The Australian Experience of Municipal Amalgamation: Asking the Citizenry and Exploring the Implications

Debate over municipal amalgamations in Australian continues to dominate local government reform agendas, with the putative need to achieve economies of scale and scope consistently set against anti‐amalgamation arguments designed to preserve extant communities. Following from an examination of recent episodes of consolidation in Australia, this paper reports on citizens' attitudes to amalgamation garnered from a national survey of 2,006 individuals. We found that generally, citizens are ambivalent toward amalgamation, although attitudes were influenced by particular demographic characteristics and attitudes to representation, belonging, service delivery requirements and the costs thereof. The results suggest that, away from the local government sector itself, structural reform may not be the vexatious issue it is often portrayed as. The implications of this are explored here.     

An Analysis of the Joint Board or County Model as the Structural Basis for Effective Australian Local Governance

Australian policy‐makers continue to rely on municipal amalgamation as the main engine of structural reform in local government, despite strong evidence that it diminishes participation and representation without improving service efficiency. Several promising, but neglected alternative models of structural reform have been developed, including ad hoc resource sharing models, Regional Organisations of Councils, virtual local government, and agency models. In an encouraging response to the recent policy of enforced council amalgamations in NSW, the Shires Association of NSW (2004) has recently proposed a ‘Joint Board model’ of local governance and invited comment on this model. This article takes up this challenge and seeks to place the Joint Board model in conceptual context and evaluate its characteristics and simulated cost savings.     

Shared Services in Australian Local Government: Rationale, Alternative Models and Empirical Evidence

Widespread enthusiasm amongst Australian policy elites for structural reform in local government has evaporated as disappointing outcomes of council amalgamation programs became evident. As a consequence, emphasis has now shifted towards shared serviced models as a means of enhancing service provision and reducing costs. However, a disturbing feature of the current debate on shared services has been the absence of a well-articulated economic and political rationale for this form of service delivery, a lack of analysis of alternative models of shared service provision and a neglect of available empirical evidence. This article seeks to remedy these deficiencies by considering the analytical foundations of shared local services, conducting a review of alternative models as vehicles for shared services and evaluating available empirical evidence.     

Keeping It In‐House: Households Versus Population as Alternative Proxies for Local Government Output

Forced amalgamation has been used as a policy instrument in local government by numerous regulatory authorities across the world. A common presumption underlying municipal mergers holds that larger local councils will experience greater economies of scale. However, the empirical evidence on this question is mixed. Part of the reason for this could lie in the frequent use of population as a proxy for local government output in the empirical literature. This paper examines the use of alternative proxies, particularly the number of households but also the addition of business unit data. We demonstrate that household data represents a more accurate proxy of Australian local government output compared to population size. In addition, the paper employs experimental data, conceptual considerations on population, and household dynamics to establish that the number of households represents the most appropriate measure of local government size for both empirical and public policy purposes.     

Would Bigger Councils Yield Scale Economies in the Greater Perth Metropolitan Region? A Critique of the Metropolitan Local Government Review for Perth Local Government

Forced amalgamation is a ubiquitous feature of Australian local government reform – compulsory council consolidation programs have occurred in all states and territories, with the sole exception of Western Australia. However, the Final Report of the Metropolitan Local Government – released in October 2012 – called for a reduction of about 60 per cent of the local authorities in the Greater Perth metropolitan area. The Western Australian Government responded by announcing that the number of Perth councils will fall from 30 to 14 from 1 July 2015. The Final Report recommended amalgamation on seven main counts, including scale economies. However, apart from citing work on Tasmania by commercial consultants Deloitte Access Economics (DAE) (2011), no econometric evidence was produced in support of claims on scale economies. This paper seeks to remedy this deficiency by estimating a number of econometric models on the impact of amalgamation on Perth local government. The results of our empirical modelling suggest that scale economies, cost savings and other pecuniary gains are largely illusory. Indeed, only two of the ten main local government functions provide evidence to suggest potential economies of scale.     

A Critical Evaluation of Virtual Local Government in Australia

The vigorous debate surrounding local government amalgamation in Australia remains unresolved. In an attempt to break the current stalemate Percy Allan (2001) has proposed a model of 'virtual local government' that seeks to combine the service appropriateness and effectiveness purportedly associated with demographically small councils with the service efficiency of large municipalities. This paper attempts to place his model in the context of the literature on the theory of public sector policy reform. It then goes on to examine virtual local government in the light of new institutional economics, public choice theory and the characteristics of Australian local government.     

Efficiency Measurement in Australian Local Government: The Case of New South Wales Municipal Water Services

Australian local government has experienced a series of reforms directed at increasing economic efficiency. An important element in the reform program has been the development of a number of partial indicators of local government service delivery in the states and territories. This paper attempts to augment this literature on performance measurement in Australian local government by using data envelopment analysis (DEA) with holistic indices of allocative and technical efficiency in New South Wales (NSW) municipal water services. It also seeks to incorporate qualitative indicators into efficiency measures. “Best-practice” councils are identified and the underlying causes of municipal water service efficiency are analyzed.     

