Smash’n’run or reform with care: local government in NSW

The former O’Farrell spokesperson on the environment, Catherine Cusack MLC, recently wrote that: “It took the spacecraft Galileo six years to travel four billion kilometres. The journey to local government reform (in NSW) is set to take four times longer than a trip to Jupiter via Mars”. The former Victorian premier, Jeff Kennett, used a bedroom metaphor to describe the joy that NSW citizens would experience if Premier Barry O’Farrell got serious about local government reform.

Electricity, river cleansing, waste collection, food safety and air quality reforms, many railway stations, the great reform package of the Sydney Harbour Bridge, the underground metro rail and suburban electrification, were initiated within local government. However, the balkanisation of 40 to 60 local government areas (LGAs) in Sydney versus one big one and a few small ones in Brisbane rankled.

Premier Neville Wran famously said that the City Council had “no more power than a crippled preying mantis”.  Private sector advocates have called for widespread amalgamations for many decades, focusing on the simplest measure, the number of bodies rather than the quality of performance while local governments have resisted reform even from within its own ranks, most especially the Cumberland County Council, Sydney’s “great experiment” (Denis Winston).  Amalgamations happened elsewhere but the reformers including Bill McKell, Pat Hills, and the greatest of all John Daniel Fitzgerald made no real progress post 1902.

After 20 years, the O’Farrell Government has a series of inquiries underway, looking at alternative models and rescue mechanisms for failing municipalities and shires. It has defeated the business community’s call for wholesale amalgamations but the planning reforms are taking many “planning” responsibilities off local governments. As submissions to the exposure packages closed last Friday, which are the most appropriate directions for reform – all things considered - John Mant pondered whether the approach would produce “fiddling at the margin of change”.

The question is, will the review of NSW local government – a full third of the public sector – make things better or worse for coming generations, which are already faced with a declining tax base and savage infrastructure backlogs? 

There have been crises in various aspects including aspirational or Taj Mahal distortions, sackings of whistle-blower executive officers, intra-council conflicts, gross corruption, unresolved Code of Conduct conflicts (ironic), waste, imminent insolvency, desperate bids for rate increases and special levies, and so on. The Sydney Business Chamber and Committee for Sydney among others want to go to ten councils, the former Lord Mayor of Parramatta to six, and northern NSW councils called for a cut in the number of Sydney councils. The range of responsibilities, workloads and statutory interventions is ridiculous and way beyond the original concept of aldermen.

An international review found that Australia’s geopolitical fragmentation is in line with Switzerland’s, Germany’s and the United State’s and just above half of France’s. The same study found there are competitive advantages in having a range or choice, while “New regionalism focuses on the emergence of metropolitan governance as a result of negotiation processes between a variety of policy-relevant actors, rather than through hierarchy or competition”.

Most importantly, the most eminent NSW academics found that recent analyses focussed on:

…an accounting definition of long-run sustainability to the exclusion of all other perspectives, including notions of community sustainability and the intrinsic worth of local choice, local democracy and local representation. This…is unfortunate in at least two respects. In the first instance, it serves to diminish other crucial features of local government that cannot accurately be measured in monetary terms but nonetheless remain critical for the sound functioning of local councils. Secondly, it ignores important elements of the contemporary international debate on the role of local government as best exemplified in the landmark Lyons Inquiry into Local Government (2007) in the United Kingdom entitled Place-Shaping: A Shared Ambition for the Future of Local Government. Indeed, the main thrust of the Lyons Inquiry runs in diametric opposition to the conclusions of recent Australian public inquiries precisely because it contends that effective local government extends far beyond the accounting dimensions of local council operations.

The issue of culture and functioning becomes more important than numbers. The dominant philosophy behind NSW planning reform in the last decade or so was to cut NIMBYism out of planning and development assessments while the communities affected by imposed change became highly politicised. Submissions such as the Urban Taskforce's have praised localism but then suggested state intervention at regional and local levels. Such interventions had been removed under U.K. localism where there had been a sustained failure of central planning as in Sydney.  Planning performance can be improved without intervention or onerous restructuring processes – through sensible rearrangements and culture improvements.

To quote Kubler again:

…a single model of governance can not be advocated, as the probability of area-wide governance capacity to come about is determined by the dynamics of place, i.e. by the locally specific combination and combinability between actor behaviour, incentive structures and political leadership at the metropolitan level.

The failures of the long-standing top-down planning system are seen in the “spatial blindness” that has damaged the prospects of Western Sydney as well as in the varying demographic projections and State interventions in site and area planning. Councils have Local Environment Plans (LEPs) which date back to the early 1990s and have been modified 70 and more times and even then, the NSW Department of Planning (DOP) has missed errors in streetscape and site elements. The recent rail and transport visioning documents cannot guide regional and local planning in the bulk of Sydney’s Western economy because they were largely ignored. The planning challenge there – including balancing population and employment growth, reducing car dependency and achieving prosperity - is so serious that the Macquarie Street approach cannot provide a sound basis for intergenerational improvement, not without a local bottom-up and solidly based holistic planning and funding cycle.

Almost all of the alternative models at the moment go no further than forced amalgamations but there are two involving “planning” as well as “governance”. There are some “regressive” themes.

Widely rumoured is the wider introduction of popularly elected mayors and restoration of their pre-1993 executive responsibilities (breaking the fundamental concept of separation of function).  The Allan idea of removal of infrastructural functions (below) would reduce the significance of this.  However, the inability to remove incompetent popularly elected mayors and the lack of scrutiny committees as in the U.K. are impediments. There is a documented tendency to nepotism, corruption, conflict and inefficiency, and a lack of well-established benefits (the conclusion of the only local academic study Inam aware of as discussed in the Australian Journal of Political Science in 2011).

Professor Percy Allan and the Urban Taskforce have taken up the former’s Secession – A manifesto for an independent Balmain local council (2001) arguing for groups of say ten councils to have a shared services centre, removing about 90 per cent of their staffing. Planning reforms would be through the existing mechanisms such as expert panels. Councils would negotiate service agreements in line with budget contributions.

The benefits have been assessed by various parties and “we are obliged to draw the modest conclusion that while the thoughtful selection and application of shared service arrangements would almost certainly induce cost savings, it could not by itself solve the acute problems of financial sustainability confronting a majority of Australian local councils” (Journal of Public Administration 2009).

I have authored “Creative Re-construction of NSW Local Governance”. It takes a holistic approach to the structure and culture of local and regional planning and finances and goes further than any other proposal while staying within Australia’s culture and traditions. The current local government review processes have not posted this on their websites although the planning review did.

In short, the Joint Regional Planning Panels would be removed, Regional Planning Boards would be obviated, and the Urban Taskforce’s suggested Shared Service Centres would parallel the Regional Planning Councils (RPC’s) in respect of commercial service delivery but not community governance. Appeals on rezoning, development applications or whatever would be on matters of law, not merit. Justice would be direct and immediate on disputes within councils. The RPCs would relieve local government of much of the complexity and duress of direct service delivery but give control over negotiated service standards and adherence. The planning professionals would be corporatised, remunerated and trained appropriately, relieved of interference and micro-management, and sent back into communities and LGAs in far more effective ways. Democracy would be reinforced through the alignment of consultation zones (precincts) with electoral boundaries (wards). A superior voting system is available from Australian and U.K. practice.

Most importantly, democratic processes would be linked with “willingness to pay”, heading towards a sustainable infrastructure funding cycle.