LOCAL BODY SPENDING

Press, Volume CVI, Issue 31112, 15 July 1966, Page 1

LOCAL BODY SPENDING

Greater Control Held Necessary

(Hew Zealand Pres.y Association)

WELLINGTON, July 14. Greater control over local authorities’ spending was necessary in New Zealand, Professor R. Sidebotham, professor of accountancy at Victoria University, said today. He told the Institute of Public Administration that local authorities suffered few legal or institutional restraints in providing finance for development schemes.

There was no limit on the amount of rates they could levy, nor restriction on the use of rate income for capital works.

Local bodies also were not much restricted in raising and using loan monies. The Local Authorities’ Loans Board’s sanctioning of the loans seemed to be limited to ensuring that the purposes of the loan were locally desirable and that proper provision for repayment would be made.

With more than 1100 local authorities throughout the country—all giving inadequate financial reports—it was impossible to determine any degree of loans priority. “Something like 10 per cent of the national income is spent by local authorities,” he said.

“Much of it is spent in development work, and the most economic and fruitful use of funds could only be achieved if there were some system for national, or at any

rate regional, determination of priorities,” he said. “The amount and discretion of development work in local government seems to be at the unco-ordinated discretion of the local bodies,” said Professor Sidebotham. Local bodies’ prescribed method of presenting financial reports made it impossible to tell how much development work had been financed from rates and how much from the transfer of payments from trading accounts. This could well be worth inquiry. Professor Sidebotham said that too many local bodies were too small to employ the professional staff necessary to construct and operate development programmes. The separate existence of territorial and ad hoc bodies bedevilled cohesive planning even in major urban areas. Theoretically the answer was to amalgamate local authorities till they became an efficient body, to submit all development schemes to a central or regional body, and to equip the Loans Board with power to control not only loans but capital expenditure of councils, he said.