Future of Local Government Summit 3: Accountability that Works

1
Future of Local Government Summit
3Accountability that Works

• Peter McKinlay
• Local Government Centre
• Auckland

2
The Brief From FOLG 2

• A sector accountability framework that identifies
  a model for local councils accountability to
  their communities.

3
The New Context for Local Government

• Globalisation we cannot ignore the world but
  the world can ignore us.
• Place shaping building on the unique qualities
  of local and regional places as the basis for
  sustainable economic and social development.
• Our ageing population an opportunity or a
  threat?

4
The changing role for local government

• The emphasis on promoting economic, cultural,
  social and economic well-being.
• Reflects major trends internationally including
• Growing powerlessness of state and federal
  governments to control or shape what happens at
  the local/regional level.
• The increased complexity and interconnectedness
  of the challenges we face.
• Growing demands from citizens to influence,
  indeed control, what happens to them and their
  local environment.
• Good local governments are now at the centre of
  direction setting for their communities.

5
Accountability Whats It About?

• To whom? State government? The federal
  government? The auditors? The community? (And
  who is the community?)
• For what? Financial prudence? A clean audit
  report? Keeping the rates down? Good and timely
  asset management? Promoting community well-being?
• How? Four yearly elections? Audited financial
  accounts? a detailed annual report on council
  activity? A process of dialogue with the
  community or communities?

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The MAV Answers

• Accountability is to our community or
  communities.
• We are accountable for (1) serving the community
  doing what it wants done within our powers and
  resources (2) good stewardship of assets and of
  financial resources and (3) building trust
  between council and community both at elected
  member and at officer level.
• We should be accountable through open,
  transparent and collaborative processes. Audited
  accounts and annual reports matter, but dialogue
  with the community matters more.

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Electoral Accountability its just not enough

• Once the standard view still important but
  discredited as a good means of delivering
  accountability when the citizen focus is on the
  quality of individual services and activities .
• How does the citizen hold the Council accountable
  through a vote, when he or she likes some bits,
  dislikes others, is ambivalent for the remainder
  and does not really know how Ward councillors
  performed anyway?

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The Three Stages of Accountability (1)

• We spent the money properly" basically,
  accountability is an untagged audit report.
• This is the classic accountability of we do
  things to them the traditional model of local
  government as it used to be.

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The Three Stages of Accountability (2)

• We not only spent the money properly, but
  efficiently and effectively in terms of the
  individual service outcomes citizens (customers?)
  received" accountability is a good score in a
  customer satisfaction survey.
• This is the accountability of new public
  management local governments are just like
  businesses. We study our markets and do things
  for them.

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The Three Stages of Accountability (3)

• And we are also effective in working with our
  communities to create the environments (social,
  economic, cultural and environmental) that they
  want".
• This is the accountability of working with
  communities, understanding their priorities, and
  delivering on those within available resources.
  We do things with them.
• The first two stages are backward looking
  retrospective accountability. The third stage is
  forward looking prospective accountability a
  mix of creating and facilitating the communitys
  future.

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What Have We Done Since FOLG 2?

• Developed a vision for local government
  accountability and a test for its achievement.
• Outlined the principles and characteristics of
  new local government accountability.
• Worked out what this will actually mean in
  practice how we do it.
• Taken Victorian local government as a pilot
  case.

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The Vision and Test

• Vision Strong independent local government based
  on accountability to its communities for
  improving community well-being.
• Test Trust in Council degrees of freedom (to
  act free of interference?)

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Principles and Characteristics

• Sustainability (ECSE) present and future.
• Strong leadership vision-based community
  governance.
• Committed to community engagement.
• Facilitative, collaborative, empowering.
• Prospective, data based, consistent.
• Transparency.
• Flexible, innovative, context aware.
• Community has the information it needs (well
  informed community).
• Clear evidence-based value proposition.

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The Way Ahead Three Different Models

• Victoria Detailed accrual based financial
  planning and reporting cycle with a four-year
  horizon. Limited statutory requirement for
  community involvement.
• New Zealand. Detailed accrual based financial
  planning and reporting cycle with a 10-year
  horizon. Firmly based on community involvement
  beginning with community outcomes as basis for
  planning and supported by audit sign off.
• England. Primarily a purchase model with
  accountability designed around satisfying central
  government as purchaser (with central government
  in turn concerned about customer satisfaction).

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What direction for Victoria? What would satisfy
our vision and principles?

