In this section of our website, we give you our views on local, regional, national and international government and governance. We welcome your comments.
Anyone following local government through the media recently may have come across the term demarcation zone. on close acquaintance, it is shorthand for a potentially radical change in the role of local government.
It's a proposal which has come out of work by a Wellington based public policy think tank which has been looking at how to deal with issues of poverty. Briefly it argues that the conventional central government approaches to intervention have failed a number of New Zealand communities (some of the evidence for this is in the recent Productivity Commission report More Effective Social Services). Drawing on experience with special economic zones, the think tank argues the conventional rules and practices for managing social service expenditure should be set to one side, and resources devolved to the local community - details are slim but it appears that the idea is for a group of respected local leaders to oversee a new approach to social service spending.
The proposed demarcation zones are the districts of three local authorities all of which are relatively impoverished (Far North, Rotorua and Gisborne). Although the proposed role for the individual local authorities is unclear, it does seem that they would be expected to play an integral part if only because of their relative capability, administrative strength and representative role on behalf of their communities.
There are echoes of the devolution agenda of the present UK government the focus of which is on devolving responsibility to groups of local authorities for significant areas of public services including employment and skills related services and in some instances expenditure on health services.
For an initiative like this, implementation is clearly something which needs to be well thought through, carefully managed and well able to provide a better service to people in need. Even with the years which the UK government has invested in developing its devolution proposals, there are still significant question marks. For New Zealand with no history of this type of devolution, the demarcation zone proposal is very much a leap of faith.
Put that to one side (it's going to be closely scrutinised by officials) and think of the role of local government. In the UK local government has long had a significant role in the delivery of major social services, with funding provided by central government. The past few years of austerity have highlighted the risk of this involvement. Government has been drastically reducing funding but the service obligations have remained unchanged. Currently social care (care for older people including both in home and rest home care) is under extraordinary stress. Perhaps as many as 1 million older people are not receiving care to which they are entitled, many care home operators are exiting the industry or going into liquidation because they cannot manage on the now inadequate funding they receive and the National Health Service faces an increasing problem of beds occupied by older people because there is nowhere for them to go if they are discharged.
This highlights at least a couple of questions for New Zealand councils which might be tempted by the demarcation zone proposal (leaving aside any questions about capability and implementation). The first is should councils take the risk that a government may devolve responsibility and associated funding and then at some later stage reduce or remove the funding while leaving the responsibility in place? The present UK experience, and the approach which New Zealand's government has often taken to funding services delivered by third parties, both suggest that this is a very real risk and one which should only be taken on after careful consideration if at all.
The second question is what is the proper role of local government in any event? The dilemma which councils in the UK now face is that they should be acting as advocates on behalf of their communities to ensure they receive the level and standard of service to which they are entitled, but too often it's the very councils themselves who are failing to deliver. The fact that it is a consequence of under-funding on the part of government is virtually irrelevant in terms of the conflict which councils face and the options they have available to them.
Council should certainly be taking a much closer interest in the nature and quality of the services which their communities receive and the performance of those agencies responsible for service delivery. Rather than seeking devolution, with all the risk and responsibility which goes with that, wouldn't it make better sense for local government to develop the advocacy and leadership skills needed to bring government agencies and others together, ensure effective coordination, and play a lead role in determining what services are required and making sure they are delivered.
Several recent items in the New Zealand Herald - editorials and opinion pieces from experienced senior journalists - have painted the elected members of Auckland City Council almost as powerless eunuchs. To quote from a recent item:
"The council has looked to be ...unable to exert much influence on the largely autonomous "council-controlled organisations" Auckland Transport, Watercare, Auckland Trade, Events and Economic Development and others.
"But even more seriously, as Goff and other candidates acknowledged during the campaign, the elected council has seemingly struggled to impose its will on its own officers and staff.... The constitution of the council reflects a theory of governance that gives "operational" decisions to the officers as an executive body and restricts the right of elected representatives to "interfere" in its operations. It can only ask questions of the chief executive, and fire him if it comes to that."
Neither assessment is correct. Both reflect what may be the real failing of the supercity in its first six years, a real lack of understanding by elected members of what their powers actually are.
Both also reflect a real threat to the exercise of local democracy. When one of the country's most authoritative sources tells councillors they are relatively powerless, don't be surprised if most councillors actually believe this to be the case. This is very much misinformation undermining the role of elected members.
Look first at the governance of the Council. The local government act is not especially helpful in the way in which it is drafted but go through it carefully and the power of elected members becomes quite clear. Section 41 (3) states: "A governing body of a local authority is responsible and democratically accountable for the decision-making of the local authority."
There's plenty of authority looking at the role of public sector entities to make it clear that decision-making certainly encompasses at least anything which impacts on the quality of the service which citizens receive. To take recycling as an example,decisions about how many bins, when collections will take place, whether they are from the back door or from the pavement are all part of the decision-making of the local authority and thus the responsibility of elected members.
