Peter McKinlay Director Local Government Centre AUT University

1. Future of Local Government Summit 2012Building Tomorrow’s Local Government: Learning from the Global Context Peter McKinlay Director Local Government Centre AUT University

2. The FOLG Journey • Began in 2005 – a vision that “local government facilitates the building of strong and successful communities”. • Successive FOLGS have debated the very wide range of trends and stakeholders influencing local government. • We have come to this FOLG with a commitment to set and act on a new direction for local government. this

3. What This Presentation Will Cover • A preferred future role for local government. • The likely benefits. • Some broad strategies. • Some conclusions.

4. What Do We Mean By Local Government? It’s very easy to talk past each other. Instead, think of three distinct albeit overlapping roles: • Metropolitan governance. • District or service delivery. • Community governance – neighbourhoods; communities of interest.

5. Globalisation: A Common Driver • The rise of cities, especially metropolitan centres. • The increasing importance of face-to-face relationships. • Growing competitive pressure on the tradable sector is changing the game for the non-tradable sector, including local government. • Globalisation giving birth to glocalisation – an increasing attachment to local place.

6. Metropolitan Governance • Emerged as a separate theme in the1990s. • Big impact on local government restructuring – London; Toronto, Ottawa and Montréal; Auckland; Perth. • The importance of relationships city to city and the competitiveness of cities. • Highlights quality of life (Richard Florida) and infrastructure – the ability to move around (Economist Intelligence Unit).

7. The Growth of Melbourne

8. Some Key Pre-Requisites for Effective Metropolitan Governance • A single voice in international fora. • Governance arrangements which facilitate decision-making and implementation for major regional matters. • Decisions can encompass the economic footprint of the metropolitan area. • Sub-regional matters decided sub-regionally. • Adequate ‘own-source’ funding.

9. The Standard or Service Delivery Council • It’s the relationship people experience most often – and it’s not well understood. • The standard local government structure had a charmed life until the late 1980s –and then restructuring began. • Largely driven by a view that there were major gains through amalgamating councils – the evidence was at best mixed, but restructuring was widespread.

10. The Restructuring Impact

11. A New Emphasis: Capability The Queensland restructuring – a shift from cost saving/economies of scale to capability: • “Stronger, more robust local governments will enable councils to attract and retain staff with the requisite skills and competencies needed to ensure that the performance of core functions.” New South Wales: • But one size doesn’t fit all: Destination 2036: “develop a variety of local government structural models to suit different environmental contexts.”

12. A Renewed Emphasis on Collaboration to Reduce Costs(1) It’s about the costs of delivering service: Strong Foundations for Sustainable Local Infrastructure: We encourage the Australian Government to work with other jurisdictions to create formal regional structures with responsibility for delivering and financing infrastructure investments.

13. A Renewed Emphasis on Collaboration to Reduce Costs(2) And it’s about the costs which local government choices impose on others: Productivity Commission: Local Government coordination and consolidation in relation to regulatory functions has the potential to address the burdens that business face.

14. International Trends – Efficiency Initiatives in a State of Flux International experience with local government efficiency shows widely varying approaches from higher tiers of government: • England – major withdrawal from detailed oversight of local government. Instead relying on major funding cuts to encourage efficiency. • New Zealand – recently introduced legislation would allow central government to micro-manage local government. • The lesson? Local government lives in uncertain and high-risk times.

15. The Consultation Disjunct • Formal arrangements for local government consultation can be counter-productive – widening the gap between councils and communities. • Major stakeholders often feel disenfranchised – and so look to higher tiers of government to achieve their objectives (this has been a common trigger for forced restructuring).

16. Shared Services • In many jurisdictions local government has a very indifferent track record. • A problem of people or a problem of structure? • The emergence of a new approach based on multi-council owned companies and ‘centres of excellence’.

17. Managing Risk – Taking Your Stakeholders With You Setting the scene for local government to facilitate the building of a strong and successful communities, and take control over its own future: • Getting consultation right – building trust with communities and major stakeholders. • Demonstrating you are in business to meet the needs of your communities and stakeholders – not to put your own interests first. • Carry this through in shared services – everything you do should be at the least cost to get the outcomes you seek – the ‘indifference principle’.

18. Community Governance • This is a largely new and very exciting development – councils working to support the interest people have in sharing in the decisions which affect the places where they live and work. • Recognises changing demands from citizens in what they want from councils. • Challenging, but with the potential to underpin local government’s critical role in the governance of Australia’s communities.

19. Benefits From A New Approach • Building real support from communities and key stakeholders for the work their councils do (remember, most local government restructurings are the direct result of lobbying by dissatisfied stakeholders). • Applying the ‘indifference principle’ can be an effective means of answering the concern that smaller councils lack capability. • Community governance is at the heart of the FOLG vision of building strong and successful communities.

20. Some Broad Strategies • Each council will have its own priorities, but rebuilding confidence in local government is a sector wide challenge. • This requires collective action, and the ability to work for the greater good, rather than the sometimes more local interests of individual councils. Set joint goals to raise the standing of local government, and commit to achieving them. • Ask what your communities and stakeholders want – effective engagement; services that match their needs; the least cost, ‘centres of excellence’, approach implicit in the ‘indifference principle’.

21. Some Concluding Thoughts(1) Change in local government is often plagued by complexity and the problem of where to start. To make progress we need to cut through the complexity and focus on a few critical themes: • Local government has enormous potential to help its communities shape their preferred futures – but we need a clear sense of direction and capability. • We need clarity of thinking about local government – knowing the differences between Metropolitan governance, district or service delivery, and community governance – one size does not fit all.

22. Some Concluding Thoughts(2) • Local government faces a high risk environment with demands to lift performance in new and challenging ways. A clear, determined and well supported strategy is needed to demonstrate the capability to change without intervention. • It needs a collaborative approach – between councils, across the sector and with key stakeholders. There’s a lot of commitment and knowledge within the sector. The challenge is to turn that into action and time is not on local government’s side. • National and international pressures to lift performance are compelling.

23. And The Final Thought We have the vision. We know what needs to be done. This Summit is the place to start.