Increased local government focus on risk and resilience

Local government has a growing focus on risk and resilience with two key Local Government New Zealand-led (LGNZ) pieces of work underway on managing natural hazards risk and insurance.

LGNZ President Lawrence Yule says this work is important to ensure our communities and local infrastructure are more resilient in the face of natural hazard and other risks.

Last week LGNZ launched its think piece ‘Managing natural hazard risk in New Zealand – towards more resilient communities’.

The think piece finds that local government needs to be well-prepared and should sharpen its management of risks because communities are increasingly reliant on external services and infrastructure for daily survival and communications.

“The proportion of the population whose health and welfare is inextricably linked to lifeline services such as electricity, water supplies and wastewater services, and to unencumbered access to the internet for primary communication and centralised large format shops for essential items, is greater than ever before,” LGNZ President Lawrence Yule says.

“’Just-in-time’ supply chains and outsourcing of services in business, coupled with reduced spare capacity and interdependence in infrastructure networks mean that a single localised even can have significant and widespread consequences.”

The second key piece of work is the Local Government Insurance Review. Adequate risk management and provision of insurance is another important factor in mitigating the impact of natural hazards. Following the Canterbury earthquakes, the price and extent of insurance available to local authorities has changed, creating extra costs.

LGNZ’s Insurance Market Working Group has met monthly since June to discuss the findings of the NZ Local Government Insurance Market Review penned by Craig Stobo. Its work to date recommends councils spend more resources on risk profiling, risk management and risk mitigation to improve self-reliance and resilience in infrastructure.

The Group is now considering a business case exists for the creation of a risk management entity. Such an agency would focus on creating a local authority-owned entity to advise on risk management and insurance on behalf of the sector, and ties in with the work LGNZ is doing on the LGNZ Local Government Funding Review and 3 Waters project.

“The sector needs to think smarter about self-reliant, sustainable solutions for key infrastructure such as roading and the three waters, including optimal local authority protection from the volatile global insurance market,” Mr Yule says.

“Local government needs the necessary tools and adequate information to ensure risk and resilience provisions are in place for the best interest of communities with the ability to make sound planning and policy decisions.”