Forced Decisions on Scale….

Councils across NSW are considering their options after a government-commissioned report found nearly two thirds were “unfit”, marking them as possible candidates for forced mergers.

The Independent Pricing and Regulatory Tribunal (Ipart) recently released a report that gave the thumbs-up to only 52 of 139 proposals submitted by 144 local councils, including four merger proposals covering nine current councils.

Most councils that want to continue as stand-alone operators passed the financial criteria but fell down on scale or capacity, and the report found amalgamations could deliver $2bn in savings over the next 20 years.

The issue facing Local Councils in NSW is one that has faced many small businesses over the decades, especially those that are specialised or boutique in either what or how they do their work. The mere fact that name “Local” appears in the front of “Council’’ implies that scale will always be an issue. Why then would one of the essential criteria for ‘’fitness’’ be related to a criterion that would be almost impossible to achieve? Removing scepticism from the equation, it is more likely to relate to the fundamental difficulty of imposing an economic rationale in a community concept. There is often a mismatch between meeting the specific needs at a local level, with all the specificities and nuances associated with people, and, meeting overarching financial imperatives, many of which can only be achieved through scale.

In cases were scaled has been ‘imposed’, there has been mixed outcomes at a community level, yet the trend continues. In Wales, there is a proposal to reduce the number of councils from twenty-two to eight or nine and what has been cited as the potential outcome? It would cut the cost of local government. In fact this proposal to bring back bigger councils is broadly similar to pre-1996 arrangements, so certainly is not new. Opposition is not new either - the cross-party Williams Commission advised against an eight-council structure, in January 2014, warning many gains from mergers would be "jeopardised or lost". The report stated: "Such proposals would mean creating local authority areas ……it would be very difficult to meet multiple diverse local needs effectively, or to maintain fair democratic representation within such areas."

The additional misnomer is that neighbouring councils or LGAs are demographically similar; have the same needs and expectations and want the same things. They most often don’t because of their specificity. In any forced arrangement of the kind being proposed, there will be a conflict of culture which by definition consists of “long-standing, largely implicit shared values, beliefs, and assumptions that influence behaviour, attitudes, and meaning”. This definition has several important implications: Culture is implicit. People who share in a culture find their culture challenging to recognise. The most insightful cultural observers often are outsiders, because cultural givens are not implicit to them. Culture influences how people behave and how people understand their own actions. As a result, culturally influenced beliefs and actions feel right to people, even while their implicit underpinnings make it difficult for those people to understand why they act the way they do or why other ways of acting might also be appropriate. Culture is resilient. Its elements are long-standing. The resilience of culture is supported by culture being implicit. It is difficult for people to recognise their own culture and how it exerts an influence on them. The staying power of culture is that it feels right to people; new cultural values that are imposed on people seldom replace their underlying values and beliefs in the long run.

It is very likely that this culture currently exists amongst Local Councils who will resist the change. Ironically, it is likely to be more evident and dominant if they accept it.