• The status quo, with a focus on improving the
  quality of financial management?
• A statute driven shift to a different form of
  accountability?
• A voluntary, good practice and fit for purpose
  evolution controlled by local government itself?

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Lessons from experience

• New Zealand has had 20 years of successive
  governments rewriting accountability frameworks.
  The ultimate destination looks good, but the
  journey has been long and costly.
• England claims good progress in reducing the cost
  of local government services and improving
  efficiency. Some relaxation with 1200 KPIs being
  replaced by 200! Observers wonder whether
  pervasive government control has killed local
  governments ability to innovate.

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Statutory versus Voluntary Evolution (1)

• Statutory. Possible pluses - the rules may be
  clear, the disciplines difficult to avoid (cf the
  audit sign off on New Zealand LTCCPs),
  responsibilities defined and timetables known.
• Statutory. Possible minuses one size fits
  all, the rules may not be clear, forced
  compliance may be compliance in form rather than
  substance.

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Statutory versus Voluntary Evolution (2)

• Voluntary evolution. Possible pluses fit for
  purpose, a greater level of commitment, a sense
  of being in control.
• Voluntary evolution. Possible minuses no
  agreed standards, failure to implement, progress
  patchy across the sector, good performance at
  risk of government intervention to manage poor
  performance (governments do not legislate
  accountability arrangements for some only of a
  sector).

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The Current Process

• Council Plan
• To be reviewed, with public consultation process,
  at least every four years (after the council
  election)
• Strategic objectives
• Strategies
• For achieving objectives over at least next four
  years. Strategic Performance Indicators
• Strategic Resource Plan

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Voluntary Evolution Building on the Council
Plan(1)

• The first question where do strategic objectives
  and strategies come from?
• The first answer from community-based plans
  developed to spell out what communities want to
  achieve.

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Voluntary Evolution Building on the Council Plan
(2)

• The second question does the Council adopt
  everything in each communitys plan?
• The second answer No. The communitys plan
  should be holistic, covering the full range of
  the communitys aspirations. The Council role
  will be delivering on some, advocating for
  others, and leaving others totally over to the
  community to action.

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Voluntary Evolution Building on the Council Plan
(3)

• Councils remain in control of their own
  decision-making and responsible for allocating
  council resources.
• What has changed is how they do this and the
  nature of their accountability.
• They are working with their communities, not on
  their communities.

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Building on the Council plan is there one right
way? (1)

• There are basic practices which all councils will
  need to follow. They include
• A lead role working with the community as it
  identifies its priorities, often acting as
  facilitator of the communitys processes.
• The community needs good information. This means
  the council being clear about what it currently
  delivers including levels of service, and current
  and future costs, both operating and capital.
  These set the context for decisions about new or
  changed activities, including stopping things.
• It is for the community rather than the Council
  to define what the communitys priorities are.

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Building on the Council plan is there one right
way?(2)

• It is the councils job to listen carefully to
  the community and then decide what to do about
  each of the communitys priorities.
• These decisions feed through into the Council
  plan, including strategic objectives and
  strategies.
• The councils options range from adopting
  priorities as part of its core activity, to
  working in partnership with other potential
  providers (or the community itself), to acting as
  advocate, to leaving it over to the community to
  act on it councils cannot and should not try to
  do everything.
• Finally, as at present, the plan goes out for
  public consultation and community feedback before
  the council finally signs off on it.

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Building on the Council Plan is there one right
way? (3)

• Councils and communities differ in many ways.
  The best approach to community planning in one
  Council or community may be quite different from
  the best approach in another.
• The basic principle remains the same.
  Prospective accountability means working with and
  listening to the councils community or
  communities, choosing the best means to suit the
  characteristics of your particular community or
  communities.
• Contrast Golden Plains local level community
  planning process across some 20 communities with
  Port Philips combination of town hall meeting
  and interactive website.

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Next steps

• The WorkStream established to respond to the
  brief from FOLG2 has completed its work.
• It is now over to MAV and other local government
  associations across Australia to assess what has
  come out of this process and decide how to carry
  it forward.
• This is a joint task. The greater the
  collaboration amongst different local government
  associations, the greater the gain for each
  associations members.

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Prospective accountability the ultimate
objective.

• Prospective accountability is the essential
  condition for strong independent local
  government.
• Winning the support of your communities is the
  best way of winning the support of other levels
  of government and of other key stakeholders.
• Doing it well is a major culture shift for local
  government few if any councils have yet got
  there but many have started the journey.
• Dont even think of failure. That is simply to
  hand local government back to the control of
  higher tiers of government.