Why More (Management) Delivers Less

Introduction

Hamilton City Council’s 2023-24 budget revealed that nearly half of the collected rates revenue ($122.7 million of $255.7 million) was allocated to staff salaries - Hamilton City Council Long Term Plan (LTP). This raises concerns about the growing influence of managerialism - a bureaucratic approach that prioritises management and administrative control over direct service delivery. This article examines how managerialism has shaped HCC’s spending, the impact on ratepayers, and potential reforms to restore efficiency and accountability.

Understanding Managerialism in Local Government

Managerialism refers to the dominance of corporate management techniques in public institutions, emphasising efficiency, performance metrics, and hierarchical control. This model has been embedded in New Zealand’s local government since the 1980s, when reforms introduced chief executives, performance-based contracts, and financial accountability measures. While intended to improve governance, excessive managerialism often leads to bloated bureaucracies, increased operational costs, and a focus on internal processes rather than public service delivery.

Hamilton City Council’s Budget and Managerialism

The Council’s 2023-24 budget highlights a managerialist structure where staff salaries consume 48% of rates revenue. This is significantly higher than expected for a city council primarily tasked with delivering infrastructure, maintenance, and community services. The average salary for HCC managers is $117,000, with 290 staff earning over $100,000 annually and the CEO receiving $440,000. Despite these high salaries, many ratepayers feel that service quality has not proportionally improved. Complaints about delays in basic city maintenance, slow permit processing, and inefficient resource allocation suggest that a top-heavy administrative structure may be diverting funds from essential services.

Criticism of Managerialism in Hamilton City Council

1. Bureaucratic Expansion and Inefficiencies

Managerialism often leads to excessive layers of management and administrative expansion. Hamilton City Council has a large number of mid-tier managers, consultants, and administrative staff whose roles are not always directly linked to service improvements. Former city officials and ratepayer groups have criticised the council for producing voluminous reports, strategies, and compliance documents while neglecting core responsibilities like road maintenance, waste management, and community facilities.

2. Focus on Process Over Public Outcomes

Under managerialism, performance is often measured by internal targets and procedural compliance rather than tangible improvements. HCC’s budgeting prioritises internal financial controls,risk management, and bureaucratic documentation over community needs. For instance, despite rising staff costs, some services have been delayed or underfunded, frustrating residents who expect visible improvements in their neighbourhoods.

3. Lack of Accountability Among Senior Management

Despite running operational deficits in recent years, senior HCC executives have continued to receive pay raises and bonuses. The absence of direct accountability mechanisms means that poor performance does not always lead to leadership changes. Ratepayers and elected councillors often struggle to evaluate the effectiveness of senior management, as most council reports emphasise procedural success rather than service outcomes.

Recommendations for Reform

To address these concerns, Hamilton City Council should adopt a more balanced approach that retains managerial efficiencies while reducing bureaucracy and increasing transparency. Key recommendations include:

1. Right-Size the Bureaucracy: Conduct a full review of staff roles and salary allocations, reducing unnecessary middle-management positions and focusing on frontline service delivery.
2. Increase Accountability for Senior Management: Establish clear performance benchmarks tied to community outcomes rather than internal compliance.
3. Refocus on Core Services: Prioritise infrastructure, parks, transport, and waste management over administrative expansion.
4. Enhance Transparency and Public Engagement: Publish clear, publicly accessible data on staff salaries, performance targets, and budget allocations.
5. Adopt Lean Management Principles: Encourage efficiency-driven reforms, such as reducing unnecessary paperwork, streamlining internal processes, and adopting digital solutions to cut operational costs.

Conclusion

While managerialism has introduced structure and accountability to local government, its overuse in Hamilton City Council has led to excessive bureaucracy, high staff costs, and questionable value for ratepayers. To ensure that rates revenue is used effectively, HCC must rebalance its priorities, reduce administrative inefficiencies, and focus on delivering tangible community benefits. By implementing targeted reforms, the council can enhance service delivery, build public trust, and create a more efficient and transparent local government.

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