Destination 2036 Discussion Paper - Division of Local Government

dlg.nsw.gov.au

Destination 2036 Discussion Paper - Division of Local Government

In 2011, we live in a society in which change is both constantand rapid. Our markets, transport and communicationssystems, governments and even our cultures have becomeincreasingly globalised. We have more information thanever before – and a much better understanding of theinterconnectedness of our people and environments. In thiscontext, leadership is more complex and more difficult thanever before. It is also more important.In August 2011, over 300 mayors,councillors, general managers and othersector leaders will come together to planthe future of local government in NSW.This is a truly unique event – nothinglike this workshop of civic leaders hasever been held here before. The eventwill be known as Destination 2036. Asthe Minister for Local Government saidin his address to the Shires Associationon 1 June 2011, “for some of us, 25 yearsmay be beyond our working lifetimes, sohere is an opportunity for us all as civicleaders to make a contribution and leavea beneficial legacy for future generations”.The Local Government and ShiresAssociations (LGSA) have also called for“a unifying narrative, which ensures thatcouncils move forward with purpose andcoherence” (2010: 5). Destination 2036 hasthe potential to deliver that narrative.Destination 2036 reflects the NSWGovernment’s commitment to workconstructively with local government. Toquote again from the Minister’s speech,“many of you have already indicated tome that reform is needed. My challengeto you is to work together as a sectorand articulate what reforms are neededand what we need to do to deliver them”.The LGSA has also recognised that“collectively the Associations and membercouncils can’t hope to wait out theincessant calls for change. We can’t lookthe other way and hope. We must worktogether to find formulae for mutuallyagreed reform” (2011: 4).The Division of Local Government(DLG), with the help of the LGSA, LocalGovernment Managers AustraliaNSW (LGMA) and Australian Centreof Excellence for Local Government(ACELG), has commenced Destination2036 to start the preparation of a longterm vision and short term action plan forlocal government. In effect, Destination2036 will begin the strategic plan anddelivery program for all local government,mirroring key elements of the integratedplanning and reporting frameworks whichindividual councils are implementing.This Discussion Paper has been preparedto start the conversation which will becontinued over the two days in Dubbo.It is a summary document which bringstogether the rich body of recent researchon local government in Australia, carriedout by a large number of organisationsand individuals. The Discussion Paper alsoposes a series of questions as a startingpoint for discussion before, during andafter the Destination 2036 Workshop.The Our Councils Yesterday section ofthis paper begins by looking at the waysin which local government in NSW haschanged over time.The Our Communities and Councils Todayand Tomorrow section then considersthe kinds of communities which localgovernment will be leading over thecoming years – and the challenges towhich councils will need to respond. Thesecommunities and councils can be definedin many different ways. The groupingsused in this paper do not exactly followeither the Australian Classification ofLocal Governments or the 11 categoriesused by the DLG in documents such asits annual publication of comparativeinformation. Instead, it uses a simpler andmore intuitive grouping of communitiesbased on the common challenges theyface over the next 25 years.The Our Future section of the DiscussionPaper looks initially at some ideas fromother Commonwealth countries. Theseideas are not all applicable to NSW, butare intended to help get us thinking andtalking about what may (and may not)constitute a preferred future for localgovernment in NSW. The paper concludesby offering some ideas about somepotential models for local govermentsin the future covering their governance,stucture, financing, function and capacity.These and other ideas will be debatedand discussed in Dubbo – and it is hopedthat these conversations will build newrelationships and a renewed sense of trustthat state and local government, along withour many other partners, can work togetherto provide the best possible leadership forour communities into the future.Destination 2036 Discussion Paper 3


Our Councils Yesterday≥ How have we changed in the past?Destination 2036 Discussion Paper 5


