Governance as Leadership in Local Government

What is happening ‘elsewhere’

Brian BellGeneral Manager

Lake Macquarie City Council, NSW10 November 2015

NSW Circumstances

• ILGR Panel set up by State Government (2012)• Panel makes 65 recommendations for

reform(2014)• Large majority of recommendations strongly

supported by NSW Councils• However, the options relating to structural

reform via amalgamations consumed the debate and drowned out the rest of the recommendations

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Fit for the Future?

• Gov’t starts ‘Fit for the Future’ Program• 144 (of 152) councils required to show how

they can be Fit for the Future• 136 of the councils submit their proposals

saying they want to stand alone• Gov’t gives assessment job to IPART

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IPART Report Startles!State Government strikes! Councils not happy!

• IPART report with ‘Fit for the Future’ submitted to Gov’t on 16 October. Report released 4 days after state gov’t receives it

• Hardly anything different in it from ILGR Panel final report recommendations/options in relation to amalgamations

• Premier comes out strong … with lots of populist but ‘challengeable’ statements

• ‘Last Chance’ for recalcitrant councils – 28 days to see the error of their ways before Government strikes! Councils not happy!

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What we think might happen

• Forced amalgamations across NSW. Government announcement sometime after 18 November this year

• ‘Transition Committees’ in place until September 2016 local government elections

• Newly amalgamated councils in operation following September 2016 local government elections

• Regional Joint Organisations (JOs) for some of the non-metropolitan councils in NSW

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Regional Joint Organisations

• 5 ‘pilot’ JOs currently being trialled across the state. (Hunter, Central NSW, Illawarra, Namoi, and Riverina regions).

• Pilot JOs are testing the opportunities for regional groupings of councils to strengthen their regions and more effectively partner with the state government as a region.

• Core functions of the JOs are being identified as regional strategic planning and priority setting; intergovernmental collaboration; and regional leadership and advocacy.

• Will not be prevented from undertaking larger regional projects to realise their core functions. Will also be able to define their own particular ‘regionally defined’ functions.

• Will have appropriate legislative backing.

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Issues we all get lost on

• Why is amalgamation always the preferred ‘solution’ of state governments?

• The real evidence for ‘Bigger is better’ local governments is often missing in action! The performance numbers tell a different story

• A study of 24 regional cities in NSW tells a story …….

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25k 39k 7k 40k 58k 49k 23k 37k 33k 23k 40k 21k 46k 44k 61k 25k 28k 40k 23k 41k 31k 51k 29k 19k

-70.0%

-60.0%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%6.0% 5.5% 4.5%

1.4% 1.2%-1.0% -1.3%

-3.2%-3.4% -3.4% -4.0% -5.4% -5.9% -6.8% -7.0% -7.0% -7.7%

-12.8%-12.9%-13.3%-13.4%

-23.1%

-37.4%

-61.2%

OPERATING PERFORMANCE RATIO

• Of 5 Councils meeting the OLG 3yr average criteria, 4 are not amalgamated, 1 is amalgamated.• Of the 10 best performing councils over the last 3yrs, 7 are not amalgamated and 3 are amalgamated.• Population size of the council has no correlation to performance – bigger is not better.• Amalgamated councils are not performing any better than non amalgamated councils.

Misses CriteriaMeets Criteria

Population 000’s

Amalgamated

Non Amalgamated

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25k 49k 41k 25k 33k 19k 40k 23k 21k 58k 46k 23k 7k 40k 44k 39k 40k 37k 23k 29k 61k 31k 51k 28k

1.44

1.13 1.06 1.05

1.01 1.00 0.95 0.93 0.92 0.91 0.90 0.89 0.87 0.84 0.82 0.81

0.73 0.72 0.71 0.70 0.67 0.66 0.65 0.65

• Benchmark >1

ASSET MAINTENANCE RATIO

• 6 Councils met the 3yr average benchmark. 2 were amalgamated and 4 were not amalgamated.• Of the Top 10 performing councils, 6 were amalgamated and 4 were non amalgamated.• Population size has no correlation with performance against this benchmark.

Population 000’s

Amalgamated

Non Amalgamated

Misses CriteriaMeets Criteria

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40k 19k 39k 41k 25k 40k 58k 44k 49k 25k 23k 46k 23k 31k 28k 37k 61k 33k 40k 21k 29k 51k 23k 7k

0.01 0.01 0.01 0.01 0.01 0.01 0.02

0.03 0.04

0.05 0.05 0.06 0.06 0.06

0.07 0.08 0.08

0.09 0.10

0.11

0.14

0.19 0.19

0.22

• Benchmark <2%

INFRASTRUCTURE BACKLOG RATIO

• For the year 2014, 7 councils met the OLG criteria. 5 are non amalgamated, 2 are amalgamated.

• Of the top 10 performing councils, 6 are non amalgamated and 4 are amalgamated.• Population size has no correlation with performance on this measure

Population 000’s

Amalgamated

Non Amalgamated

Misses CriteriaMeets Criteria

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A minimum rate cap???

• Setting a rate cap. CPI VS CPI?• If there is no escaping rate capping then it

should be a minimum rate increase set by the state, such that councils must raise their rates by (at least) that amount!! Goodness!!

• This would take away the political negatives for local councillors who may have some problems setting their rates at a level that will allow the council operational plans to be carried out.

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