Early in 2026 I wrote two articles on water reform's impact on councils and the leadership profile it demands of chief executives. Amalgamation is not a separate story. It is the same story, arriving faster and landing on the same people.
Head Start proposals closed on 9 August. Ministers are considering them, with detailed design running from October to March and implementation ahead of the 2028 local elections. For most councils outside Auckland, the debate about whether to amalgamate is effectively over. What remains is practical: several operating councils have to become one organisation while still delivering services.
That means combining executive teams, finance and people functions, communications, policy and strategy capability, systems, employment arrangements and cultures. There will be duplication and some of it will go. I am less convinced the reductions will be as large, or as fast, as the business cases suggest.
The two reforms land on the same staff
Water reform removes a technically deep workforce and the management layers above it. Amalgamation then targets the corporate functions that remain. Both land on the same band of staff, tier two through tier four, in the same regional labour markets, within the same two years.
A council that has already lost its three waters capability, and is now consolidating finance, HR, communications, policy and strategy with two or three neighbours, is not absorbing one restructure. It is absorbing two, and the people expected to deliver the second are still recovering from the first.
Where the savings actually come from
Auckland remains our most useful reference point. In the year to November 2010, the eight councils and associated organisations that became Auckland Council reduced from 9,430 FTE to 8,207 on day one, a cut of around 13 percent. The more useful numbers sit underneath that headline, because the reduction was heavily concentrated in management:
Tier | Before amalgamation | Planned day one | Change |
Tier two | 88 | 42 | -52% |
Tier three | 403 | 176 | -56% |
Tier four | 1,523 | 614 | -60% |
Tier five and below | 7,403 | 7,367 | -0.5% |
Source: Auckland Transition Agency, planned staffing at 1 November 2010.
That last row is the one to sit with. Combining councils does not halve the number of building consents, roads, libraries, parks, customer enquiries or regulatory obligations. Almost all of the operational workload survives. The duplication that can genuinely be removed sits in management and in enabling services, where several organisations maintain separate finance, people, communications, policy and governance functions.
Two things follow. A flat percentage reduction across the workforce produces a business case that does not survive contact with the organisation. And the people carrying the largest share of the cut are the same people who have to run the transition.
Do not bank the savings too early
New South Wales is the clearest warning available. Following the 2016 amalgamation of 42 councils into 19, the NSW Auditor-General found that benefits plans in three of the new councils did not anticipate material savings from workforce reform in the first three years. Estimates were revised down sharply: Inner West from $88 million over 20 years to $60 million over 10.
The reasons were practical. Councils first had to settle service levels, align employment arrangements, integrate duplicated IT systems and complete organisational design and internal recruitment. Statutory staff protections were the biggest constraint on pace: non-senior staff could not be made redundant for three years or relocated outside their former boundaries, and vacancies had to be advertised internally first.
New Zealand has not settled the equivalent question. There is no enabling legislation for this programme yet, so the employment protections that will apply remain undecided. That single setting will do more to determine the shape and timing of workforce savings than anything in the business cases now sitting with Ministers.
Auckland's reduction was also real but not permanent. Group FTE was back above the pre-amalgamation total within about two years and reached 11,181 by 2021/22, against 9,430 before, driven largely by population growth. Amalgamation resets the baseline once. It does not change the growth trajectory.
The leadership risk nobody is costing
If three councils amalgamate, there may be three CFOs designing one finance function, several people leaders designing one structure, and multiple chief executives contributing to a transition that will require one. They hold most of the knowledge needed to make it work while carrying the greatest personal uncertainty. Of the 19 interim general managers appointed at the 2016 NSW amalgamations, only three were still in the role by the 2019 audit, at an average tenure of under 18 months. North Yorkshire, which brought eight councils together in 2023, appointed its chief executive early enough to shape and select the tier two and three structure.
The chief executive profile an amalgamated council needs is also not the one that ran the legacy councils. As I argued earlier this year, the role now leans towards community and development partnerships, negotiation across entities including the new water organisations, and internal system performance. Selection should be against that future profile, not seniority in the largest legacy council.
What happens to the people who leave
Councils amalgamating in one region release similar capability into the same market at the same time: three senior HR roles, several communications and strategy teams, three executive structures. The new organisation will not want all of them.
That plays out differently in Timaru, Whakatane or Whangarei than in a large city, where a displaced senior manager may have 20 years invested in one region and few comparable employers within commuting distance. Wellington showed recently what happens when many similar professionals enter one market at once. SEEK reported Wellington job advertisements down 42 percent year-on-year in May 2024, against a national decline of 30 percent, and Wellington did not record year-on-year growth in advertised roles again until around May 2025.
Regional absorption takes years, not months, so sequencing exits in tranches matters as much as the support offered. Most displaced employees keep living in the communities the new council serves, so a poorly handled restructure leaves a legacy past the final redundancy payment.
The real amalgamation task
Amalgamation can create real opportunity. But the evidence from Auckland, New South Wales and North Yorkshire points one way. Workforce savings are more concentrated, slower and less permanent than a merger business case implies, and the transition succeeds or fails on people rather than structure. Three things would improve the odds:
Build the workforce dataset now, before decisions land rather than after.
Appoint the chief executive early, against the post-water profile rather than legacy seniority, and give them the tier two and three structure to design.
Plan and sequence the exits, with transition support costed into the programme rather than found at the end.
Boundaries, representation and governance will take most of the attention through detailed design. Those decisions create the new council legally. Getting the people across the boundary is what will make it work.
David Hammond is Head of Consulting & Public Sectors with Tribe Executive. For a conversation on for-purpose board or executive consulting, strategic positioning, or getting the right leadership in place for an M&A future, contact him at david@tribegroup.com or +64 27 444 6368.
Sources
Hammond, D. Will water reforms fix council metrics, or simply move the pressure? LG Magazine, Part I. Hammond, D. Part II: Post the Waters Exit - "We have less room to hide." LG Magazine.
Auckland Transition Agency, Staffing numbers - Auckland Council and its subsidiaries, 28 September 2010.
Auckland Council, Information about our staff, staffing levels 2010/11 to 2021/22. aucklandcouncil.govt.nz
Audit Office of New South Wales, Workforce reform in three amalgamated councils, Report 317, 1 May 2019. audit.nsw.gov.au
Local Government Association (UK), Building a new council: HR lessons from North Yorkshire's transformation. local.gov.uk
SEEK New Zealand, Employment Report - May 2024; SEEK NZ