Since 1842, when NSW’sfirst council was created,local government hassuccessfully dealt withinnumerable changes.These include…Changes in structureIn 1858 there were only 10 localgovernments in NSW. In 1905 a compulsorysystem of local government was introducedand by 1910 there were 324 councilsin the state. By 1967, one hundred ofthese councils had ceased to exist. Theamalgamations of 1979-1980 meantthat by 1982 the number of councils hadreduced to 175 – and after a small numberof amalgamations in the 1990s and 2000s,largely in rural and regional areas, the totalnumber of councils now stands at 152.While the Local Government Act of 1919empowered the establishment of countycouncils, only 11 had been constituted by1944. However, by 1962 this had increasedto 56, with the majority undertakingelectricity supply functions. Today, only 14remain. Conversely, the role of RegionalOrganisations of Councils (ROCs) hasincreased. The first ROC was establishedin 1973 – and there are now 18 of them.Changes in financingThe traditional source of income forcouncils has been a levy on the value ofland – known as rates. Until 1978, rateswere based on unimproved capital value.In 1978 councils were given the choiceof using land value – and this method ofcalculating rates was made compulsoryfrom 1982. From 1858 until 1952, allcouncil rates were subject to maximumand minimum limits. A system of ratelimits, known as ‘rate pegging’, wasreintroduced in 1976 and restricted raterises for individual properties. In 2009,the process of special rate variations,which allow councils to seek rate risesabove the rate peg, was aligned withthe Integrated Planning and Reportingframework. Responsibility for settingthe rate peg and assessing special ratevariation applications was delegated tothe Independent Pricing and RegulatoryTribunal in 2010. Over the last decade,many councils have significantlydiversified their income base and are nowless reliant on rates as a source of income.More recently, financial difficulties forsome councils due to the Global FinancialCrisis has led to stronger regulation ofinvestment options.Changes in governanceIn the Municipalities Act of 1897, “everymale elector of any municipality” was ableto be elected an alderman – providingthey were not a judge, in the military,bankrupt or “of unsound mind”. The LocalGovernment Act of 1906 gave the occupiersof rateable property the right to vote. In1918 women became eligible to becomealdermen, although the first femalealderman was not elected until 1928 – andshe became and Australia’s first femalemayor in 1938. NSW got its first popularlyelected mayor in 1850, but this systemwas revoked shortly afterwards, onlyto be reinstated for the City of Sydneysome 100 years later. The ability to havepopularly elected mayors was extendedto Newcastle and Wollongong, and to anyother municipality on application, in 1956(Maiden 1966). In 2004 the first Aboriginalperson was elected a mayor. In 1987the State Electoral Commissioner wasmade responsible for conducting councilelections, but a more recent change in2011 has meant that councils now have theoption of conducting their own elections.6 Our Communities | Our Councils | Our Future


Changes and challenges for Inner and Middle Sydney CommunitiesLand use planningis becoming morecomplex and contestedRivers andwaterways havebeen quite polluted– but water qualityis improvingTraffic is congested –and appears to be gettingmore soResidents areoften highlyeducatedFor more information on the challengesfacing inner Sydney communities, see:≥≥DECCW (2010) Climate Impact Profile≥≥DOP (2008) New South Wales Stateand Regional Population Projections,2006‐2036≥≥DOP (2010) Sydney Towards 2036:Sydney Metropolitan Strategy≥≥Australian Government (2011a) NationalUrban Policy and (2011b) SustainablePopulation Strategy for AustraliaPopulations are growing,but quite slowly≥≥Drabsch (2011) Population, Housing andTransport Indicators for NSWInfrastructure isgetting very oldObvious locations forbig infill projects arelargely disappearingHousing is gettingmore and moredifficult to affordPopulation densitiesare higher and slowlyincreasing due to infillJobs are becoming lessblue collar and morewhite collar10 Our Communities | Our Councils | Our Future


Changes and challenges for Outer Sydney CouncilsWhat are these councilslike now?≥≥large populations, mostly above150,000 residents≥≥facing significant population growth innext 10-15 years≥≥large budgets, often over $100 millionper year≥≥generally rely on rates and annualcharges for about 50-60% of incomeWhat are people saying aboutthese council areas?“Ironically, larger councils generally chargehigher rates per capita than smallercouncils. Larger councils have often pursueda more ‘maximalist’ agenda than smallerones, which has occasioned higher taxes”(Allan et al 2006: 17).In major cities “fringe growth generallyoutstrips infill and increased density inestablished areas”(Australian Government 2011a: 20).“Sydney’s infrastructure needs (inparticular transport infrastructure toservice both commuters and freight) havenot kept pace with the rate of populationgrowth in the Sydney basin area orwith the needs and expectations of thecommunity or industry”(Association of Consulting EngineersAustralia 2009: 1).“Urban regions with poor job provision canbe deemed ‘at risk’ of social and economicimpoverishment should an economicshock cause downturn in generaleconomic conditions”(SGS 2007: 22).“Many of the issues facing residentsin Western Sydney are as a result of acontinuing lack of planning, infrastructureand overall vision”(WSROC 2011: 9).“While most growth area municipalitiesare focused on managing the impactsof significant population growth, thereis a need to be cognisant of workingcollaboratively at a regional level withneighbouring areas not experiencing thesame level of growth, but which share acommon range of infrastructure issues”(SGS 2007: 23).“A move to full-time paid mayors may beappropriate for large councils, particularlyin metropolitan areas, however wouldgenerally be inappropriate for smaller,rural/regional”(quoted in LGSA 2011: 14-15).What do you think thesecouncils will be like infour years’ time?What about in 10 and 20years’ time – and in 2036?Destination 2036 Discussion Paper 13