The role of the chief executive is spelt out in section 42. It includes "implementing the decisions of the local authority" and "providing advice to members of the local authority and to its community boards, if any". Again to take recycling, this gives the chief executive discretion to decide whether the service should be provided by the Council in-house, contracted out to one or more providers, or simply left to the market with residents and recycling contractors required to meet Council standards (and even this latter option would become a decision of the Council as it would require a Council bylaw) but in each case so long as the arrangement the Chief Executive chooses to implement delivers the nature and quality of service which the Council has decided people should receive.
The same applies to any other Council service. On any question of whether or not a particular service should be available, of the service level standards to which it should be delivered, or of how it is paid for (rates, user charges), then that is a decision for the Council not executive management.
The waters are muddied a little by the provision that the chief executive is responsible for providing advice to members of the local authority. There can be an inherent conflict of interest if the chief executive is being asked to provide advice on (say) how best the Council can exert its authority over management, or where to draw the boundary between what constitutes decision-making and what constitutes implementation.
The answer, which few or no councils actually apply, is for elected members to establish a clear policy themselves and ideally establish what we would think of as a business committee responsible for overseeing how these questions are resolved, how business comes to the Council (what kind of agenda for example) and generally how the elected member/executive management relationship is managed.
This should include the opportunity for elected members to decide whether and in what circumstances they should be able to seek and receive independent advice. for a council the size of Auckland, and with the responsibilities it exercises, it's close to intolerable that elected members (other than the Mayor with the resources of the mayoral office) have no independent source of advice to assist them assess the recommendations placed before them by management regardless of the scale of the expenditure involved, or the risks which the Council might be assuming.
Similar issues arise with Council controlled organisations. The Herald view of these as autonomous organisations quite likely reflects the common view but it does not reflect what the Local Government Act provides. The boards of Council controlled organisations are required to manage them in accordance with their statement of intent. Councils have a great deal of discretion regarding what should go in the statement of intent and the real issue is whether or not elected members actually understand the extent of their power and have the capability (and advisory support) which allows them to properly exercise the powers which they have.
As a separate issue, councils also need to properly monitor how CCO's behave, and insist on compliance with statements of intent. In the case of the Ports of Auckland Ltd, both Auckland Council Investments Ltd (at the time the holding company for the Ports of Auckland Ltd) and the Ports of Auckland Ltd had requirements in their statements of intent to apply a no surprises policy which they clearly failed to do in respect of the Britomart expansion proposal. A question worth considering is why those boards of directors were not held to account for a clear and serious breach of the statutory obligation to manage in accordance with the statement of intent.
The new Council in Auckland, and councils elsewhere in New Zealand, should make their first priority understanding just how strong their governance role actually is and how best to exercise it.
It’s both a dilemma and a frustration for local government in countries such as Australia, New Zealand and the United Kingdom that higher tiers of government have virtually untrammelled freedom to intervene, not just in the regulatory sense in terms of what local government does, but to reshape it as they see fit.
Sometimes, as with the Kennett government reforms in Victorian local government in the mid-1990s, dramatic change is imposed with minimal consultation - the government knows what it wants to do and does it.
Sometimes governments do go through quite extensive processes of collaborative working with local government, but then move on to unilateral restructuring if they think they are not getting where they want to be - the 2007 restructuring of local government in Queensland is a good example.
Does it have to be this way? Surely it makes sense for two different tiers of government, both in the business of serving their respective publics, to try and make common cause in how best to do so? This should be all the more the case with the growing evidence that even for those major social services which will always be funded by a higher tier of government, the kind of local knowledge, networks and community input that only local government can generate can have a major impact on the effectiveness and cost of provision.
New Zealand and Australia
Currently there is a heightened interest on both sides of the Tasman in reshaping local government. New Zealand’s government has recently legislated a new reorganisation process which it hopes will make it easier to get council amalgamations approved, but is currently leaving the outcome to due process and the Local Government Commission. The New South Wales state government is in the middle of a major review of the future of local government which includes a commitment to “no forced amalgamations”. There’s a sense that sooner or later the Victorian State government will again review the structure of local government (but with the feeling that later is the operative word given the slim majority that government has, and memories of the backlash against the Kennett government for imposing reform).
Common to both the New Zealand and New South Wales approaches, and to the Queensland government’s initial engagement through the Size, Shape and Sustainability review, is the apparent belief that given sufficient incentive, local government will find ways of reforming itself. But this is this really a sensible expectation?
What can we learn from New South Wales?
The New South Wales review provides a very good case study. Both the Independent Panel on Local Government Reform, and the Destination 2036 process
out of which it came, have placed a strong emphasis on encouraging councils to develop their own solutions. However, the Panel has also gone to considerable lengths to make it clear that change is inevitable, simply because of the changed environment in which local government functions, and the challenges it now needs to deal with.
