By Graham Sansom and Tim Robinson
The NSW Auditor-General Margaret Crawford recently released her first-ever local government performance audit, following the 2016 changes to the NSW Local Government Act that transferred oversight of council auditing to her office. The Auditor General’s assessment of council reporting on service delivery makes interesting reading for those concerned to promote a broader view of the role of local government and, in particular, to pay more attention to the quality of place-based governance and local democracy.
In one sense the Auditor-General’s findings and recommendations can be seen to echo the Productivity Commission’s comments on local government in its recent Shifting the Dial report. Making council reporting on service delivery the topic of the first NSW sector-wide performance audit again suggests a centralist view that what really matters is efficiency and effectiveness in the ‘utilitarian’ elements of local government’s role. However, it’s important to note the Auditor-General’s focus on the NSW Integrated Planning and Reporting (IP&R) Framework, and the need to strengthen it. As well as providing a vehicle for more rigour in measuring efficiency and effectiveness, IP&R offers the opportunity to link service delivery with local planning, governance and democracy within a broad strategic framework.
IP&R can also prompt much-needed discussion about what elements comprise ‘efficiency’ and ‘effectiveness’, and how broadly we define ’services’. Research by the Australian Centre of Excellence for Local Government (Why Local Government Matters) found that more than half of survey respondents disagreed with the proposition that decisions about service delivery should be made primarily on the basis of value for money. Similarly, surveys conducted as part of rate-pegging in NSW have shown that, contrary to the widespread political obsession with minimizing rates, many people are willing to pay a bit more for what they regard as better outcomes.
The Auditor-General’s findings include very reasonable calls for councils to improve the way they go about setting targets and reporting performance within the IP&R framework. There is also a welcome acknowledgement that State agencies could do much to alleviate the burden of regulation by consolidating their requirements for reporting by councils.
However, danger lurks in the recommendations which are all about steps the Office of Local Government should take to implement a State-wide, consistently applied, Performance Measurement Framework. This runs the risk of more centralised bureaucracy and, based on past experience in NSW and elsewhere, more emphasis on indicators that are easy to measure rather than those that need to be measured – for example, how many library books are being borrowed, rather than what community benefits are being achieved. Perhaps significantly, whilst the recommendations also talk about outcomes, they appear to replace the potentially broad concept of ‘effectiveness’ with the much narrower term ‘cost effectiveness’.
Local government needs to avoid being pigeon-holed as an administrative agency and service deliverer, and the best way to do that – and at the same time enhance its reputation and clout – is to improve ‘strategic capacity’ that integrates all elements of its role. In this regard it’s noteworthy that the Auditor-General considers the Office of Local Government will need to ‘assist rural councils to develop their reporting capability’. This suggests a significant shortfall in capacity for good local governance in rural areas that needs to be addressed more broadly.
So from the perspective that local government should be seen as democratic government rather than merely administrative units, a key issue is what the Office of Local Government does from here, and how it goes about it. The model of a ‘service’ used by its counterpart in Victoria allows for ample connection to strategic plans and their consideration of community needs and ultimate service outcomes. This can help to put services in the broader democratic and public value context.
The devil is in the concept of ‘whole of sector’ frameworks that tend (intentionally or not) to result in both a reductionist view of local government and attempts to homogenise councils and services. This tendency is evident in Victoria’s Performance Reporting Framework Indicator Workbook, which appears quite disconnected from the important community-building efforts of the local government sector that have been widely applauded.
Sector-wide measures of effective financial management and efficiency are one thing; providing effective and appropriate services required by a particular community is quite another, and not something which easily lends itself to common sector-wide measures. Rather, as the NSW Auditor-General acknowledges through her references to IP&R, it should be about the specific goals set out in councils’ strategic plans and based on extensive community engagement.
If, as we hope, Australian local government continues to move to place-based governance and broader collaborative models, we will need to re-think performance management frameworks. People who see themselves as citizens rather than merely ‘customers’ are likely to adopt a much broader view as to what constitutes ‘service delivery’: support for recycling as a key element of waste management, albeit at increased cost, is an obvious example. Similarly, the rapid take-up of solar panels suggests that whilst price is important, people are just as concerned about reliability of service and wider environmental issues.
Stakeholders outside government, and especially local communities, often have ideas about what constitutes good performance by local councils that are very different from those of State agencies. Local Government New South Wales has rightly drawn attention to ‘unjustified and adverse interpretations of performance’ that have been all too prevalent in previous approaches to comparative reporting. Its call for a partnership approach to the development of a better reporting system should be heeded: preferably the association itself would undertake much of the work involved.
Fresh thinking about the future of local government and governance 