NSW local government reform: Council amalgamation,antagonism, and resistance

The New South Wales State Government announced its local government strategic reform programme Fit for the Future in 2014. At the centre of the plan was the desire to reduce the number of local government areas. Opponents mobilised various resistance strategies to challenge amalgamation. However, the initial efforts to resist amalgamation failed but opponents got success in opposing amalgamation via the legal system. As such, the New South Wales State Government was forced to abandon its plans to amalgamate some regional and metropolitan councils in response to community opposition and resistance. Despite a growing body of existing literature, to date, the analyses of local government reform fail to examine the rationale and strategies of community opposition. To examine the public participation, community opposition, and resistance, this paper draws on the research that pertains to the proposed merger of the Ryde, Lane Cove, and Hunters Hill councils.     

Who ‘marries’ whom? The influence of societal connectedness,economic and political homogeneity,and population size on jurisdictional consolidations

For decades, political scientists have been asking how political jurisdictions are formed and reshaped. Nevertheless, studies of local government jurisdictional formation are few and often plagued with endogeneity since the formation of jurisdictions cannot be separated from sorting effects. In this article, the unique case of the Danish structural reform is utilised to overcome endogeneity due to migration‐related sorting by studying patterns of municipal amalgamations. In the recent Danish reform, 239 of 271 municipal entities were forced to amalgamate simultaneously, while who actually amalgamated with whom was left entirely to negotiations between the respective municipalities. Applying logistical regression to a dataset where the unit of analysis is dyads of municipalities allows the construction of a relational model for estimating the effect of different political and societal variables on the likelihood of amalgamation. Societal connectedness, population size and geography are important predictors of amalgamation patterns, while political and economic homogeneity between municipalities does not appear to matter much.     

Introduction — Building Local Government

In this and the last issue, the Australian Journal of Public Administration has profiled issues of current importance to Australian local/regional government. Contributors to Building Local Government looked at organisational change, performance measurement, leadership and social–capital–building roles in local government. Future of Regionalism now focuses on local and subnational government generally, in the financial, administrative and constitutional context. A major trigger for this focus is the present inquiry of the Commonwealth House of Representatives Standing Committee on Economics, Finance and Public Administration into the financial position of local government.     

From Convergence to Divergence: Reforming Australian Local Government

The article maps local government reform in the six Australian states over the last decade. It identifies an earlier phase of reform that focused primarily on redefining the roles and relationships within local government, especially between state and local governments, principally through the reform of the state local government Acts. As state reform agendas have shifted more to focus on managerial improvement, significant differences between local government reforms between states have emerged, in focus, process and outcomes. These differences are such that the role of local government itself has been refocused in several states away from the traditional local democracy values that have for so long underpinned this third sphere of government.     

The Debate on Australian Federalism: Local Government Financial Interrelationships with State and Commonwealth Governments

The nascent debate on Australian federalism has hitherto focused almost entirely on Commonwealth-state interrelationships to the virtual exclusion of local government. Since Australian local government employs around 156,000 people and spends in excess of $10 billion this neglect is unfortunate. In an effort to at least partly remedy this oversight, the present paper seeks to assess various unsettled questions in local government financial relationships with both Commonwealth and state governments, especially the issue of financial assistance grants and their efficiency consequences.     

Local Government in Tasmania: Reform and Restructuring

Tasmania has a long history of failed attempts at restructuring local government boundaries yet managed a major reform process of 'modernisation' between 1990 and 1993 that incorporated major changes to council operations together with a restructuring of boundaries and a reduction from 46 to 29 councils. This process can be compared with a recent attempt to reduce further the number of local governments. In April 1997 the Liberal Premier announced reforms ('Directions for Tasmania') that led to a further reduction in the number of councils. This process collapsed following legal challenges and the proroguing of parliament prior to the 1998 state election. The defeat of the Liberal government saw the abandonment of the proposed amalgamations and establishment of 'partnerships' between the new ALP state government and councils. This paper compares the 1990–93 and 1997–98 reform processes and evaluates the outcomes of the amalgamations in 1990–93. It argues that the success of amalgamation and reform in local government has been strongly influenced by the degree of local government involvement and support in the reform process, lessons that have wider application.     

From state paternalism to neoliberalism in Australian rural policy: Perspectives from the Western Australian wheatbelt

For much of this century, the rural policies of Australian governments were directed at providing a viable social and economic base for rural communities and country towns. Policies which provided the conditions for stable growth in the agricultural economy, together with equitable levels of access to services such as schools, hospitals and public housing, were seen as instrumental in the development of stable rural communities. More recently, however, the process of global economic restructuring, agricultural adjustment, farm amalgamation and rapid technological change, have contributed to the declining socio‐economic viability of many rural areas. This pattern of decline has been compounded over recent years by the emergence of state and federal government policies based upon the principles of ‘neoliberalism’. The emergence of this approach to rural policy has meant that state and federal governments have, increasingly, withdrawn from effective regional development strategies, rationalised the levels of public service provision, and devolved much of the responsibility for community well‐being to the local level. This paper critically reviews the changing governmental approaches to rural development, and reflects upon some of the outcomes of these policy changes in the wheatbelt of Western Australia.     