Among other things, it has emphasised the importance of strategic capability - councils with the scale and resilience to deal with the complex issues the sector now faces - and the need to address the very large number of councils responsible for the governance of Sydney (this is partly a matter of number; partly of strategic capability and partly a matter of some reasonable consistency in size and scale).
The New South Wales approach is probably as good an example as one could hope for of an initiative that really recognises the value of local government, and the importance of enabling councils to make their own decisions about their future if it all possible.
What’s the likely local government response? On 19 February the North Sydney Regional Organisation of Councils released a press statement
that it would fight mandatory amalgamations, and suggesting that greater collaboration among councils was the way ahead. Another Sydney Council has set aside a $AU50,000 fighting fund for the same purpose.
More generally, there seems to be a sense across New South Wales local government that not too much is wrong with the status quo, and the government should not be considering major change.
It’s early days yet, but there is a worrying sense that New South Wales local government may be in the early stages of the journey Queensland took: of failing to take full advantage of the opportunity to develop its own credible solutions to the very real challenges local government now faces.
Is local government in fact able to embrace major reform?
It does raise the substantive question of whether local government, left to its own devices, really has the capability to embrace major reform. In part this simply may be that the drivers for change are not part of the everyday understandings of the typical elected member or council manager (globalisation, demographic change, the inexorable rise of metropolitan centres). In part, it may simply be the otherwise normally desirable fact that elected members are committed to their communities, as currently defined
, and genuinely find it hard to embrace any change which they see as compromising the community’s independence.
On the track record of higher tiers of government, the almost inevitable outcome is forced amalgamation if local government is not prepared to put its own house in order. Commitments to no forced amalgamations do not last forever; they are more likely to be revised at the next state election.
Do we need a different approach?
We know from experience that forced amalgamation comes at a cost. It’s not just financial, but also personal both for employees and elected members, and the many people in the communities councils serve. The obvious difficulties in achieving change directly raise the question of whether we need a different approach to encouraging voluntary amalgamation. Is it time to question whether this is primarily a matter to debate between local government and higher tiers of government, or whether we need a much broader dialogue, and one which allows the time for communities to make informed judgements?
This week I have been at the International Congress of the Institute of Public Administration Australia.
It was a startling contrast with the work I have been doing in New Zealand contributing to public debate on the government's proposed local government reforms - which are largely designed to pull local government back to its 'core' activities and restrict it from straying too far into promoting social, cultural, economic and environmental well-being.
Among the distinguished international speakers (in this case by video link) was Prof Ed Glaeser from Harvard celebrating the extraordinary success of cities as mankind's most significant invention, essentially showcasing local government's triumphs.
At the Congress I had the privilege of chairing a presentation by John Walsh of PwC on Australia's proposed National Disability Insurance Scheme which came out of a Productivity Commission report into disability care and support. It is to be a national scheme with common standards and conditions of entitlement across Australia, and national level governance. Crucially, however, services themselves are to be determined and delivered locally with an expectation that community-based organisations and other local networks will be the principal service providers. It is a clear endorsement of the importance of the ‘local’ in facilitating the effective delivery of services to meet nationally determined needs.
Which way is the pendulum swinging? In New Zealand's direction of restricting local government (and, by inference, community initiative); towards Ed Glaeser's vision of cities as mankind's greatest achievement (and thus a celebration of the success of local government); or towards Australia's acknowledgement of the crucial role of community-level determination and delivery of services to meet specified needs?
The weight of evidence, and current experience (as an example, the English emphasis on open public services which is again a clear statement of the pivotal role of community based decision-making) suggests a stronger role for communities and their governance, including local government. The pendulum is definitely swinging, but its direction is towards greater local autonomy and a stronger, not weaker role for local government and local governance.
In countries such as England, Australia and New Zealand, there seems to be something almost irresistible about the temptation for higher tiers of government to keep changing not just the rules of the game, but the players as well.
It could be read just as bureaucrats and ministers wanting to tinker with whatever is in their portfolios. Or perhaps it’s something more fundamental at work?
Perhaps the real issue is not so much higher tiers of government, as how people in local government themselves think about their place in the universe.
What really started me thinking is an issues paper which the Greater Wellington Council has just published as part of a review of options for the future of local government in the Wellington region (http://www.wellingtonreviewpanel.org.nz/DownloadFile/Review-Panel-Website/Resources/Wellington-Region-Local-Government-Review-Panel---Issues-Paper).
In considering the constitutional place of local government (the review group is chaired by a constitutional lawyer and former Prime Minister) the issues paper concludes:
But it is incontestable as matters now stand that in constitutional terms local government in New Zealand depends upon the policies and expectations of central government.
