New Zealand’s first City and Regional Deal, the Auckland Deal (the Deal), was signed earlier this year, establishing a partnership between Central Government and Auckland Council. The Deal sets out a 30-year vision for Auckland, delivered through a 10-year programme of commitments aimed at driving national economic growth and raising living standards. The Deal is built on mutual trust, collaboration, and a shared commitment to achieving improved outcomes for Auckland and New Zealand.

The Deal aims to:

• unlock economic growth;
• deliver resilient and well-connected infrastructure; and
• boost the supply of affordable, quality housing.

The Deal proposes to achieve this by coordinating land use and development, aligning infrastructure investment, upgrading transport networks, and ultimately helping build well-functioning cities.

Purpose and shared expectations

The Deal’s central target is ambitious: 2.9% higher regional GDP growth by 2045, and an additional $21.6 billion contribution to the national economy.

To reach that target, the Deal sets out ‘Expectations’ for both parties.

Central Government’s expectations are to:

• strengthen coordination with Auckland Council on shared priorities;
• help Auckland leverage its unique characteristics to lift economic performance and create regional jobs;
• enable housing growth;
• help Council improve its asset management and close its infrastructure deficits without new Central Government funding; and
• secure comprehensive adoption of key reforms, including Local Water Done Well, Auckland transport governance reform, Resource Management Act reform, and Going for Housing Growth.

Auckland Council’s expectations are to:

• work with Central Government towards the shared goal of 2.9% higher regional GDP growth by 2045 and an extra $21.6 billion contribution to the national economy;
• build a strong and enduring partnership with regular high-level engagement, including between the Mayor, Prime Minister, and senior Ministers;
• secure robust and stable long-term planning that gives investors and communities certainty;
• recognise Auckland's unique scale and characteristics; and
• pursue place-based partnerships on specific initiatives to remove barriers to growth.

Key commitments

To give effect to these expectations, the Deal sets out a series of commitments designed to generate momentum:

1. Partnership for growth: The parties commit to regular meetings and ongoing reporting obligations. Auckland Council and Central Government will also prepare to implement transport and resource management reform ahead of new legislation, including a 30-year transport plan and key projects such as the Waitematā Crossing.
2. Innovation, technology and science: A commitment to grow Auckland’s innovation economy. Priorities include launching the NZ Institute for Advanced Technology, considering support for the University of Auckland's Innovation Centre in Newmarket, considering support for trade missions to Asia, supporting Fisher & Paykel Healthcare's Drury campus, and preparatory work with NZ Steel on a product accelerator at Glenbrook.
3. Global trade, tourism and investment: The parties will jointly develop a destination and major events strategy, and will each contribute $5 million towards roofing and redeveloping the Auckland Tennis Centre to host international events. Commitments also cover developing Auckland's role as a South Pacific trading hub and improving freight access to the Port and Airport.
4. Transport as an enabler of growth: The parties will prioritise level crossing removals, the Rapid Transit Network (including the Northwest Busway and Botany-to-Airport), freight and trade connections to the Airport and Port, and initiatives to reduce congestion. They will also progress the Waitematā Harbour Connections project, with priority projects reflected in the Government Policy Statement on Land Transport 2027.
5. Natural environment and harbour: The parties will work together to realise the aspirations of Predator Free 2050, Pest-Free Auckland, the Auckland Indigenous Biodiversity Strategy, and restoration of the Hauraki Gulf's biodiversity.
6. Urban development and growth: The parties commit to develop a more responsive housing system to boost affordability, productivity, and economic growth. A new Development Levy system will also replace Development Contributions, giving councils greater flexibility to recover growth costs.
7. Priority growth areas: The Deal identifies four specific growth areas – Drury, Maungawhau-Kingsland-Morningside CRL Growth Corridor (including Eden Park), Auckland city centre, and the Auckland Airport precinct – to pursue the development and growth objectives of the Auckland Deal.
8. Other enablers of growth: The parties will work together to use funding tools to help close Auckland's infrastructure funding gap.

What the Deal does not do

Despite its ambition, the Deal has clear limits.

• The Deal does not devolve any powers or functions to Auckland Council. It operates as a coordination mechanism between Central Government and Council, not a transfer of authority.
• Central Government makes no firm financial commitment. The Deal instead establishes a co-funding model. Only if Council identifies net new funding for an initiative above its existing 2024-2034 Long-Term Plan and business-as-usual levels will Central Government work with Council to agree a level of co-funding. No additional Government funding during the first three years of the Deal is expected.

Lessons from overseas

The Auckland Deal is not the first of its kind. It draws on the model pioneered by the United Kingdom's City Deals programme, most notably the Greater Manchester City Deal (Manchester’s Deal), which similarly paired council and government commitments across shared themes.

The success of Manchester’s Deal has been mixed. While it offered real opportunities to stimulate growth and reform public services, reviews found that the arrangements were largely untested. The government had not clearly articulated what it was trying to achieve through the deals, and accountability was becoming increasingly complex as further powers and funding were devolved over successive rounds. Reviewers recommended that the government clarify the core purposes of the deals and identify who would be accountable for devolved functions.¹

The lessons from Manchester’s experience show that these arrangements only prove their worth over time, through consistent follow-through and progressively deeper collaboration.

Following the signing of the Deal, Central Government’s recent reluctance to commit to the accommodation levy policy seems a step backwards from the Commitments contained in the Deal, illustrating the kind of commitment gap that the Manchester example warns against.

The Auckland Deal is the first step. Whether it follows Manchester's trajectory toward deeper, more empowered arrangements, or remains a largely symbolic beginning, will depend on what both parties do with it over the coming years. Watch this space.

If you would like to discuss what the Auckland Deal may mean for your organisation or project, please get in touch with one of our experts.

This article was co-authored by Matthew Gould, a Solicitor in our Construction and Infrastructure team. 

Footnote

¹ UK National Audit Office, English Devolution Deals (20 April 2016).