Aotearoa New Zealand’s new coalition government has agreed to “institute long-term city and regional infrastructure deals… to fund infrastructure.” (1) National campaigned on introducing city and regional deals, following in the footsteps of other right wing governments like the UK Conservatives and Liberal Party of Australia. A relatively recent development in infrastructure financing, the form they will take in this country is still unclear. Nevertheless, it is important for Councils, iwi, hapū, and infrastructure providers to begin thinking about what these deals could mean for addressing infrastructure issues in their backyards. In this paper, we take our best shot at demuddying the waters.

City Deals are agreements between Central governments and ‘economic regions’ designed to deliver significant infrastructure (both physicaland community) projects and associated economic uplift.

City Deals are designed to increase collaboration and cooperation between central and local governments working towards a shared visionfor the ‘economic region’ - which may be part of a city, a territorial authority area, regional council area, urban growth partnerships, or some combination of these. He piki tūranga,he piki kōtuku: The future for local government report identified City Deals as a type of “placebased agreement” that would be useful to “drive long-term, large-scale wellbeing improvements at place in a way that shines light on local priorities” (2). The cooperative approach usually means decision making power is devolved from central government to local governments in the economic regions.

How have they worked overseas? Evidence from the United Kingdom and Australia shows some teething problems.

31 City Deals have been signed in the UK, with 2 being negotiated as of January 20233. UK City Deals primarily prioritise investing in Infrastructure and Job Creation to improve GVA. Manchester has one of the oldest city deals and is generally considered the most successful. Key elements of this deal are its transport focus, binding governance and decision making structure, and an ‘earn-back’ scheme which allows the local governments to recoup a portion of national tax revenue generated by the investment (4).

Benefits of the City Deal initiative include greater cooperation between local authorities who are incentivised to focus on shared benefits, the perception of improved local control and decision making, which has assisted with engagement, and more rigorous decision making process for infrastructure investment. Critics of the UK experience have pointed to opaque negotiation, decision making, reporting, and accountability processes, variable benefits resulting in unequal geographies, and central government withholding negotiations as a stick to incentivise regional government policy reforms (5, 6).

Australia’s City Deal programme is newer, beginning in 2017. Australian City Deals are predominantly partnerships between Federal, State/Territory, and Local governments who co-fund infrastructure and development projects. Initiatives typically include significant infrastructure (e.g. stadium) re/development, creation of innovation precincts, and enhancing digital economies. Key milestones and some metrics are included in City Deals, however metrics/ KPIs are often not established during negotiations, instead being developed as part of a later implementation plan. Many metrics are somewhat basic - typically population growth, economic growth, employment data, etc, with some specialty metrics like number of patents registered.

Launceston, Tasmania’s deal includes 3-yearly implementation reviews (7). The first review was primarily positive, with improvements on all-but two metrics, positive stakeholder feedback, and general economic growth. However, it also recommended refreshing outcomes, objectives, and metrics to be more meaningful. These reviews are good to show accountability and an impetus to refresh the deal if needed.

City Deals in Aotearoa New Zealand are an opportunity to further existing urban development agendas and continue relationship building. There is no need to rewrite the rule book.

There is already recognition of the need for greater regional planning and cooperation in Aotearoa New Zealand. This is seen in Urban Growth Partnerships like the GCP, WRLC, SmartGrowth etc. The short-lived RMA reforms also included the formation of Regional Planning Committees who will be responsible for developing Regional Spatial Strategies and Natural & Built Environment Plans (8).

Evidence from the UK and Australia show that transport infrastructure have often been successful projects funded by City Deals. This highlights the potential benefit of growth catalysed by GoldenTriangle rail improvements, or mass transit proposals in Auckland, Wellington, and Christchurch.

What is a clear ingredient for a productive City Deal is genuine commitment to working together, and partnership.The growth of Spatial Planning in recent years has allowed local governments to strengthen their distant planning muscles, being able to identify what key priorities for growth and urban change are in the coming decades - as more urban environments produce Future Development Strategies, the ability to partner and collaborate is also growing. Central government (both politicians and agencies) need to come to the table being prepared to accept the visions of our local authorities and all parties need to have mutual trust and confidence in each other to succeed. This will require, especially from the politicians, putting ideological aversions to certain projects to bed and keeping their promise to “reshape the relationship” with local government.

Mana whenua participation in governance and decision-making will need to be significant to meet Te Tiritio Waitangi obligations, enable tino rangatiratanga, and recognise mana whenua role as kaitiaki. While this might be difficult given some of this government’s manufactured hysteria about co-governance, it is essential so that any deal is truly representative of the long-term aspirations and vision of an area. A quick review of Australian City Deals reveals an inconsistent approach to including Indigenous decisionmakers, values, and aspirations in the agreements and governance arrangements, in some cases promising to consult on cultural matters, while others include Aboriginal representation at all levels of implementation. This ad-hoc approach simply wouldn’t fly in Aotearoa New Zealand - the government needs to be clear what commitment it is making to Māori in any City or Regional Deal programme.

Finally, integrated Outcomes Monitoring & Evaluation frameworks should be a key element of City Deals. Our public sector is accustomed to looking beyond financial & economic metrics when evaluating the success. Taking elements of a wellbeing approach, or implementing metrics from (for example) the Living Standards Framework would be useful to give life to the proposed outcomes of any City Deals.

Local and regional government should start thinking about and articulating what they might want out of a City Deal.

We still know very little about the shape and size of Cityand Regional Deals in Aotearoa New Zealand, but we think its really important to begin thinking about what they might contain. It is clear that the infrastructure financing and funding game is changing - with indications that there will be fewer grants akin to the Infrastructure Acceleration Fund, or Central Government led projects; instead authorities will be incentivised to work with the private sector to fund infrastructure and rewarded for delivering projects or presenting comprehensive delivery plans. Hopefully we’ll hear more early next year. Whenever we do, we’ll be hoping that the government is committing to a genuine partnership with councils and mana whenua, and to ensure that any dealsare embedded with strong outcome metrics.

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^{1. Coalition Agreement - New Zealand National Party & ACT New Zealand, 54th Parliament}

^{2. He piki tūranga, he piki kōtuku The future for local government: p43}

^{3. City Deals - UK House of Commons Library}

^{4. Introducing UK City Deals - KPMG}

^{5. (PDF) City Deals, Decentralisation and the Governance of Local Infrastructure Funding and Financing in the UK}

^{6. City Deals: - UK Centre for Cities}

^{7. Launceston City Deal Three-Year Implementation Review Report}

^{8. Key components of our future resource management system| Ministry for the Environment}