Gary Murphy, General Manager of Lismore City Council in Australia, recently visited England to see how councils are weathering the austerity storm, and whether any lessons learnt could be applied to local government in Australia.
The most recent journey towards sustainable local government in New South Wales, Australia, began in August 2011 when councils from throughout NSW came together for Destination 2036 to discuss their future direction over the next 25 years.
The NSW Government established the Independent Local Government Review Panel and a Local Government Acts Taskforce which commissioned several reports and put forward their recommendations to the government in October 2013. A year later, the government responded to the 65 recommendations and delivered a reform package called ‘Fit for the Future’.
All councils had to submit either a merger proposal or an improvement plan demonstrating how they would meet seven sustainability performance measures by 2025. Since this time, much of the focus has been on forced mergers with resulting court cases and the government backing down on some Sydney mergers and totally withdrawing the regional council mergers.
However, the improvement plans are still required to be met and with the Office of the Auditor General now conducting council audits, it is likely there will be greater scrutiny and accountability placed upon councils to deliver on the promises made in their improvement plans.
One of the most pressing issues facing NSW councils is addressing their infrastructure backlogs. For many councils, they have not adequately accounted for nor funded depreciation of their assets in the past. Having to now demonstrate that they are sustainable, councils are having to find several million dollars in extra revenue each year to adequately fund this backlog.
The improvement plan for my council required us to look first for savings and efficiencies. In our first year we found $1.2 million through voluntary savings. This current year we are projected to save a further $2.5 million. We are systematically reviewing all of our services to determine whether we are operating efficiently and providing the services our community wants at a level of service they expect.
Our last resort is a Special Rate Variation of $3 million per year to be spent on our roads. Our infrastructure backlog is $90 million. This $3 million will go some way to tackling this but we still have a gap we need to close.
The UK austerity measures are well-known in Australia and I was keen to see how councils have responded to this challenge. With this in mind, I was grateful my council agreed to send me to the UK to see for myself how the sector is faring. I visited Coventry, Birmingham, Wolverhampton, Manchester, Greater Manchester and Aylesbury councils and also had discussions with Kim Ryley (formerly CEO of Cheshire East Borough Council), Sarah Pickup (LGA), Jonathan CarrWest (LGiU) and Paul O’Brien (APSE).
Paul gave some examples of the innovative thinking councils were employing such as one council that charges cruise ships handsomely to offload their waste and then uses it as fuel for their bioenergy plant. This generated not just energy but several hundred thousand pounds in additional revenue.
This for me was the greatest learning. Councils in my view have been traditionally conservative, risk averse and very reluctant to enter the commercial realm for fear of being told to stick to their knitting or getting a backlash from competing private sector interests.