Councils argue they’re already working collaboratively. Yet central government has been pushing for more shared activities. Skirmishes have centred on provisions in the Local Government Act 2002 Amendment Bill (No 2). Ruth Le Pla wonders why it’s all so hard to sort out.
If there was one rallying cry guaranteed to galvanise action at this year’s July LGNZ annual conference in Dunedin, it was talk of the Local Government Act 2002 Amendment Bill (No 2). More specifically, it was talk of the provisions in the Bill giving the Local Government Commission the ability to set up CCOs without the agreement of communities or councils.
LGNZ president Lawrence Yule has gone so far as to call it “one of the biggest single threats to democracy” the sector has faced.
“Local authorities are elected by local electors and ratepayers,” he told Local Government Magazine, “and we think they should be the ones to determine whether there is a different way their assets are run, managed or owned.”
Big ticket items such as water and roading assets lie at the heart of the debate.
Lawrence argues that if you take away the critical mass of water and roading from councils you are taking away a major part of what they do.
“If you are a small council you would be left with no critical mass and then they say should we actually merge somehow. And that is where you get into amalgamation by stealth.”
So it must have been music to the ears of many people in the sector to have heard Prime Minister John Key’s recently-reported statement that his government isn’t “absolutely buttoned down” on the issue. He said he “won’t die in a ditch” over the Bill, and “if there’s a better way forward” he’s open to discussion.
SOLGM CE Karen Thomas tells Local Government Magazine she interprets this as the Prime Minister starting to signal his party has got other more important items on its agenda. “And if this doesn’t go any further they’re not going to get too upset about it.”
Lawrence Yule says carefully “there are conversations going on”. He adds he’s hopeful the government might “amend its stance on that particular provision and we’re certainly working hard to see whether they can”.
At a media briefing in mid September he said more bullishly that he expected to see “within the next few weeks” whether or not the government will stick to its guns. “This is a lightning rod issue for our sector and will be followed up intensively.” He also pointed out that 2017 is an election year for central government.
Karen Thomas notes there’s been an active campaign of opposition against the Bill from almost all councils around the country, plus quite a bit of opposition from other parties within the House.
LGNZ says 60 councils have written submissions on the Bill, and 32 of them appeared before the Local Government and Environment Select Committee to argue their case.
When LGNZ put its own submission to the committee on September 1, more than 15 mayors, chairs and councillors of regional, city and district councils from around the country travelled to Wellington in support.
All this is playing out at a time when the lexicon of local government is increasingly shifting from talk of “consulting” stakeholders to “working collaboratively” with them, anyway.
So how exactly are councils already collaborating? And, even if government backs down on these provisions in the Bill, won’t the local government sector inch towards the creation of more CCOs, or perhaps their equivalents, voluntarily over time? When SOLGM did a sector-wide stocktake at the end of last year it used the term “shared services”. Its survey defined these as arrangements where “two or more local authorities work together to deliver physical services or share capacity to undertake some administrative or support activity”.
Such activities, it said, may be “managed through a contract, joint venture, joint committee, trust, CCO or some other organisational form”.
Confusingly, there does not seem to be a convenient one-stop list of shared services, or collaborative activities, across the whole of the local government sector. Certainly, Lawrence Yule says he’s not aware of one.
Morrison Low executive manager government business Bruce Robertson points out you only have to talk with individual local authorities and they’ll come up with a “whole swag of lists” of ways in which they are doing individual little bits with somebody else. “Most regions in some way are already collaborating and generally most of them are doing it effectively.”
Perhaps one of the best indicators comes from last year’s SOLGM survey which asked all 78 local authorities to help provide a better understanding of how widely shared services and other joined-up arrangements exist within the sector. It drew responses from 35 councils.
Interestingly, 79 percent of those respondents said they were involved in more than six shared service arrangements. And 18 percent said they were in three to five arrangements.
The most common service areas for shared arrangements were administration, economic development, roading / land transportation, libraries and tourism.