Party politicisation of local councils: Cultural or institutional explanations for trends in Denmark, 1966–2005

Local government party systems are not necessarily copies of the national party system. In many countries, local party systems have come to resemble the national one more and more – a process Rokkan termed ‘party politicisation’. The traditional expectation has been that the take‐over of local politics by political parties, through a gradual process of societal modernisation, would eventually be complete. More recently, however, it has been suggested that reorganisations of the institutional set‐up – that is, amalgamations of municipalities – could entail developments in the degree of local party system nationalisation. This article investigates cultural and institutional explanations for party politicisation by analysing the Danish case from 1966 to 2005 – a period that witnessed both major amalgamation reforms and periods of stability in the local government structure. The data suggest that dramatic party politicisation does not lend itself to cultural explanations, but originates exclusively from changes in the institutional set‐up. Party politicisation is not a gradual process, but comes – at least in Denmark – in leaps coinciding with major reorganisations of the local government structure.     

LOCAL GOVERNMENTS AS INNOVATORS*

Abstract: This article opens with a non-Australian example of innovation in local government. Next, attention is devoted to the concept and definition of “innovation”—necessary because the word has been used in many different and often confusing ways. Some illustrations of overseas research work on local government innovation are given. The paper then considers what is currently known about innovative practices in Australian local government management. It concludes by exploring the bases of innovative managerial activity and suggesting ways in which the capacity to innovate might be enhanced.     

Is Biggest Best? A Comparative Analysis of the Financial Viability of the Brisbane City Council

Structural reform through forced mergers has been a dominant feature of Australian local government for decades. Advocates of compulsory consolidation contend that larger municipalities perform better across a wide range of attributes, including financial sustainability. Although empirical scholars of local government have invested considerable effort into investigating these claims, no one has yet examined the performance of Brisbane City Council against other local authorities, despite the fact that it is by far the largest council in Australia. This paper seeks to remedy this neglect by comparing Brisbane with Sydney City Council, an average of six southeast Queensland councils and an average of 10 metropolitan New South Wales councils against four measures of financial performance over the period 2008–2011.     

Same Governance,Different Day: Does Metropolitan Reorganization Make a Difference?

This commentary focuses on three points related to the debate about urban governmental restructuring: existing conflicts in the literature regarding the outcomes of local government consolidation; insights about consolidation based on an assessment of the amalgamation of twelve municipal units creating the new city of Ottawa; and, a discussion of a variety of methodological and political factors that may well account for the continuing inconsistency in academic assessments of structural change in local government. One possible explanation for the latter conflict is that governmental reorganization does not really make things substantially different in terms of taxes and services, that is, those outcomes most directly experienced by the average citizen. Over the long term other forces, such as intergovernmental relations and the economy, will tend to negate most of the initial effects of change. While there are likely to be winners and losers related to power in government or regime, it will be argued that in large part, for most citizens, governmental reorganization produces the same governance on a different day.     

Learning from Experience? Ottawa as a Cautionary Tale of Reforming Urban Government

This article examines the saga of local government restructuring in Canada's capital city. Specifically, it analyzes the interplay between provincial and local agendas for local government reform over many years, which culminated in provincial legislation and a one-year transition process to establish one municipality for the Ottawa city region. In doing so, the article addresses the extent to which the Ottawa transition demonstrates learning from other major urban restructuring efforts and the extent to which the Ottawa case provides new insights for future local government reform efforts. Key conclusions are that the key motivation for provincially initiated reform—cost saving through simplification of the local government structure in Ottawa—does not fully coincide with local needs and interests. Furthermore, the promise of financial savings has proven difficult to realize as a result of the local politics surrounding existing municipal debt and unresolved human resource management costs. Instead, future benefits from the amalgamation may lie in improved capacity to manage physical development, environmental sustainability, and cultural diversity.     

Community not the Councillors: A Study of Commitment of Australian Senior Council Officers Working under a Politicised Employment Relationship

Council officers as public managers are expected to work for the community. Yet, it has been argued that council officers working under a politicised employment relationship are likely to be more committed to the elected councillors than to the community. This proposition has been examined through a survey of senior council officers across Australia and the results are presented in this article. This study develops an analytical approach which combines for the first time the multi-focus and the multiple bases of managerial commitment approaches, applies this to the case of Australian local government managers and finds that although most senior council officers perceive that their employment is politicised they remain committed to the community. Based upon these findings, it is argued that a conceptual framework utilising a combined multi-focus and multiple bases approach is more appropriate to the study of commitment of local government managers and to managers in the public sector in general than the use of either approach alone.