Are Bigger Councils Better?


Constitutional recognition for local government is long overdue. The referendum in September is a sound idea, but it occurs during a critical period for local government in NSW. Yes, local government looks set to be recognised – but what sort of local government will that be?

The NSW Government’s Local Government Review Panel recently called for wholesale changes, most notably the amalgamation of local government areas into much larger “super councils”.

Now that local government looks set to be constitutionally recognised it’s vital for the people of this state to consider what we want that local government to be – large or small?

The people of NSW have always seen local government as the most accessible layer of government; a level in which individuals, or modest groups of individuals, have the opportunity to influence government decision-making in a meaningful way. For that reason local governments are not meant to be big. Rather they are meant to be accessible, responsive and reflective of the communities they represent.

Yet those pushing the "bigger is better" case, argue that larger councils will be more efficient. Certainly the economies of scale argument makes sense in theory. But how does it work out in practice? A useful case study is just across the ditch.

The city of Auckland was actually cited by the panel as an example in its report, having recently undergone many of the reforms now being proposed for NSW. It saw the consolidation of one regional council, four city councils, three district councils and a number of community boards into one governing body and 21 local boards. Yet far from improving the finances of council, things are actually going backward.

According to New Zealand's Assistant Auditor-General Bruce Robertson, Auckland City Council's current debt is more than $5 billion and is projected to increase to more than $12 billion by 2021/22. So it costs more. But what about its effectiveness?

New Zealand’s Auditor-General, Lyn Provost was clear last year. "Because of its size, the Council will wrestle to communicate internally effectively. It will also struggle to be responsive and agile for its communities and the users of its services," she noted.

That result shouldn’t be surprising. The NSW panel even recognises that bigger governments are likely to result in the loss of local identity, noting that experience suggests "that special efforts need to be made after an amalgamation, or in a large, growing local government area, to support local identity at the level of suburbs and townships, or in the pre-existing council areas".

The solution they came up with for this inevitable loss of local identity is an additional level of elected representative called a Local Board, that would carry out functions delegated to them by the Council. The Local Board system has been trialled in Auckland, where they have taken on a life of their own and are now looking to obtain secretariat support — another expensive level of bureaucracy to support.

The Auckland example is key, because it runs counter to much of what is happening in the public sector in developed nation economies and which is the very opposite of what is being proposed by the panel. The idea of devolution is catching on across the globe as an attempt to use modern technologies to assist in bringing decision makers closer to the resident, shortening the feedback loop and thereby improving the quality of service delivery. Devolution of authority is aimed at allowing local government to adapt quickly to changing circumstances and customise delivery of services to the unique needs of their constituents.

Viewed in this light, it is difficult to see the approach taken by the panel as anything other than antiquated and tired. Bigger, centralised solutions may have been popular in the decades following the Second World War, and they were indeed proposed by the McKell Government, the Wran Government and several others. But now that local government looks finally set to be welcomed into the constitutional fold, it’s a great time to get a little bit more innovative and modern when it comes to our approach to local government.

A bigger, less personal, centralised, quasi-state government is not what local representation should change to – and it’s certainly not worth paying for.

The NSW Government's T-Corp report suggests that "[council]rate revenues need to grow", and that an increase of between $100 and $200 a year would be "acceptable for most NSW ratepayers". They may be right. But if residents will want that money to pay for something far more useful than more bureaucracy and more impersonal layers of local government.

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