It's part of a wider belief, in much of local government, that councils are "creatures of statute" and thus subject to the whim of the governments which enact the statutes. I've always found this slightly puzzling. The major corporations which dominate our private sectors are also "creatures of statute" in the sense that they owe their existence to legislation. We don't however read of the captains of industry saying that they depend upon the policies and expectations of central government - indeed, to many observers reflecting on the global financial crisis, it's almost the other way round.
Is the real problem that people in local government, including elected members, think of themselves as part of a subsidiary form of public sector body, rather than as the community's leaders. Why, when governments set out to reform local government on the usual and often populist grounds of inefficiency, poor performance, etc, isn't there a strong up welling of resistance?
Maybe what we are really witnessing is not so much the dependent constitutional position of local government, as the result of a lack of strong public support for the role of local government, because local government doesn’t see itself as the communities’ leaders.
But if this is the case, then rather than worrying about the constitutional position of local government, should we really start focusing on how to reconnect local government with its communities so that they in turn genuinely value it as a mainstay of local democracy – one they are prepared to defend?
On 3 May, ten of England's largest cities outside London voted on whether they should have an elected mayor with substantial, but as yet undefined, executive powers.
For England it is a reflection of a growing acceptance that the Centre by itself cannot achieve the outcomes it seeks either for the economy, or in broader social and quality of life terms. It's part of the current coalition government's emphasis on greater devolution.
It is also a fascinating shift in thinking about how we govern our societies, with very real implications for other jurisdictions such as most Australian states and New Zealand which are currently reviewing their local government arrangements - how should we think about the role of cities, and indeed what cities actually are?
Sir Michael Lyons gave real impetus to this rethinking with the emphasis on ‘place shaping’ in his 2006 report on English local government. Central to this was his stress on functional rather than legal/jurisdictional boundaries.
It's at the heart of the current English debate. Yesterday’s referenda are for cities with their currently constituted boundaries. Many in England now argue that the real issue is not city mayors, but city-region mayors much like the Mayor of Greater London - see recent output from the Centre for Cities
as one representative voice among many making this argument.
There are signs the government may agree. Its City Deals initiative Unlocking Growth in Cities
which offers cities significant devolved funding, is more focused on the functional than jurisdictional boundaries, emphasising that " To unlock their growth potential, local leaders in the core cities will need to work effectively across their economic footprint".
The same document strongly suggests that cities will find it much easier to qualify if they have opted for the elected mayor option - and indeed the first City Deal has been done with Liverpool which moved early to an elected mayor.
What should all this mean for the debate in those Australian states, and New Zealand, where the future structure of local government is again on the table? In New Zealand, the debate is dominated by an "Auckland too” flavour. A common theme is that other regions of New Zealand (groups of territorial local authorities within the boundaries of a single regional council - a body with primarily environmental management responsibilities) should follow the Auckland precedent of forming a single council for the entire region, covering both regional and territorial functions.
But is this consistent with modern thinking about cities, functional boundaries and economic footprints? New Zealand's capital city region, Wellington, is in the early stages of the debate over whether its regional council and eight territorials should form a single unitary council. Wellington's economic footprint extends well beyond the formal regional boundary. It's at the southern end of the North Island; it's not too hard to make a case that councils at the northern end of the South Island are within Wellington's economic footprint.
The situation is potentially more dramatic in major Australian states. Sydney's economic footprint unquestionably runs from at least Newcastle in the north to Wollongong in the south. Melbourne's almost certainly encompasses the principal regional centres outside the Melbourne metropolitan region as normally understood - Geelong, Ballarat and Bendigo.
In a world in which increasingly cities compete with cities, and competitive advantage depends very much on how well governance arrangements complement economic realities, does it make sense to think about restructuring local government without aligning decision-making with the economic footprint of at least our major centres?
And alongside this, how do we cope with the equally important emphasis now placed on governance at the very local level? A useful insight into how this is starting to evolve is provided in a recently published report from the Australian Centre of Excellence for Local Government on Evolution in Community Governance: Building on What Works
which highlights the growing extent to which people want to be directly involved in decisions which affect the place where they live.
The new UK Localism Act suggests that the UK Government may have accepted, finally, that local communities can take local decisions without the world coming to an end (but the acceptance may be conditional - there is still a great deal of opportunity for ministerial intervention).
The New Zealand Government has decided that it's time to get local government concentrating on core services. The current purpose of promoting economic, cultural, social and environmental well-being will be repealed, and instead councils will be required to focus on the provision of “good quality local infrastructure, public services and regulatory functions at the least possible cost to households and business”.
Common to both England and New Zealand - and a number of other Commonwealth jurisdictions - is the idea that somehow central government has both the responsibility, and the tools, to get local government to do exactly what it requires. In New Zealand, local government watchers are scratching their heads over what are local public services, and what does least cost to households and business actually mean? A number are concerned this could become a feast for public lawyers with the risk unclear legislation could encourage resort to judicial review.
Is this really what we want? And do we understand how to make local government properly accountable?