Changes and challenges for Inland Regional CentresGrowing, but moreslowly than coastalcommunitiesUsing some innovativeways to attract jobsand residentsSome increasingdiversity, but still takingin a smaller share ofimmigrantsFor more information on the challengesfacing regional centres, see:≥≥DOP (2008) New South Wales Stateand Regional Population Projections,2006‐2036≥≥DECCW (2010) Climate Impact ProfileMay beincreasinglyattractive for treechangersIncreasingly important asservice hubs for smallerneighbouring communities≥≥Australian Government (2011a) NationalUrban Policy Sustainable and (2011b)Population Strategy for Australia≥≥Drabsch (2011) Population, Housing andTransport Indicators for NSWSome new industries andbusinesses emergingHigh speed internetmay provide newopportunitiesClimate change likely toresult in hotter weather –with greater bushfire riskSome better health,education and other socialservices – but still a long wayto go to catch upCosts of living canbe lower14 Our Communities | Our Councils | Our Future


Changes and challenges for Inland Regional Centre CouncilsWhat are these councilslike now?≥≥many established early, with a few over150 years old≥≥populations generally between 25,000and 60,000≥≥generally over 300 staff≥≥generally rely on rates and annualcharges for about 40-50% of incomeWhat are people saying aboutthese council areas?“Our cities support and rely on ourregions. A positive future for ourcities is important for the future of ourregional areas”(Australian Government 2011a: 8).“Enhanced strategic capacity appearsto be essential to local government’s longterm success as a valued partner in thesystem of government”(Aulich et al 2011: 10).“All inland cities have seen populationgrowth over the past decade, althoughthis has been slower than in coastal cities”(Federal Government 2011: 20).“Many inland country councils and coastalfringe and regional councils do not presentlyhave the quality of infrastructure to dealwith a rapid influx of older residents”(Allan et al 2005: 82).“Some larger regional councils feltthat they were expected to take thelead and manage the [collaborative]arrangement…other larger regionalcouncils noted this issue but took theposition that they had a responsibility tosupport smaller neighbours and that itwas in their long‐term interest for a strongregional local government network”(DLG 2011a: 11).“Local job attraction schemes, regionaluniversities, small scale roads and majorinfrastructure are all expensive, but theydo not appear to materially accelerateslow‐growing regions”(Daley and Lancey 2011: 3).“Regional cities are central assets totheir regions. They give life to regions andpeople.... We should not only be proud ofour regional cities, we should understandtheir potential to drive the prosperity ofthe nation”The Hon Simon Crean MP, Minister forRegional Australia, Regional Developmentand Local Government, Speechgiven to the Committee for EconomicDevelopment, 18 February 2011.What do you think thesecouncils will be like infour years’ time?What about in 10 and 20years’ time – and in 2036?Destination 2036 Discussion Paper 15


Changes and challenges for Coastal CommunitiesFor more information on the challengesfacing coastal communities, see:Populations aregrowing, sometimesvery quicklyHousing can be gettingquite expensiveInfrastructure andservices not alwayskeeping up with growthSome families aremoving in for cheaperliving costsTourism is notalways leading tonew jobs≥≥Gurran et al (2005) Meeting theSea Change Challenge: Sea ChangeCommunities in Coastal Australia≥≥DOP (2008) New South Wales Stateand Regional Population Projections,2006‐2036≥≥DECCW (2010) Climate Impact Profile≥≥Australian Government (2011b)Sustainable Population Strategy forAustralia≥≥National Sea Change Taskforce (2011)NSW Coastal Policy Paper≥≥Drabsch (2011) Population, Housing andTransport Indicators for NSWIncreasingnumbers of olderresidentsThere continue tobe big fluctuationsin population fromsummer to winterEffects of climate changeare already being felt16 Our Communities | Our Councils | Our Future


