In the 1990s, Local Government throughout Australia was in an era of profound change. In 1993, for example, a new Local Government Act was introduced in New South Wales that fundamentally changed the way councils operated.
The new Act wiped away over 70 years of tradition and introduced a corporate model that, among a great range of other changes, clearly separated the political process from day to day operations and required a much more strategic, integrated and open approach to operations and resource allocations.
At the same time as this change was introduced, councils also faced the onset of a series of trends that collectively have helped Local Government as it exists today.
One of the trends (or challenges) related to ever increasing community expectations in relation to what a council could do and how open and accountable it should be in its program delivery.
Another related to the propensity of other levels of government – particularly State Governments – to overtly or covertly shift the burden of service delivery and regulation to Local Government without also shifting enabling revenue with it.
A third lay in constraints imposed by community capacity and State legislation on the ability of councils to raise funds for required works.
A fourth, but by no means final trend/challenge, lay within councils themselves, and relates to a desire to do more – to break free of the ‘roads, rates and rubbish’ orientation and become heavily involved in cultural development, environmental programs, law and order, community development and much more.
Voluntary structural reform
A fifth element gained increasing prominence in Australia in the 1990s – council amalgamation. The initial motivation for council amalgamation was to some extent ideological – a manifestation of the prevailing dominance of economic rationalism and an accompanying desire for smaller government and private sector process.
At its most extreme form, such as the Victorian State Government’s compulsory amalgamation model of 1994, amalgamation was aggressively enforced and Local Government within that State was effectively and irrevocably changed almost overnight.
In New South Wales, the State Government adopted a different approach to Victoria’s and, to a much greater degree, allowed local communities a say in the geographical boundaries attached to their council area, and as such, councils took to achieving ‘better government’. This more hands off approach – Voluntary Structural reform – also allowed for a period of reflection of the actual, as opposed to perceived benefits of smaller government and big councils.
The imperative, however, to demonstrate efficiency and to prove that a better future was being striven for, remained intense both internally within councils and externally within wider Government.
In the late 1990s the then members of the Hunter Regional Organisation of Councils (HROC) reviewed the recent past in relation to Local Government reform.
While not denying a need to embrace change, the councils determined that wholesale amalgamation was not an answer to community needs and that a new and better model existed – the Integrated Local Area Council (ILAC) model.
ILAC
The ILAC model is designed to create an optimal ‘region’ – either within an existing Local Government area or shared between a number of Local Government areas – for each actual or potential service offered by or required of Local Government.
The ILAC model presumes:
- priority should be given to preserving current Local Government area boundaries unless change to those boundaries is sought by he councils and communities involved
- improvement in the scope and effectiveness of services delivered is as important as savings in those services that might be made through economies of scale
- continuous improvement and economies of scale can be achieved just as effectively through ‘regionalisation’ and ‘system satisation’of shared service delivery and are more likely to be accompanied by service relevance and local benefit
- change and continuous improvement become real when participants feel that they are part of the process and can see that it is worthwhile.
In simple terms, the ILAC looks at an activity and determines its ‘natural catchment’. Some issues such as air quality, water quality, even weeds growth need to be addressed at a regional and sub regional level if they are to be managed well. Staff training and skills development may be locally driven, but their core themes are shared among councils.
Large scale purchasing – even that incorporating a local supplier preference – is an area where there may indeed be buying power through participation of an effective ‘larger entity’.
The natural area of operation – the catchment – of these activities varies according to the characteristics, potential or implications that attach to them. They are not necessarily constrained by arbitrary lines on a map.
The ILAC model is therefore truly rational in its approach in that it looks at what makes sense in terms of service delivery, rather than historical precedent or a one size fits all approach.
It also works because the level and range of participation is not imposed and local accountability is enhanced.
Hunter Councils today
In its present form, Hunter Councils resources political advocacy through the operation of the Board of Hunter Councils, which comprises the Mayors of its 11 member councils. It also supports Local Government efficiency and effectiveness through the operation of a number of business units whose activities are guided by the General Managers of member councils.
The areas of shared endeavour include:
Environmental programs in 14 council areas through the operation of the Environment Division and the mechanism of the Hunter and Central Coast Regional Environmental Management Strategy
Training and development through the Statewide, interstate and overseas programs of the Local Government Training Institute, and by support to 20 professional teams across the region
Large scale purchasing managed on behalf of 54 councils by our Regional Procurement Division
Records management through the services provided by Hunter Records Storage to government and the private sector
Film and television attraction and approval for 13 councils managed by Screen Hunter Central Coast
Consultancy services provided free to member councils and on a commercial basis to other levels of government and the private sector.
Growth of the Hunter Councils organisation has been exponential since 2000.
The reasons for this include:
- the shared service activities have been run as businesses
- member councils have not been asked to provide up front capital. The organisation has had two substantial growth phases that were enabled by the construction of major facilities – the Hunter Records Storage complex and office space, and the Local Government Training Institute. Both facilities have been funded by income generation. One outcome of this approach is that substantial property assets have been acquired at no cost to members
- the focus has always been ongoing reduction in member council subsidies. As a result of this approach, all member contributions have been eliminated except for a minor contribution to grant funded environmental programs
- the organisation has been responsive to market activities and has had the support of member councils in seeking out new commercial opportunities. This support has, however, been predicated on Hunter Councils establishing a clear business case for each opportunity, and growth/investment has only occurred when the organisation has demonstrated capacity to fund, in the long term, any debt that might be generated
- Hunter Councils has offered value for money and access to services and expertise not usually available to larger councils, let alone smaller regional councils. This is a critical factor in guaranteeing commitment and in establishing and maintaining credibility with stakeholders
- finally, and importantly, Hunter Councils – as a broker for regional shared services – has focused on tangible local benefits and local capacity building. In that sense, Hunter Councils has not promoted its success as an organisation. Success has been measured by the degree to which outcomes are achieved for local communities, and has been promoted through a focus on ‘council’ performance under the Hunter name.
* Roger Stephan is CEO of Hunter Councils Inc.