Why don't we try the alternative of accepting that communities differ, preferences differ and people should be allowed to express those. It does mean a bit more care, and it does mean moving from rule-bound consultation (in New Zealand, applying a High Court decision based on how an airport authority should deal with a major airline - not really the same as a council working with its citizens). Instead, shouldn't we mandate a process which requires councils to work with their communities as they develop the initiatives they want to put in place, and find user-friendly ways of helping people understand what they're proposing to do, what it will cost, and how it should be paid for. Think, for example, of participatory budgeting, or community governance as it is starting to develop in a number of different jurisdictions. And let individual councils decide what is best practice for their own communities, and face the electoral consequences if they get it wrong.
One possible positive in the latest round of New Zealand reform proposals is the suggestion that the very detailed compliance requirements surrounding compulsory 10-year plus financial and activity planning should be relaxed somewhat. These provisions were put in place by a previous government which thought that really detailed information compliant with international financial reporting standards was the way to go.
Few were surprised when actual practice suggested compliance was crowding out the strategic leadership role of local government, and most ratepayers could hardly understand the accountability documents themselves.
What's really going on? Are we witnessing some kind of deep concern in higher tiers of government over promoting (allowing?) local democracy - letting people take decisions about what should happen in their own place?
Some of the commentariat seem a bit under-whelmed by NZ Prime Minister John Key’s commitment to 10 specific goals as part of his Better Public Services strategy. New Zealand Politics Daily observed “the five year timeframe for achievement means that current Ministers and departmental CEOs are likely to have moved on before any day of reckoning”, suggesting that this was more political window-dressing than a real shift in policy direction.
But let's have a closer look. It's quite possible the Prime Minister means exactly what he said - and if he does, we may be facing one of the most significant shifts in New Zealand's public sector in decades.
First, he is putting Ministers right up front. In a speech to the Auckland Chamber of Commerce announcing the new initiative, he stated:
“I have appointed Ministers to lead each of these 10 results, along with a public service chief executive who is accountable for demonstrating real progress against his or her result.
“Responsible Ministers are expecting to sign off the initial plans to deliver against these results by the end of this month.”
Next, this is not just something out of the political spin room. Behind the Prime Minister's announcement sits the report of the Better Public Services Advisory Board. This was delivered last November but released only on 15 March, suggesting some long hard ministerial consideration before making the public commitment to pick up on what the board recommended.
The failure to link Ministers fully into responsibility and accountability for major policy has been one of the weaknesses of the New Zealand public management system since the late 1990s, when both Treasury and the Office of the Auditor-General tried to get Ministers to accept responsibility for the outcome statements in the government's estimates of expenditure, and failed.
At the moment, it looks as though the Prime Minister is recognising that unless Ministers are actually on the line, he’s not going to get the changes he wants.
And this is more than just targets to look back on in five years time. Both the BPS and the Prime Minister's speech emphasised regular reporting against targets so that progress towards achieving them can be measured.
And there's more still; the whole emphasis is on reshaping the public sector to get away from the present silos in order to build 'whole of sector' teams to deal with a number of the ‘wicked’ issues which have frustrated successive governments. We are looking at a major shift in the way government operates, at the role of Ministers, and how the public service works with the communities it serves.
We may also be looking at a possible policy conflict. The BPS report itself stresses the importance of working with community, and refers specifically to working with community groups. It does not draw on the extensive international work, especially in the UK, on the role of local government as a crucial intermediary in the effective delivery of social services (whether or not local government itself has any formal responsibility). However there is an encouraging reference to local governance boards, often chaired by the Mayor, as an important component of a current multi-departmental initiative in changing the way social services are delivered in small communities. This suggests the BPS Advisory Board has at least some awareness of the importance of the 'soft infrastructure' local government uniquely provides in being able to join up the dots within its communities.
This may be at odds with the Minister of Local Government who wants to constrain local government to its core activities, and does not believe that councils have a role to play in helping improve performance in areas such as educational underachievement or child abuse – though it does look as though his focus is more one that local government should not be a lead player, rather than a dismissal of its very real potential to act as a bridge between central agencies and communities.
It will be fascinating to see how the Minister of Local Government's views play out, and whether they can encompass the potentially dramatic policy shift signalled by the Prime Minister's speech and the report of the Better Public Services Advisory Board. Will he see this as representing the real new direction for the role of local government in New Zealand?
Much of our recent work has had quite a strong focus on community engagement - how do local authorities work with their communities and what should they be seeking to achieve? It's clear there's a great deal of activity, with many councils seeing community engagement as an important part of the way they work, but equally still casting around for what community engagement actually means, and what practices will best achieve the outcomes they want.
There is also a huge range of different approaches on offer, and a real growth industry in workshops on how to do community engagement. What we get from feedback is that there is much less certainty about just where all that is going, and how community engagement translates from a great deal of effort by councils and their staff into real and enduring outcomes in terms of the practice of council/community relationships.