Changes and challenges for Coastal CouncilsWhat are these councilslike now?≥≥a wide diversity of population sizes andgeographic areas≥≥significant, rapid and often sustainedpopulation growth≥≥a large range in budget sizes, fromless than $50 million to more than$150 million≥≥generally reliant on rates and annualcharges for 30-50% of income≥≥remainder of income from of a variedmix of user charges and fees, grantsand contributionsWhat are people saying aboutthese council areas?“Population growth in NSW is not evenlydistributed. The coastal regions outsidethe Greater Metropolitan Region of Sydney,Newcastle and Wollongong experiencedan annual average population increase of1.2% whereas the inland regions of NSWgrew by an average of just 0.3% per year inthe same period”(Drabsch 2011: 5).“As the population ages more retirees willmove to coastal and inland regional centreswhere they expect councils to provideaged care services (e.g. nursing homes andMeals on Wheels)”(Allan et al 2006: 11).“Governments have tended to dividerecurrent infrastructure fundingbetween regions according to the numberof existing residents…Consequently,the people in rapidly growing regionsnear capital cities and on the coast getsubstantially less than their fair share ofservices and infrastructure” (Daley andLancy 2011: 3).“Sea- and tree-changers used to citystandards demand higher grades of servicethan nonmetropolitan councils can afford”(Allan et al 2006:11).“Smaller coastal councils with a low ratebase struggle to maintain and upgradefacilities, infrastructure and services thatare used by visitors, such as public toilets,parks, gardens, cycleways and footpathsand sewerage and waste services”(National See Change Taskforce 2011: 3).“Residential and tourism developmentassociated with the sea changephenomenon does not necessarily leadto sustainable economic growth orimproved socio-economic outcomes forlocal populations”(Gurran et al 2005: 3).“Sea level rise and extreme stormsare virtually certain to adversely affectvulnerable developments along the coast:Some coastal areas are already subject tothe effects of coastal erosion, which will beexacerbated by rising sea levels”(DECCW 2010: xi).“The distinctive rural character ofcoastal hinterlands is threatenedby pressure for residential and ruralresidential subdivisions”(Gurran et al 2005: 7).“Consolidate local urban councils from 42to 11 (in the Sydney Basin) and one regionalcouncil for each of Newcastle, Illawarraand the Central Coast”(Association of Consulting EngineersAustralia 2009: 1).What do you think thesecouncils will be like infour years’ time?What about in 10 and 20years’ time – and in 2036?Destination 2036 Discussion Paper 17


Changes and challenges for Rural and Remote CommunitiesPopulations are notgrowing or may begetting smallerSome small townsare struggling tosurviveFarms are much biggerthan they once were,with fewer workersFor more information on the challengesfacing rural and remote communities, see:≥≥DOP (2008) New South Wales Stateand Regional Population Projections,2006‐2036≥≥DECCW (2010) Climate Impact ProfileWater is a big issue fordrinking and farmingAgriculture still a big partof the economy – but thereare also new industries andbusinesses emergingHigh speed internetmay provide newopportunities≥≥Australian Government (2011b)Sustainable Population Strategy forAustralia≥≥Drabsch (2011) Population, Housing andTransport Indicators for NSWMining can have abig economic andenvironmental impactStill losing youngpeople to the citiesand bigger townsHospitals, universitiesand other socialservices will continueto be a long way awayClimate change may beaffecting rainfall and otherweather patterns18 Our Communities | Our Councils | Our Future


Changes and challenges for Rural and Remote CouncilsWhat are these councilslike now?≥≥large to very large in area, generally over2,000 km 2 and some over 10,000 km 2≥≥small to very small in population,mostly between 2,000 and 10,000residents≥≥small budgets, often below $10 millionand generally below $20 million≥≥rates and annual charges account for15-30% of income≥≥usually reliant on grants for over 30%of income, with some over 50%What are people saying aboutthese council areas?“The depopulation of farming areasand small towns is undermining therevenue‐raising capacity of rural councils”(Allan et al 2006: 11).“Some regional communities, particularlythose in remote areas, may not have thenecessary resources to attract and retainskilled and professional people”(Standing Committee on RegionalDevelopment 2004: 2).“In the case of more remote councils withsmall populations spread over large areas,consolidation (whether amalgamation orshared services) may not be feasible”(Aulich et al 2011: 7).“Most council infrastructure is comprisedof roads and a high proportion of roadsare in under-populated rural shires whichdo not have the rate base to support theupkeep let alone renewal of such roads,especially regional roads”(Allan et al 2006: 28).“Population growth has been uneven, withcoastal cities growing faster than Australiaas a whole, while remote and inland countryareas have grown slowly or declined.The most significant declines occurred insmall rural townships with populations ofbetween 1000 and 2000 people”(Australian Government 2011b: 20).“Some councils spend much more percapita on services than other comparablecouncils. Reasons for this disparity includecouncils being…the ‘last one standing’,especially in rural areas where if a councildoes not fund a badly needed service(e.g. a school bus) the community may bedenied it”(Allan et al 2006: 14-15).“Smaller and slower growing parts ofrural and regional Australia remain greatplaces to live and should not be leftwithout services that increase wellbeing…However, these should be clearlyrecognised as subsidies to be justifiedon equity or social grounds, rather thanhoping they will generate self-sustainingeconomic growth”(Daley and Lancy 2011: 3).“NSW is expected to become hotter,with higher maximum and minimumtemperatures very likely to be experiencedacross the state in all seasons. Thegreatest increases in maximumtemperatures are projected to occur inthe north and west of the state”(DECCW 2010: x).What do you think thesecouncils will be like infour years’ time?What about in 10 and 20years’ time – and in 2036?Destination 2036 Discussion Paper 19


