We reviewed ways to lower rates by creating incentives for councils to operate efficiently, with cost savings shared between councils and ratepayers.
Local government efficiency factor review 2017
To identify the best way to set an efficiency factor, we undertook a productivity study. The study looks at productivity trends in the sector and identified options to estimate an efficiency factor.
We used feedback on the productivity study to help inform our draft proposal on setting a local government efficiency factor. In turn, feedback on our draft proposal has helped inform our final paper on advising a local government efficiency factor.
Why set an efficiency factor?
In September 2015, we issued our final report summary on the local government rate capping and variation framework. We advised the minister that the annual rate cap should take into account changes in the Consumer Prices Index (CPI) and the Wages Prices Index (WPI), and include an efficiency factor.
The purpose of this paper is to outline our final proposal for advising the minister on the required efficiency adjustment in the rate cap formula.
- Productivity study released and open for consultation – Wednesday 13 September 2017
- Submissions on consultation paper closed – Friday 13 October 2017
- Release paper on our draft proposal to set an efficiency factor – 15 December 2017
- Submissions on draft position paper close – 14 February 2018
- Final paper advising on a local government efficiency factor – March 2018