We've been thinking about why this might be the case and have a couple of thoughts we want to put out for debate. First and foremost it seems to us that the focus in the developing practice of community engagement has been very much on how councils build their capability in managing individual issues where there is going to be a community interest in what the council does. The result it seems to us is an imbalance: councils, especially their specialist staff working in community engagement, are developing some very real capability. The question to ask is whether this has been balanced by an increased capability both amongst elected members, and more importantly perhaps within their communities.
We want to suggest that the next step in developing the practice of community engagement is to shift from a focus on capability within the council to capability within the council's communities. In a sense, councils should see themselves as building social capital within their communities.
Doing this almost certainly requires a significant shift in how councils think about community engagement. It's a shift from a capability to handle matters issue by issue, to building a resource base across the community. It's almost certainly more than just a matter of how councils engage: building capability in the community amounts to building some form of institutional capacity whether formal or informal. It's likely to be moved from engagement per se to community governance, enabling a network of institutional capability within the community capable of sharing with the council in determining what outcomes should be, both issue by issue and more generally.
It's a long way from the origins of interest in community engagement, but it's hard to see how the practice of community engagement can move on from its present emphasis on building council capability to building community capability as well, without crossing the boundary into community governance.
It's a question which is coming more and more to the fore as metropolitan governance comes over the horizon, with its emphasis on the balance between regionwide and district level decision-making.
There are a couple of things which we "know" about metropolitan regions. First, getting their governance and performance "right" is going to be crucial for the economic and social well-being not just of the regions themselves but of entire national economies. Next, this means being able to make and implement decisions on major regionwide initiatives (Infrastructure, land-use planning etc) which will impact differentially. Some parts of the region will welcome these decisions and others will be opposed because of what they see as the impact on their local communities.
This brings into focus the role of the local councillor elected to advance the interests of his or her community which may often be seen as being in conflict with the regional interest. This was the theme of a number of submitters to the Royal Commission on the Governance of Auckland the report of which records “territorial authorities were also criticised by a number of submitters for parochialism and inability to work together in the interests of the region.”
The Commission itself, in considering possible governance structures, commented “Fresh blood and fresh ideas will be required to move on from the region’s history of parochialism." and went on to recommend a governance structure which completely removed the territorial level of local government within the Auckland region.
It is an issue which is going to come up every time governance arrangements in metropolitan regions come under scrutiny. It's very easy to take the default position that local councillors are indeed parochial in the sense of being narrow-minded, self-interested and unable to recognise the wider regional interest. It's also usually wrong, and completely misses the point of why people put themselves forward for local government. Normally it's because they are passionate about their area and they want to put something back into it including protecting what they most value about it.
Surely this is exactly what we want from people in local government - a passionate commitment to doing the best they can for the people and the area which they represent?
So let's describe this in a way which recognises what is actually going on; I prefer the term "local patriotism". And this is not just about the niceties of language, or being kind to local councillors. It's very much about asking the right question when it comes to designing governance at a regional level.
If you think what you're dealing with is parochialism and narrow mindedness, then your policy solutions lie in greater regulation, restriction, and possibly restructuring to remove structures you see as parochial. The results, if you rely on regulation and restriction, are likely to include significantly greater transaction costs and more drawnout decision-making. If you choose restructuring instead then you face a different issue; the risk of simply replicating in the new structure the problems you thought you were removing by abolishing the old. Toronto and Ottawa provide examples of what can happen when a number of councils are amalgamated into a metropolitan level council. Both have had real problems of dysfunctionality as the ward-based structures put in place simply replicated around a larger council table the parochial battles which had previously been fought out between different councils (It remains to be seen whether the same problem will also plague the new Auckland Council which is also ward-based).
And which ever route you go, you also risk undermining local energy, local commitment and local democracy by abolishing the structures through which those had been expressed.
Treat the issue as one of "local patriotism", and the challenge becomes how to preserve the best of local patriotism, including local energy and commitment, while still enabling necessary decisions to be taken at a regional level. The solution lies in the design of structures, making sure that local issues continue to be handled locally, whilst insulating regionwide decision-making against the risk of local interests prevailing. That it can be done is evidenced by the obvious success of the restructuring of Metropolitan London.
Understanding that you are dealing with "local patriotism" and not parochialism is going to be crucial in getting the right structures in place within our burgeoning metropolitan centres.
"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean - neither more nor less."
In the past few weeks I've been working on how community governance is evolving in Australia, listening to officials in England discuss the challenges of devolution under the Localism Bill and reflecting on the progress of the Auckland (super city) Council one year after its establishment.
Humpty Dumpty would be in his element. In each of those three very different situations the major focus is on "improving accountability and transparency" - but what actually do we mean?