20 Our Communities | Our Councils | Our Future


IntroductionOur Future≥ How might we change in the future?Destination 2036 Discussion Paper 21


Managing changeIf you take a sample of communitystrategic plans which have beencompleted so far by councils in NSW,you find that people across the statewant many of the same things: safe andhealthy communities; clean and greenenvironments; liveable neighbourhoods;vibrant businesses; and ethical andresponsible governance. Many councilsin NSW are well placed to work with theircommunities to help achieve these things.However, councils will also need to bewilling to adapt and change in order tomeet existing and future challenges.The LGSA has suggested that in the next20 years, local government is likely to see:≥≥Significant climate change if mitigationis not successful≥≥Major geopolitical shifts acrossthe world≥≥Several turns of the economic cycle≥≥Significant population growthand change internationally andwithin Australia≥≥Several changes in government at theAustralian and NSW levels≥≥Continuous changes to informationtechnology≥≥Several new management theories(LGSA 2010: 7).Discussion about change in localgovernment is certainly not new. Councilsin NSW have been talking seriouslyabout change since the LGSA, LGMAand other stakeholders met as part ofthe Strengthening Local GovernmentTaskforce in 2006 – and recent years haveseen many voices, both from within andbeyond local government, weighing in withtheir perspectives and opinions.There is already considerable agreementwithin local government about someof the things which need to change.Consultation undertaken recently by theLGSA (2011) as part of its ModernisingLocal Government project revealed thatmost councils believe:≥≥that local government should berecognised in the Constitution≥≥that there should be different models ofelected councils and that communitiesshould have the flexibility to adopt thebest model for them≥≥that it will be important for councils todevelop additional sources of income inthe future≥≥that local government should addressbarriers that may prevent diversity inthe composition of councillors≥≥that there should be a revised role forlocal government in land use planning,including a complete review of thelegislation.While each point on this list may appearrelatively uncontroversial, collectively theyrepresent a significant change agenda forNSW councils.A recent paper on local governmentreform prepared by the LGMA (2011)considered most of these issues, aswell as other impediments to innovationand change in the sector, such asthe restrictions on the formation ofcorporations and other entities. There isthus much that NSW’s diverse councilsagree needs to change – and this createsa solid foundation for the creation of asector wide vision and action plan.As well as the things which councilsgenerally agree need to change, there arealso come potential changes about whichthere is a diversity of opinion. For instance,the LGSA consultation found that therewere differing views on:≥≥whether there should be an option forcouncils to have executive mayors≥≥whether the discontinuation of ratepegging alone will result in the financialviability of NSW councils≥≥whether all local government servicesand regulatory functions should beagreed between all three spheres ofgovernment, or whether some canbe left to the discretion of individualcouncils≥≥whether councils should act as theconduit for community engagement onall local services and issues.The LGMA paper again added a number ofissues to this list, including≥≥whether clarification or changes to theroles of mayors and general managersare necessary≥≥whether there needs to be a culturalchange within the way that councillorsand staff work together.These and other issues will be discussedand debated as part of the Destination2036 process. The Roadmap and ActionPlan begun at the Workshop will needto set out a path which moves localgovernment in NSW from talking aboutand reacting to change, to managingchange to create a preferred future.22 Our Communities | Our Councils | Our Future