SOLGM manager sector improvement Raymond Horan says his organisation was “quite surprised at the breadth and depth of services covered through shared arrangements” when the survey results came through.
Notwithstanding that lack of a definitive list, there are plenty of examples of how collaborative activities are already paying off for the sector. Waikato Regional Council chair Paula Southgate told delegates at this year’s LGNZ conference in Dunedin that when the Waikato region has spoken with one voice it’s been more than effective in winning government investment.
She cited as examples, $215 million of crown funding for land transport initiatives, $2 million for the Waikato Expressway, $13 million to support Fonterra to expand capacity at its Hamilton Crawford Street plant for an inland port and $81 million to reduce the amount of nitrogen leaking into Lake Taupo.
“That,” she pointed out, “is a sizeable amount of money in investment.”
Taking the stage minutes later, Waitomo District Council mayor Brian Hanna said collaboration can expand a region’s gains “in unexpected ways”.
He reckoned a total of $11 to $12 million had been saved in the region in the past three to five years.
That included about $2.5 million in insurance costs and $6.5 million in professional services delivery costs, while RATA – the Waikato Road Asset Technical Accord “which looks at all our asset management across our roading groups” – has delivered $350,000 savings in its initial stages “with potential to save millions annually”.
Sweep down south and examples of less dollar-specific, but similarly significant, runs on the board are also evident. Timaru District Council mayor Damon Odey says the Canterbury Mayoral Forum spanning nine district councils, the Christchurch City Council and Canterbury Regional Council, brings benefits equal to a “virtual unitary authority”.
“It’s all about the region’s mayors working collaboratively, all wearing the one sombrero.”
The wider region’s collective clout prompted Spark to fast-track its roll-out of 4G mobile data and broadband. “The roll-out was originally to take three to four years,” says Damon. “Now it’s happened in one year.”
Similarly, Dame Margaret Bazley – who until this year’s local body elections has chaired both Environment Canterbury and the Canterbury Mayoral Forum – says when the 11 leaders of the latter group make a request they are listened to.
The group, she says, is in “continuous dialogue” with Wellington and has brought “urgency to the debate” with central government.
Which begs the question, if such collaborative initiatives are so successful why aren’t there even more of them?
Waikato Regional Council CE Vaughan Payne concedes the model of working with a 24-member stakeholder group for the Waikato Healthy Rivers Wai Ora project is “resource hungry”.
“I anticipate that for the healthy rivers projects we will spend three times more than a traditional policy process.”
He adds, however, that “this single disadvantage of collaboration needs to be weighed up against the costs of not collaborating”. In particular, he says it must be balanced against three significant benefits.
Meanwhile, Waimakariri District Council CE Jim Palmer says the 11 South Island councils behind the Canterbury Regional Economic Development Strategy (CREDS) have had “absolutely no budget at all” for their work. “We’ve done it on the smell of an oily rag. Environment Canterbury provided the secretariat… and all the local authorities have contributed the time and effort of their senior staff to make everything happen.”
Collaborative processes got a good airing at the Conferenz Freshwater Management and Infrastructure Forum in Wellington earlier this year. As well as the many benefits, delegates also spoke of concerns about complex and messy processes, changing power dynamics and the need for compromise. (See our article “Pooling resources” on the Local Government Magazine website: bit.ly/Pooling_Resources).
At a personal level, working collaboratively means some mayors may need to let go of their egos. For some that’s not easy, as evinced by people vying behind the scenes for their name to be first on documents about how well they are all collaborating.
And then there are the usual wry remarks from council comms staff about how hard it can be for some mayors – used to the pomp and ceremony of their office – to work out how to get through doorways without colliding with other mayors who are also used to being first in line.
Similarly, there’s talk that some middle-ranking officers need to learn to share their personal fiefdoms with their peers in other local authorities.
Such issues, and a wealth of others, maybe explain why some of the earliest and most successful collaborative plays have been in what some people call the “easier” areas.
Bruce Robertson argues that collaborating on policy is one of the easier areas on which councils can join together as this “is more about the various partners aligning their approaches”.