Auckland underwent a massive restructuring including placing much of service delivery in seven council controlled organisations. The objective naturally was to improve accountability. Officials in England are concerned about how to maintain accountability in a decentralised environment. Changes in community governance in Australia are all about making councils more accountable to their communities.
Let's think about accountability for a moment without thinking about specific context. Webster’s unabridged dictionary defines it as "The state of being accountable; liability to be called on to render an account; the obligation to bear the consequences for failure to perform as expected; accountableness".
Here we have two separate components: liability to render an account; and bearing the consequences of a failure to perform.
What a general definition cannot do is tell us accountability to whom for what, and this is where the challenge really starts in looking at accountability in local government.
In England, interest in accountability in the context of devolution is how to ensure local government remains accountable to Ministers and Parliament for the expenditure of public money, when the power to spend that money is devolved. Think of the dilemma. If it's direct accountability in the sense of reporting to Ministers that you have done what they required, you may have accountability but you won't have devolution. If it's reporting to Ministers that expenditure followed due process, and for purposes generally consistent with the policy devolved to local government, you may have devolution but you won't have what Ministers may mean by accountability – which is that “we want to hold you to account for doing what we want you to do despite devolution”.
In Australia, the emergence of community governance is about individual communities being able to influence decisions which have an impact on them. It's a new way of thinking about the relationship between communities and local government. What it is actually saying is that conventional accountability is inadequate; it's not an effective way to give individual communities a sense that their specific concerns have been properly taken into account through a process they regard as legitimate. This requires much more than council-wide strategic and operational plans, and reports against those plans. These are both too general, and lack the second element of accountability: bearing the consequences of failure to perform. We've long known that the local government electoral process is simply not designed to provide feedback on the multitude of individual decisions councils take during their electoral term on behalf of the different communities for which they are responsible.
We also know from New Zealand experience that typically local government reports prepared in accordance with generally accepted accounting principles seldom convey the kind of information people genuinely want to know about council plans and council performance. It may satisfy prudential requirements, but it doesn't get the gist of the outcomes councils deliver.
In Auckland the use of council controlled organisations looks like a good compromise for ensuring a measure of democratic influence whilst placing activities which have a number of commercial characteristics in an appropriate structure (typically a company). Certainly the degree of disclosure, and the requirement to prepare amongst other things local engagement plans, goes further than would be required of the same activity in a council business unit. Again, however, there are questions about the second leg of accountability: bearing the consequences for failure to perform.
Auckland's many communities will be most interested not in the overall performance of (say) Auckland Transport (which is responsible among other things for local and regional roads and public transport), but in how it performs in their own neighbourhoods - perhaps for example in dealing with a traffic calming measure. There is no real leverage apart from political pressure on elected politicians to deal with decisions which the community does not like or where the process was not seen as legitimate.
Consequences, if they result, really come through decisions about appointing or dismissing directors - in other words meta-level consequences. Can this really be an effective mechanism for dealing with hundreds of individual decisions affecting different communities across a population of 1.4 million?
These are three very different examples of practices which are talked about using the common term "accountability". Is it time we started to recognise that, with local government, we actually want multiple accountabilities, to quite different interests, rather than confusing ourselves by speaking as though accountability was a single process?
A lot of MDL's recent work has been looking at community governance and asking the question "who governs?".
There's some fascinating stuff coming out of it. Most councils are now at some stage on the journey of developing their community engagement practices. Virtually all have moved beyond the conventional consultation process (although this is still used especially when legislation requires) to various forms of participatory governance, especially when the issue involved affects only a small part of the community.
It's time consuming and resource intensive but seen as something which councils need to do. But it raises a really intriguing question: on the council side, who is really discharging the governance role?
It's tough enough in New Zealand for councillors to keep on top of everything their councils are involved with even though very often the New Zealand Councillor is full-time. It's much harder in Australia where generally council remuneration is not an income, and councillors need to work for a living as well.
Are we witnessing a gradual shift from elected members, to council management of the task of governing? If councillors are not personally involved in deliberations with communities, and this increasingly handled by council staff, who makes the decision? Even if the decision is formally taken by elected members, it is probably based on a report by a council officer or officers, which is no substitute for having had the face-to-face engagement on which the report was based.
What's the problem here? Maybe we simply haven't caught up with the changing nature of local government, and the need for much more intensive investment in representation. One councillor may easily be able to represent 10,000, 15,000 or 20,000 people if representation role is the conventional one of sitting around the council table, and taking decisions based on the reports which sit before you.
If council decision-making is increasingly based on community engagement processes, which mean that the decision-makers need to be in the room with the community in order to be adequately informed, then maybe we need to change. Perhaps the price of the kind of local democracy we now want is increased representation so that the formal decision-makers and the real decision-makers are one and the same.
New Zealand's next general election is less than nine months away. It's not quite yet the silly season, but very obviously politicians are already working through what options might tempt the electorate.
