Prime Minister John Key has acknowledged concern within the local government sector about a government review of the way councils are run.
The review of the Local Government Act focuses on the financial management of local bodies, including what should be treated as core council services.
Mr Key told a conference of Local Government New Zealand in Christchurch on Monday that he knew some of those attending were concerned about the process.
He said the Government wants to work with the sector to find common ground on the proposals.
Mr Key said central and local government are facing difficult challenges because of the recession and both need to prioritise spending to provide better services.