Recent reforms in the United KingdomTransforming relationships between central and local governmentSpotlight on: EnglandPopulation is 50.4 millionThe sub national tier of governmenthas 9 regions, including the GreaterLondon AuthorityThe local tier of government has≥≥34 county councils≥≥238 district councils≥≥36 metropolitan councils≥≥47 unitary councils≥≥33 London boroughsConstitutional recognition?No - England has no constitutionThere is currently an extensive andcontroversial change agenda proposed forlocal government in the United Kingdom,which has many resonances with issuesbeing discussed in NSW (although manycouncils in the UK provide a larger rangeof services than those in Australia –including schools and housing). As aresponse to the impacts of the GlobalFinancial Crisis, the UK Government hassignificantly reduced funding to localgovernment, which has been a majorimpetus for reform of service delivery.In addition, in December 2010, theGovernment introduced its Localism Billto Parliament. It is claimed that the Billwill significantly shift powers from thecentralised state to local communities.Among its many proposals, the LocalismBill intends to≥≥increase the number of directly electedmayors – and require areas to have areferendum on whether they want adirectly elected mayor≥≥create executive mayors in the 12largest English cities≥≥allow councils to operate on one ofthree governance models: directlyelected mayor and cabinet; an indirectlyelected leader and cabinet; or acommittee system≥≥abolish central government capson council taxes and instead requirecouncils to hold a referendumon proposed increases above athreshold level≥≥allow communities to call for areferendum on any local issue theythink is important – and require localauthorities to take the results intoaccount when making decisions≥≥give communities the right to bid forthe ownership and managementof community assets – such as oldtown halls≥≥allow voluntary and community groupsto challenge to take over the running ofcouncil services.“No governmenthas ever passed a pieceof legislation like the LocalismBill… because instead of taking morepower for the Government, this Billwill give power away”Nick Clegg,Deputy Prime Minister,in UK Department forCommunities and LocalGovernment 2010: 1“The spendingreview does leave councilsfacing some of the biggest cuts inthe public sector. With no option butto inevitably, although reluctantly,cut frontline services that peoplerely on. These cuts will hurt.”Baroness Eaton,Chair of LocalGovernmentAssociation, 201024 Our Communities | Our Councils | Our Future


Recent reforms in South AfricaAllowing larger councils to choose their own model of local governmentSpotlight on: South AfricaPopulation is 47.4 millionThe sub national tier of government has9 provincesThe local tier of government has≥≥8 metropolitan councils≥≥46 districts≥≥321 local municipalitiesConstitutional recognition?Yes – the constitution not onlyenshrines local government, but alsoincludes detailed principles for itsoperation and relationships with otherlevels of governmentThe South African Constitutionestablished three different types ofmunicipality. Under the Local Government:Municipal Structures Act 1998, urbanareas are known as ‘Category A’municipalities if they have:≥≥areas of high population density≥≥an intense movement of people, goodsand services≥≥extensive development≥≥multiple business districts andindustrial areas≥≥a centre of economic activity with acomplex and diverse economy≥≥a single area for which integrateddevelopment planning is desirable.The Category A municipalities are alsoknown as unicities (much like Auckland‘super city’ tag). There are currently 8‘unicities’ in South Africa, ranging inpopulation from 0.7 to 4.0 million.Unlike the new Auckland Council, unicitiesin South Africa have a very large numberof councillors (the legislation allows upto 270, but in practice there are generallyabout 200).The most interesting thing about unicitiesfrom the NSW perspective is that theyare allowed to choose between two typesof governance: the mayoral executivesystem (where mayors are electedby the council and then choose theirown committees), and the executivecommittee system (where governanceis via a small committee elected bythe council).Seven of the eight unicities have chosen tobe governed by executive mayors.Other noteworthy features of the SouthAfrican system are that mayors can onlyserve a maximum of two five-year terms.Unicity councils also have speakers whochair council meetings – and the mayorcannot be the speaker.The South African approach may not,however, be serving rural and regionalparts of the country, with a recent reportprepared by the South African Departmentof Corporate Governance and TraditionalAffairs noting many difficult challenges,particularly for councils in rural areas andformer homelands.“The national ora provincial governmentmay not compromise or impedea municipality’s ability or right toexercise its powers or perform itsfunctions.”Clause 4, Section 151of the Constitution ofSouth Africa.26 Our Communities | Our Councils | Our Future


Elements and modelsWhat if NSW had a Local Government Actwhich allowed communities or councilsto choose their own council model? Howmany different models would be required?Models for local government couldpotentially address five key elements:governance, structure, functions, financingand capacity. Recent research on localgovernment in NSW and Australia hassuggested that each of these elementscould address a number of issues.Issues about Governance, such as:≥≥Number of councillors≥≥Type of mayor (executive or nonexecutive)≥≥Term of mayor≥≥Existence of governance sub structures(such as wards)≥≥Formalised community engagementmechanisms≥≥Level of compliance requirementsIssues about Structure, such as:≥≥Size and shape of council≥≥Population of council≥≥Structural resource sharingIssues about Functions, such as whethercouncils should provide:≥≥An agreed or required set of servicesand regulatory functions only≥≥An agreed or required set of servicesand regulatory functions, as well asother discretionary services≥≥Functions enabled but not required bylegislation≥≥Some additional services which arecurrently provided by State and FederalGovernmentIssues about Finance, such as:≥≥Reliance on rates income, withrate pegging≥≥Reliance on rates income, without ratepegging or with more flexibility to gainexemptions from the rate cap≥≥Reliance on grants≥≥Greater diversification ofincome sources≥≥Resource sharing arrangementsIssues about Capacity, such as:≥≥Maintaining or increasingstrategic capacity≥≥Increasing efficiency ofservice provision≥≥Changing delivery mechanisms (suchas greater outsourcing of functions andpartnerships)Can you think of any otherissues or options whichshould be considered aspart of future models?Destination 2036 Discussion Paper 27


