Local Government Futures

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Local GovernmentFutures

• Graham Sansom
• UTS Centre for Local Government

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Councils of the Future

• Contemporary and effective councils will
• demonstrate awareness and sensitivity to local
  democracy
• advocate effectively for social justice, economic
  growth and the aspirations of their communities
• perform as world class, customer driven
  organisations
• provide quality services and ensure best value
  for money
• seek continuous improvement for all their
  services
• encourage and support economic development
• fund and maintain a sustainable infrastructure
• ensure their viability through prudent financial
  management
• engage in regional cooperation between councils
  and with government agencies (Victorian
  DOI)
• This is government, not just administration

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Social Dynamic

• Expectations
• Lifestyles
• Customer service
• Participatory democracy
• Community vs self-interest?
• Concerns about future quality of life (eg Tweed
  survey)
• Global-local tensions
• Increasing disparities between (and within) local
  government areas
• When will problems with infrastructure and the
  public realm really bite?

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Ageing

• Workforce Issues
• Absolute shortages retaining older workers, job
  redesign, productivity
• Skills base and training
• Community issues
• Widely varying impacts on councils
• Ageing in the suburbs
• SeaChange councils
• More people with disabilities
• Services population mismatch
• Further gap between rich and poor?
• Revenue implications

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Sources of revenue
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A declining share
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The 3bn gap

• If local government revenues had grown as fast as
  those of the Commonwealth (but still slower than
  the States), Councils across Australia would now
  have around 3billion more to spend each year.

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Changing priorities
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Cost-shifting inquiry

• Hawker Report findings
• LG is in reasonable financial health overall, but
  smaller councils are struggling
• LG revenues have lagged behind responsibilities
• There is a serious shortfall in infrastructure
  funding
• Councils should say no to some community
  demands
• Cost-shifting amounts to 0.5-1.1bn pa (ALGA)
• States impose unwarranted limits on revenue
• State/Federal businesses should pay rates
• Financial assistance grants should be
  restructured

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Infrastructure shortfall

• Councils across Australia are under-spending on
  infrastructure both new items and especially
  maintenance
• Various studies tell the story
• South Australia overall shortfall of 105m pa,
  rising to 240m pa in 25 years time
• Victoria Auditor General estimates roads
  shortfall of 280m pa
• NSW LG Dept estimates 156m pa on roads
• WA shortfall of 61m pa on road maintenance
  alone
• NOLG estimates 640m pa nationally on road renewal

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Scope to borrow?

• The mantra of debt reduction
• reduce debt so that in the future we have
  more funds to meet more of the needs of our
  community (???!!!)
• Local government is now a net lender on money
  markets
• Nationally, financial assets exceed debt by about
  1.7 bn
• Only Queensland and Tasmanian councils have
  significant net debt linked to water and
  sewerage businesses
• Most councils can and should borrow more
• Public debt is cheaper than private sector
  financing (subject to efficiency)

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The Rural Dilemma

• Majority of councils still have lt10,000 people
• often large area but very small revenue base
• limited range of functions government or just
  administration?
• lack of professional skills
• less able to apply successfully for grants
• yet often growing community need for local action
• Amalgamation/resource sharing often impractical
• Often strong community identity and support
• although conservative view of local governments
  role
• Nominally subject to same laws/policies as larger
  councils
• But will a uniform system of local government
  remain viable?

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Intergovernment Issues

• Constitutional framework vs political reality
• Commonwealth dominates - deals directly with
  local government when it suits
• States negotiate/compromise when funds are at
  stake or they need local government cooperation
  or resources
• Local government enjoys some autonomy - elected,
  independent tax base, States cant supervise
  totally
• Community support a key factor - especially in
  the bush
• Global-local forces may pose a threat to States
• Commonwealth and States lack a consistent vision
  or policy for local government
• a compliant servant or a robust partner?
• an essential, integral part of the public sector?
• an additional contributor of resources or a
  rival?

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Constitutional Fiction vs Reality?
Commonwealth
Commonwealth
State
Local
State
Local
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Differing (and Changing) Roles
Federal
Ends
State
Means
Local
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Downside Risks

• Survival, but a slide into irrelevance
• Lack of clear role and direction
• Financial weakness
• Narrowing focus on basic services
• Major infrastructure problems
• Loss of community confidence, engagement and
  support
• Growing customer dissatisfaction
• Increasing State dominance and encroachment

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Surviving and prospering

• Strengthen the community base
• Participatory government and local community
  focus
• Promote informed public judgement
• Forge partnerships
• Strengthen the revenue base
• Increase recurrent revenue from a range of
  sources
• Judicious borrowing for infrastructure
• Strengthen policy and intergovernment relations
• Regional and sector-wide cooperation
• Take the lead in defining future role and key
  issues
• Strengthen management skills
• Corporate and financial planning, and asset
  management
• Continuous improvement, innovation and creativity