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Local government reform - is government intervention inevitable?

Written by Peter McKinlay on February 27th, 2013.      0 comments

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?



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