Elements and modelsWhen you put the fiveelements of governance,structure, functions, financingand capacity together, youcould form a series of modelsfor local government in NSWin the future. These modelscould potentially include…Approach 1≥Big councils with broadfocusThis model could suit councils with largepopulations and geographic areas, whichmay have been amalgamated. Councilsusing this model could potentially begoverned by a larger number of councillorsthan the Act currently permits – and itmight be appropriate for councils usingthis model to have the option to havean executive mayor, being full time,remunerated accordingly and with greaterresponsibilities than current Mayors.It may be easier for these councils toshow strong strategic leadership in theircommunities, and they could possibly haveincreased flexibility in setting rates oncethey demonstrate high quality integratedplanning and reporting. These councilscould provide a core set of services – andcould also respond flexibly and creativelyto the needs of their communities. Thesecouncils may have some kind of formalisedsystem of community engagement,particularly on local issues.Approach 2≥Small to medium councilswith tight focusThis model could be pertinent to councilswith small to medium populations andbudgets which wish to focus on thedelivery of a core set of services. Mayorscould either be directly elected for a fouryear term – or elected by councillorsfor a shorter period. These councilsmay be able to increase their financialviability by entering into resource sharingarrangements with their neighbours.They may be able to achieve exemptionor greater flexibility from rate pegging –but would need to demonstrate strategiccapability and high quality integratedplanning and reporting to do so. It mayalso be appropriate for there to be a liftingof some compliance requirements oncouncils using this model.Approach 3≥Small and nimble councilsThis model could appeal to councils withsmaller populations and budgets, whichmay be of any geographic area. Mayorscould either be directly elected for a fouryear term – or elected by councillors for ashorter period. There could be recognitionthat these councils rely financially ongrants and focus on delivering a core setof services, but may also have developedinnovative solutions to local challenges.As in Model 2, it may also be appropriatefor there to be a lifting of some compliancerequirements on councils using thismodel. In this model, councils may be earlyadaptors of new community engagementtechnologies, particularly wherecommunities are distributed over largegeographic areas.28 Our Communities | Our Councils | Our Future


Creating a preferred futureNothing like the Destination 2036Workshop has ever been held in NSWbefore. It is a truly unique opportunity forour civic leaders to talk together about thefuture and plan for the kind of councilsthat our communities deserve.To do this we need to be able to imagineour communities in 5 years, 10 years, 20years and even 25 years, and consider howwe can best serve them.We need to reach beyond our individualopinions and develop a collective viewabout what needs to change. We need tolearn from the past to help us focus on thefuture - creating a legacy that works.What will great local government look likein the future? What changes are neededto achieve that future? What are the toppriorities? This is what the Destination2036 project is about.This is a real opportunity to start buildingstronger relationships of trust that willhelp build a local government futuretogether. If not us, then who?What happens in theWorkshop?In the Destination 2036 Workshop, we needto work as equals - creatively, openly andthoughtfully. The Workshop purpose is:≥≥To create a bold vision for localgovernment≥≥To identify the roadmap that will put uson a path to this vision≥≥To develop a shared view on the rightmodels for local government≥≥To develop and get excited about ashort term Action Plan: not a wish listbut something clever and achievablethat focuses on priorities for 4 years≥≥To create an opportunity for newrelationships of trust within andbetween local and state government tohelp deliver great local government.Start being heard beforethe Workshop – fill in theshort online survey forparticipantsCan I have a say before theWorkshop?In order to achieve the Workshop purpose,we will have a lot of work to complete inthe two days in Dubbo. To help us withthis work, and to understand the viewsof participants on some of the issuescovered in this Discussion Paper, we haveprepared an online survey.The survey will only take 10 minutesor so of your time – so we encourageparticipants to take this opportunity tohave your thoughts heard, right from thebeginning of the Destination 2036 process.How else can you preparefor the Workshop?Reading this Discussion Paper, andfollowing up on any of the referencedocuments which interest or inspireyou, is a great start. Thinking aboutorganisations, industries and people youknow who have planned and managedchange well will also be useful - what didthey do that worked?How can others provideinput?If you are a Mayor, Councillor or CountyCouncil Chair, you may like to discuss theopportunities and challenges facing localgovernment with your fellow Councillors. Ifyou are a General Manager, County CouncilChief Executive or ROC Executive Officer,you may want to talk to your staff abouttheir ideas for the future of the sector.Bringing an array of ideas to the Workshop,without fixed positions, will help theconversation.You can also encourage Councillors andstaff to participate in a web forum,which they will soon be able to access atwww.dlg.nsw.gov.au.What will happen after theWorkshop?The Destination 2036 Workshop isthe start of a conversation. After theWorkshop, it is expected that there will beongoing discussion and engagement witha wide range of people and organisations,both about the overall roadmap for localgovernment in NSW, and about specificactions in the Action Plan.Destination 2036 Discussion Paper 31