It's a tough year to be doing it. Even before the Christchurch earthquake there was almost a consensus that the New Zealand tradition of rolling out the goodies had to be put to one side. With the added burden of earthquake recovery, the challenge is now hugely how we do more with less, and how we reduce the cost of the state, both centrally and locally.
And we need to look for an imaginative solutions, rather than more in the way of knee-jerk reactions about profligate local government, inefficient public servants, or overregulation. Too much of our recent experience, especially in local government, illustrates the law of unintended consequences - instead of getting better community engagement, more accountability and lower costs, most government interventions over the past 10 years have produced exactly the opposite outcomes.
Could this be local government's opportunity? On the track record perhaps not. The 1999-2008 Labour led government spoke the language of community engagement and community outcomes but was responsible for the largest quantum leap in compliance burdens on local government in New Zealand's history. Ironically this was done in the name of greater community engagement and accountability but led to increased frustration for ratepayers and residents who really wanted to understand what their councils were doing.
The National led government in office since 2008 has tinkered at the margins of the compliance burden but left it largely unchanged. Instead its focus has been on "efficiency" most notably through a major restructuring of the Auckland metropolitan region.
On their track record, both major parties clearly believe that, in local government, big is better. Auckland provides the ultimate illustration with a council of 20 elected councillors and a Mayor serving a population of approximate the 1.4 million - a representation ratio (councillors to residents) of 70,000:1 in a world in which many jurisdictions start worrying if the ratio exceeds 1000:1. Even Auckland's local boards, intended to be the flagships of local democracy, have a representation ratio of 10,000:1.
Perhaps its time for New Zealand's politicians to have a hard look at what is happening internationally and why. First they would find that representation is generally regarded not as a cost to be minimised, but as an essential element in the key role of local government, the delivery of local democracy. Next, they would find increasing doubts about the effectiveness of the standard model of expert bureaucrats, remote from the communities their government's policies are intended to serve, designing, targeting and delivering social services to improve community outcomes.
The current changes in England are a good example. The coalition government's big society programme
might look like an ideologically driven cost-cutting strategy as many of its opponents claim. At its heart, though, is a research-informed belief in the need to rebalance the relationship between government, local government and community. It's an acceptance that the best decisions are taken closest to the people directly affected, and ideally with them involved in taking those decisions. Among other things, it's prompting some really interesting experiments with employee and/or community owned mutuals as more effective means of enabling service delivery. For a recent example from the English Government's Pathfinder initiatives.
Despite the fact that New Zealand takes a different approach to the delivery of social services (much more through central government than in England, much less through local government) the two countries face similar problems of fiscal constraints, and the need to get better outcomes from services which too often are too remote, or insufficiently connected with the communities they serve.
Is it time for New Zealand to re-engage, and learn from the experience of other jurisdictions?
Shared services in local government have always looked like the idea which never quite made it. There have always been good arguments for doing it, but largely not good enough to overcome resistance, apathy, inertia and the sheer difficulty of shifting from well trodden ways of doing what we have always done.
In 2010, Deloitte
was lamenting that "despite a history of tactical collaboration, shared services have really succeeded at scale". Similar comments are common throughout the research literature on local government.
Most notably, higher tiers of government, in search of the holy Grail of improved local government performance, normally reject arguments for doing so through shared services in favour of amalgamation. That's got the political attraction of looking like firm and positive action, and electoral cycles mean the fallout usually affects a different government. But it also reflects real resistance within local government. Queensland's Local Government Reform Commission was put in place to restructure local government because the state government lost patience with attempts to improve performance through a shared services strategy. One reason the Royal Commission on Auckland Governance decided not to put in place a second tier of substantial councils below a regionwide council was it believed such a tier would not be capable of agreeing on the measures needed to improve performance through a shared services approach.
But it's amazing what a bit of fiscal pressure can do. Most local governments are now facing as tough a financial outlook as ever they have seen. The New Local Government Network's just released publication Shared Necessities: The Next Generation of Shared Services
makes a compelling argument that simply sharing back-office services, even if every council across the country does that to an optimal level, will come nowhere near coping with reduced revenue. The only option is to move to comprehensive shared services across the full range of what councils actually deliver.
Interest is increasing elsewhere. In New Zealand one group of councils has taken an innovative approach to how they think about shared services - for them it is very much a matter of access to and management of information, rather than the former approach of physically shifting things around, outsourcing etc. Key to this is a high-speed fibre optic cable linking all the councils together. This will enable the development of a 'centres of excellence’ approach with each council developing a different specialty, so that there is room for the large and small. Contrary to the usual fears about shared services, this approach should underpin local democracy and the continued relevance of the smaller councils.
Peter McKinlay will be presenting the findings from a case study on this initiative at the forthcoming colloquium of the Research Advisory Group of the Commonwealth Local Government Forum to be held in Cardiff 12-14 March 2011. His paper will shortly be available in the resources section of our website.