Working together gets tricky when the parties attempt to do what he calls “collaboration in depth”. By that, he means things like core services, “generally through infrastructure assets being delivered collaboratively and in some way joined up”.
And this is the direction in which the proposed Amendment Act is pointing, through, for example, the creation of CCOs.
“The rub here is you can build a case for the long-term view that this will be better for the ratepayer in the future. But you need to deal with the individual issue of how this will affect the current ratepayer and the equity they’ve put in since the beginning… All of a sudden their cost of water goes up. So what’s their incentive to be in [such a new collaborative venture]?”
Collaboration is quite hard anyway, he says. “When it gets to where the Act is going – which is collaborating by combining service delivery while keeping individual autonomy – that’s a much more difficult proposition. It’s quite detailed and complex.”
Lawrence Yule says the sector has “not been too bad” at sharing the provision of procurement services – such as electricity or insurance. “But we’re pretty timid in terms of looking at how we might deliver large services which cost ratepayers a lot of money such as roading and waters.
(A charitable argument could be that perhaps the sector has also been pretty responsible in the way it has cut its teeth by starting work on items of less value.)
Lawrence points to big ticket initiatives such as the Waikato and Wellington water models but acknowledges such collaborations are not widespread.
“The sector is moving into that space,” he says. “The question for central and local government is whether that’s fast enough and, actually, fundamentally whether it makes a big difference to the costs of providing those services, or not. And there are various views on that.”
SOLGM’s Raymond Horan reckons we’ll see more shared services anyway, regardless of any new legislation.
“Let’s not forget there’s a signal [under section 17A of the Local Government Act 2002] that local authorities should be collaborating more,” he says. “And there’s a requirement for local authorities to assess how they deliver their services and whether or not things can be done more effectively.”
Those reviews have to be completed by August next year, he says.
He notes there are several reasons why it is harder to deliver infrastructure services – as opposed to procurement services, for example – through shared arrangements.
“Legislation doesn’t always support joint arrangements that well,” he says. “There are some issues around transport and shared services.
“There are also some political issues: there’s a perception that this is a kind of thin-edge-of-the-wedge step towards amalgamation.
“And there’s concern of a loss of local control: ie, councillor Jones being able to dictate when a certain pothole or road gets filled out.”
These are some of the harder issues, he says, and they’re also the ones that councils are grappling with as part of their service delivery reviews.
Meanwhile, over in the UK where austerity measures have bitten deep into the local government sector, sharing has taken on a whole other mien. Karen Thomas has been watching the gradual blending of senior management staff across a number of councils there.
“Several councils there now have a shared CE – ie, two councils, one CE,” she says. “And over time, some CEs have then blended their second tier teams.”
Numbers are still small, she says. There are over 400 councils in the UK and just 10 or so CEs are now working across two organisations.
Perhaps the most striking example is in East Suffolk where the Suffolk Coastal District Council and Waveney District Council now share one workforce. Although they remain separate independent sovereign councils, they provide shared services.
They started coming together in April 2008 when they first shared a chief executive. By October 2010, they had formed a single management team, progressing to a single staff structure, a joint intranet and, by March 2014, a symbolic joint email address.
The benefits of this arrangement include: savings and cost reductions; increased capacity and resilience; better procurement leverage and spending power; and a neat ‘geographic fit’ that they’re both part of the East Suffolk region.
Yet another example of collaborative activity in the UK shows central government redistributing power and funding down to local authorities. Under the UK government’s devolution policy, councils can put together proposals to take over responsibility for services such as healthcare, franchising bus services, or education and training. The rub here is that the government is very clear it’s not interested in devolving to a single council. It’s got to be a group, says Karen.
Clearly that’s a million miles away from what’s happening here in New Zealand. Still, Karen says whatever happens with the Amendment Bill, SOLGM will continue to encourage best practice among councils. And that will include collaborative activities and even more formal shared services.
Wai Ora: Why not?
