Revitalising Local Government: Panel recommends new regional structures (part 3: comments and conclusions)

This is the third in a series of posts about the recently-released NSW Independent Local Government Review Panel’s final report Revitalising Local Government.

In my first post I provided a brief overview of section 11 of the report which deals with the Panel’s recommendations for the creation of new Joint Organisations (JOs). In the second I outlined the Panel’s recommendations regarding the role of JOs in State-local cooperation and their formation in the metropolitan region. This post considers some of the broader implications of these recommendations.

As I noted in the previous posts I was commissioned by the Panel to prepare a paper on options to enhance regional collaboration amongst councils and in particular the role of Regional Organisations of Councils (ROCs – see Volume 2 of the report’s supporting documents). I should also state particularly in relation to this post that I was the CEO of a metropolitan ROC for 12 years.

Now to consider the Panel’s regional Joint Organisation proposals. As I noted in the earlier posts, the Panel’s proposals for “new look” county councils as a basis for regional collaboration received strong criticism. In light of these responses the Panel decided to start again with a “substantially modified set of proposals” based on a new more flexible model with a new and possibly less value-laden name – “Joint Organisation” (JO).

However the Panel has not retreated from its view that strong regional structures are vital, not only in the delivery of council services but more critically in playing a central role in representing and supporting local government in regional strategic planning, project coordination and governance. In doing so it has again rejected suggestions that existing ROCs are an appropriate vehicle due to their “embedded culture” of volunteerism which the Panel believes undermines their capacity to act effectively and consistently.

I have struggled with this issue but I think the Panel has made the right call – which is a difficult position for me to take, given my history of involvement in ROCs. Some ROCs are very effective, but others are less so. As the Panel notes in quoting the results of my research, this reflects the disparities in the size, number and wealth of member councils, as well as “variations in the level of commitment and institutional leadership”.

Many ROCs also have to negotiate a wide range of attitudes including (at times) hostility from other levels of government as well as parochialism, indifference or neglect from their own members. As a result they can be pushed into marginal roles, undertaking “safe” projects rather than the important ones, or bypassed entirely.

Hence the Panel’s proposal for completely new regional structures with mandatory membership, compulsory mayoral involvement and a defined set of core functions. There is likely to be criticism that this will remove the sense of council ownership of the new regional structures and reduce their independence, but I don’t think that will occur if these bodies have a stronger and more strategic role and if there is a well-designed process to engage councils in creating them. The Panel’s framework for establishing the JOs (p.82) is a great start, but more thought does need to be given to transitional arrangements from current ROCs (as well as from County Councils) to the new bodies.

The Panel has also recognised that cultural change will need to occur within councils as part of this process. In a step beyond its previous proposals it now seeks to “embed” JO participation in both State and local government planning, for example giving JOs a primary role in selecting local government representatives to participate in state planning processes and requiring councils to prepare information on regional strategies in conjunction with the relevant JO for inclusion in their own strategic planning and delivery processes.

This reflects the Panel’s position in relation to a much wider discussion implicit in the reform debate– what is the purpose of local government? Should the reform process concentrate on improving efficiency and performance of councils in delivering traditional council services, or should it seek to expand local government engagement into a much broader role in strategic planning and metropolitan and regional governance?

There is not enough space to go into these issues here, but the Panel has emphatically decided that the reform process should try to achieve both outcomes – a position which I support. The Panel has decided that the new JOs should be also instrumental in both roles, but particularly the latter. This reflects the number of strategic issues that are best managed at a regional rather than a local or statewide level as well as a recognition that many councils are inherently disadvantaged when they try to negotiate individually with the state government.

The Panel’s recommendations on JOs alone would lead to a major shakeup of the local government sector, but these is also question of the relationship between these proposals and the Panel’s other recommendations, especially those regarding council mergers. Again there is insufficient space to discuss this here, but it is fair to say that while the Panel is still arguing that amalgamations are necessary, it is now offering a more nuanced approach as to how and where these should occur.

For example it has decided to treat rural and urban areas quite differently. For every council outside the Sydney, Hunter, Central Coast and Illawarra regions the Panel has developed a range of options, including for many an apparent choice between JO membership or merger. However it is clear the Panel sees benefits in establishing a JO framework even if all the proposed mergers were implemented. In other words participation in JOs would be both a minimum and mandatory requirement for all rural councils, regardless of size.

In urban areas and especially in the Sydney metro region the approach is different. In Sydney for example the Panel really is proposing “either/or” choices. One option is to largely retain the current number of councils and rely on sub-regional JOs (see map in part 2) to engage in metropolitan governance and strategic planning processes as well as to deliver shared services.

However the Panel wants this option deferred pending consideration of its preferred proposal, which is to substantially reduce the number of councils through amalgamation so that “each has the resources and credibility to be a player in metropolitan affairs in its own right” (p.98). Under this scenario, councils would come together as a strong metropolitan-wide Council of Mayors (COM) instead of forming JOs.

The main difficulty with this approach is the potential for the consideration of mergers to drag on and for the outcome to fall between two stools, with an intermediate and inconsistent set of amalgamations making the creation of JOs difficult but also resulting in too many councils to create an effective Council of Mayors. It may be necessary to develop intermediate scenarios in which some amalgamations occur while groups of smaller un-amalgamated councils are required to form JOs. A combination of the chairs of these JOs and the mayors of larger councils could then form a COM.

Conclusion

In framing its recommendations the Panel appears to have tried to push the envelope as far as it could on mergers while respecting the government’s commitment that there would be no forced amalgamations. In this regard the JOs could be regarded either as a stepping-stone to council mergers, or as an alternative to them – and quite possibly, both.

The JO approach presents both the state government and councils with a set of interesting and potentially converging choices. For the state government, the JO model could provide an attractive example of its commitment to substantial council reform and an opportunity to recast its often-troubled relationship with local government as a partnership – especially if it is unable or unwilling to implement immediately some of the other options, such as amalgamations.

Meanwhile councils could also be drawn to the JO model as a way to develop a more meaningful relationship with state government, though some may also see JOs as a way of staving off amalgamations, especially in urban areas (this may be one of the reasons the Panel was much more explicit in preferring mergers rather than the formation of JOs for the metropolitan area).

Using the JO model to stave off amalgamations or other reforms may be short sighted but the converse could be be even worse. The state government could reject JOs as being an inadequate alternative to council mergers. Alternatively the local government sector could also oppose the model as being a “back-door” approach to achieving the same outcome, while destroying their current regional structures.

Such a negative response would be unfortunate, as the Panel puts a strong case for the instrumental importance of a greatly enhanced role for local councils in regional and metropolitan governance, alongside and complementary to its other recommendations. As I stated at the end of my last post, the joint organisation model and the associated recommendations would move regional collaborative arrangements between councils from their current relatively peripheral status to centre stage in the reform process, providing a critical interface between State and local government in statewide strategic planning, metropolitan governance and service delivery.

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