32 Our Communities | Our Councils | Our FutureReferences≥


Allen, Percy, Darlinson, Libby andGibbs, Diana (2006) Are CouncilsSustainable? Final Report: Findings andRecommendations – Independent Inquiryinto the Financial Sustainability of NSWLocal GovernmentAssociation of Consulting EngineersAustralia (2009) Sydney Towards TomorrowAuckland Transition Authority (2011)Auckland in Transition: Report of theAuckland Transition Authority Volume 1Aulich, Chris, Gibbs, Melissa, Gooding,Alex, McKinlay, Peter, Pillora, Stefanie andSansom, Graham (2011) Consolidation inLocal Government: A Fresh Look AustralianCentre for Excellence in Local GovernmentAustralian Government (2011a) Our Cities,Our Future: A National Urban Policy fora Productive, Sustainable and LiveableFutureAustralian Government (2011b)Sustainable Australia – SustainableCommunities: A Sustainable PopulationStrategy for Australia Department ofInfrastructure and TransportDaley, John and Lancy, Annette (2011)Investing in Regions: Making a DifferenceGrattan InstituteDrabsch, Talina (2011) Population, Housingand Transport Indicators for NSW NSWParliamentary Library Research ServiceEaton, Baroness Margaret (2010)‘2010 Spending Review: Facing thefuture’, Chairman’s speech to UK LocalGovernment Association Conference, 21October 2010Gough, Roger (2009) With a Little HelpFrom Our Friends: International Lessons forEnglish Local Government Localis and UKLocal Government AssociationGurran, Nicole, Squires, Caroline andBlakely, Ed (2005) Meeting the Sea ChangeChallenge: Sea Change Communities inCoastal Australia University of SydneyLocal Government Managers AustraliaNSW (2011) Local Government ReformLocal Government and Shires Associations(undated) NSW Voluntary StructuralReform in NSW Local GovernmentDiscussion Paper prepared by GregHoffman Consulting Pty LtdLocal Government and Shires Associations(2010) Modernising Local Government:Discussion PaperLocal Government and Shires Associations(2011) Modernising Local Government:Consultation ReportMaiden, H E (1966) The History of LocalGovernment in New South Wales Angus &Robertson, SydneyNational Sea Change Taskforce (2011)NSW Coastal Policy PaperNSW Department of Environment, ClimateChange and Water (2010) NSW ClimateImpact ProfileNSW Department of Local Government(1986) Local Government in NSWUnpublished documentNSW Department of Planning (2008) NewSouth Wales State and Regional PopulationProjections, 2006-2036NSW Division of Local Government (2010)Snapshot of NSW Councils: ComparativeInformation on NSW Local GovernmentCouncils 2008/09NSW Division of Local Government (2011)Collaborative Arrangements BetweenCouncils: Survey ReportPaddon, Michael and Artist, Sarah (2004)Paths for Women in Local Government:National Figures and Local Successes UTSCentre for Local GovernmentSGS Economics and Planning (2007)National Growth Area Alliance ResearchProject: Survey of CouncilsSouth African Department of CooperativeGovernance and Traditional Affairs (2009)State of Local Government in South Africa:Overview ReportStanding Committee on RegionalDevelopment (2004) Attracting andRetaining Skilled People in RegionalAustralia: A Practitioner’s GuideUK Department for Communities andLocal Government (2010) Decentralisationand the Localism Bill: An Essential GuideUK Department for Communities andLocal Government (2011) A Plain EnglishGuide to the Localism BillWestern Sydney Regional Organisation ofCouncils (2010) Getting Western SydneyGoing: Financing the Infrastructure Needsof Western SydneyWestern Sydney Regional Organisation ofCouncils (2011) 2011 State Election: IssuesPapersDestination 2036 Discussion Paper 33

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