Councils have been put on notice that the reorganisation and rationalisation of New Zealand's local government system is happening. The Government has given councils until 9 August 2026 to submit a proposal under the Head Start pathway, and has expressed a preference for the establishment of a single new unitary authority in each region. Councils that don't opt-in will face compulsory reorganisation under what's been referred to as the 'backstop process'. Both processes require new legislation, which is expected to be introduced in the second half of 2027.
The Head Start pathway will be an efficient and welcome process for councils who, for various reasons – including collaboration as part of the Local Water Done Well, have been exploring amalgamation options. However, councils will be conscious of the challenges of having only three months to put together a proposal that meets the criteria set by Government. All councils, including those considering a 'wait and see' approach, will be mindful of the importance of engaging and involving their communities in these critical decisions.
In this article, we provide an overview of the Head Start pathway and comment on matters that councils should think about as they start work on proposals.
Combined Territorial Board proposal
The government's initial plan for Simplifying Local Government, announced on 25 November 2025, was for elected regional councillors to be replaced by Combined Territorial Boards (CTBs). CTBs were to be made up of the elected mayors of each city and/or district councils in the region. Under that plan each CTB would have been responsible for developing a reorganisation plan for the region.
However, feedback indicated many councils are ready to move now, and that having a CTB responsible for both reorganisation and overseeing regional council functions, would introduce added delays, complexities, and workloads for the relevant mayors.
The Government has acknowledged the feedback above but has also made clear that it considers that the current model of local government creates barriers to delivering simple and cost-effective services across service delivery and regulatory functions. That is the basis of Head Start.
The Head Start pathway
Responding to the above concerns, the Head Start pathway, as announced, reflects the following:
- Council-led: Under Head Start, councils are responsible for developing proposals to create a new unitary authority that combines both local and regional council functions, covering a full region (or subregion). Council proposals are however subject to Cabinet approval, so councils will want to put forward a sound case for reorganisation that shows the potential for efficiencies and cost-savings. Councils will also be thinking about how to engage with their communities on possible changes – we comment on this later in the article.
- Voluntary: Head Start is a voluntary process – councils can choose not to submit a proposal. However, it's intended that those that don't will be subject to the 'backstop process' (described in more detail below), and so might have less say in the legislative framework for local government reorganisation that is intended to be developed over the next year.
- But, councils could be 'opted-in': At least two councils must submit a proposal together, but not all councils in a region need to submit a proposal for it to be considered by Cabinet. The Head Start Policy Document details how this will work (page 7) – in short, if the majority of councils in a region, whether by population or number of councils, submit a proposal, it will be considered by Cabinet. That means that councils that do not themselves submit a proposal might find themselves being reorganised along with other councils in the region who did submit a proposal.
- Unitary authority options: The simplest approach for creating a new unitary authority would be for each city, district and regional councils in each region to join forces and create a single unitary authority. This is presently the Government's strong preference. That said, the Government has also stated that more than one unitary authority may be approved in a single region, but only if Cabinet decides that is necessary (for example, due to the size of a region, complexity of issues) and provided the new model still delivers clearer and simpler local and regional decision-making.
- Proposals must address criteria: The Department of Internal Affairs will assess each proposal against five criteria:
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- Deliverability – proposals must be realistic and must include some information about how they will be implemented in a timely way
- Supports the new planning system – continued emphasis on delivering the new planning system
- Simplifies local governance – the Government wants to see efficiency, consolidated decision-making, and more alignment between a region's councils
- Economies of scale – transport and catchment management are signalled out as needing to be supported, so details of what's proposed should be included in proposals
- Maintains local voice – proposals need to show fair and effective representation, and how decisions will be made in a way that balances urban and rural interests.
The criteria signal the clear direction of travel: larger unitary authorities are needed to support the delivery of good-quality and cost-effective local infrastructure, public services and regulatory functions.
- Only 'outline' proposals are required: The Head Start refers to proposals as "outline proposals", and states "Outline proposals do not need to resolve all issues relating to any transfer of regional functions". It is expected that outline proposals will continue to be developed after they are submitted, and before Cabinet approval, and we assume that this will be a council-led process. While the Head Start Policy Document is light on the content or form required for outline proposals, there could be further guidance from the Department of Internal Affairs as to what's required.
The backstop process
Councils that do not opt-in to the Head Start process will be subject to a mandatory backstop, which means reorganisation by legislation. Backstop options for councils that did not participate in Head Start will be heavily influenced by the proposals that are developed through the Head Start process.
It is intended that the backstop process will come into effect after the 2028 local government elections.
New Head Start and backstop legislation
Schedule 3 of the Local Government Act 2002 already allows councils to request that the Local Government Commission investigate a proposed local government reorganisation or assess reorganisation plans prepared by local authorities. A poll of voters must be held before a reorganisation plan can proceed to implementation.
However, the Government intends to introduce new legislation to both:
- Give effect to approved outline proposals under the Head Start pathway
- Provide the backstop mechanism to mandate reorganisation of councils that do not come up with an outline proposal by 9 August 2026.
The Head Start Policy Document states that new legislation will be introduced before nominations open for the 2028 local elections, so that "…candidates understand any new roles and responsibilities, and electors can vote with clarity."
No regional council elections in 2028
Under the Head Start policy, regional councils that opt in to the Head Start pathway will be reorganised into a unitary authority before the 2028 elections, removing the need for regional council elections.
However, for those regional councils on the backstop pathway, it is intended that the new legislation will disestablish the role of elected regional councillors from 2028. Instead, the Government expects that regional councillors will be replaced with an interim body, described as "a board of mayors, Crown commissioners, or a combination of both" – perhaps something similar to the original Combined Territorial Board proposal.
Design and decision-making considerations
There are a range of issues that councils will need to consider while preparing proposals and beyond that, including:
- Consultation and decision-making: Councils need to carefully consider their consultation and decision-making obligations under Part 6 of the Local Government Act. The Government has signalled that mayors and councils should be taking the lead on outline proposals, and will have the opportunity to consult with communities before final decisions are made by Cabinet in May 2027. Councils will be mindful of their obligations to consider the views and preferences of affected persons when making decisions on reorganisation options.
- Other statutory obligations continue: Until such time as new legislation is passed, councils' existing obligations under the Local Government Act and other legislation continue, including (for example) requirements to prepare Long-term plans. New legislation will likely include detailed transitional provisions intended to help councils transition from their current structure to their new structure. However, councils will need to think carefully about how they can continue to meet their obligations until new legislation is enacted.
- Local water: Councils across the motu are in the process of implementing water service delivery plans for new systems for the delivery of water services. While many councils have already established multi-council CCOs, others have decided to continue delivering water services alone – in-house or through a CCO. The prospect of consolidation will require consideration of:
- the future governance and oversight of multi-council CCOs, and the extent to which these can be aligned (geographically) with proposed new unitary authorities; and/or
- more significantly, single council water models having to be revised.
- Regional planning: It's clear from the Head Start Policy Document that spatial and natural environment plan development remains a key priority, and the Government expects councils to continue their strong focus on ensuring the successful implementation of the new planning system. This is described as being "core business" for all councils, and as continuing in parallel whichever pathway a council chooses.
There's plenty for councils to think about – whether part of Head Start or not. Contact one of our local government experts if you would like help with being part of the Head Start pathway, understanding the backstop process, or thinking about ongoing statutory compliance.
