal is genuinely lower cost and faster delivery — not just a tidier map — the diagnostic question isn't "how many councils should there be," it's how long it currently takes this council to process a routine consent, sign off a purchase order, or resolve a service request, and what that's costing. That's measurable now, independent of any merger, and it's the number amalgamation won't move on its own. Councils now waiting to hear how their Head Start proposal lands would get more out of running that diagnostic now than they did guessing which neighbour to merge with.
Curious whether your organisation's real bottleneck is structure or decision speed? The Friction Factor survey is a fast way to find out — or get in touch if your council put in a Head Start proposal and you want a second opinion on where the drag actually sits, regardless of how it lands.
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