The Waikato Healthy Rivers Wai Ora project helps support the health of the Waikato and Waipa rivers. It is driven by a 24-member stakeholder group representing all catchment interests.
Waikato Regional Council CE Vaughan Payne says group members “work to ensure the rivers and lakes are safe to swim in, you can take food from them, the waters can support healthy biodiversity, and can provide for social, economic and cultural wellbeing. That’s no small task.”
He concedes a collaborative approach on water policy can be “resource-hungry”. This is balanced against three plus-points.
1 Ownership. “Improving water quality requires ownership at an industry and landowner level. This is because solutions effectively require long-term behaviour changes from those causing the water pollution – industry and landowners. Collaborative processes allow ownership of both the problem and the solution to occur. And as a consequence, we are forever hopeful we will avoid lengthy court challenges.”
2 Ability to handle complexity. “Like any complex issue… we are trying to maximise certainty and community agreement. So we have a technical leadership group supporting a collaborative stakeholder group.”
3 Confidence. “True collaboration is politically safe for councils. The community holds the pen. … Around the Healthy Rivers table, stakeholders joke that when the sectors hold the pen, they point the gun at each other. … Council is no longer the target but rather the facilitator of solutions.”
The Canterbury Mayoral Forum comprises the chair of Canterbury Regional Council, the mayor of Christchurch City Council and the mayors of the district councils of Ashburton, Hurunui, Kaikoura, Mackenzie, Selwyn, Timaru, Waimakariri, Waimate and Waitaki.
It’s the embodiment of a triennial agreement between the various councils, and one that Timaru mayor Damon Odey says carries huge weight in getting stuff done.
“Digital connectivity is key for our districts,” he says, “and something we knew we had to work on. But I knew if I’d rung up Spark and said, ‘Hi, it’s Damon from Timaru’, they’d have said, ‘Who’s Damon? Where’s Timaru?’”
So when Damon approached Spark with the backing of nine other mayors and [then] regional council chair Dame Margaret Bazley, he got Spark’s listening ears.
Spark agreed to fast-track rural rollout of its 4G mobile data and broadband. There would be no cost to ratepayers.
“This was the first time Spark had partnered in this way,” says Damon. “The government set a target to have download speeds of 50 megabits per second by 2025. By this December we’ll be reaching speeds of up to 100 megabits per second.
“By the end of this year the $14 million investment from Spark to bring the 4G mobile coverage – including 70 cell sites – is going to connect 95 percent of the whole of Canterbury. That’s great for the places where we all live and work.”
Who’s sharing what?
From a SOLGM survey on local government shared services at the end of 2015:
- Two thirds of respondents cited there were no barriers to shared service arrangements. The majority of respondents who had encountered a barrier, found it in the operational aspect of a shared service arrangement, rather than the establishment of an arrangement.
- Some of the barriers encountered were legislative. Two respondents noted barriers in the Rates Rebate Act, while two noted NZTA regulations, and two cited unspecified issues with the Local Government Act.
- All respondents were involved in a shared service arrangement with other councils, with 53 percent also involved with a company. Similarly, 85 percent used a contract for service as the form of shared service arrangement.
- Seventy three percent of respondents had used a shared arrangement for administrative services, 61 percent for economic development, 52 percent for roading / land transportation, 48 percent for libraries and 48 percent for tourism.
- The most common form of shared arrangement was through a contract for service, with 85 percent of respondents involved in such an initiative. This was followed with 71 percent involved in a joint committee, 50 percent in a jointly owned company, and 44 percent in a joint venture. A smaller proportion of respondents had a memorandum of understanding (12 percent), and one respondent noted their form of shared arrangement was a trust board. SOLGM said it is important to note that CCOs are not a necessary condition in establishing a shared service arrangement.
More details on this SOLGM survey are contained as an appendix to SOLGM’s Better Local Services submission on the Local Government Act 2002 Amendment Bill (No 2) 2016. bit.ly/SOLGM_Better_Local_Services
This article was first published in the October 2016 issue of NZ Local Government Magazine.