Service Delivery & Infrastructure

Transcription

1 Background Paper Service Delivery & Infrastructure This Paper has been prepared in response to the Independent Review s Terms of Reference, based on available research and government information. The purpose of this Paper is to present background information for further review. It should not be interpreted as a statement of the Panel s views or an indication of likely recommendations December 2012

2 Table of contents 1. Purpose of this paper 3 2. Links with other background papers 3 3. Service and infrastructure delivery in NSW local government 4-10 The current landscape The legislative framework for local government service and infrastructure delivery Integrated Planning and Reporting Framework (IPR) Service and infrastructure delivery 4. Service delivery issues and options Local government service delivery performance Local government service costs Regulatory functions Remote communities in Western NSW The expanding role of local government in service delivery The role of ROCS and collaborative governance 5. Appendices Appendix 1. Legislation Impacting on Local Government Service Delivery Appendix 2. Mechanisms for the delivery of services and infrastructure Appendix 3. Services provided by Regional Organisations of Councils (ROCS) Appendix 4. NSW Road Management Arrangements 2

3 Background to Service Delivery 1. Purpose of this paper The terms of reference for the Independent Local Government Review Panel require it to consider the ability of local government to deliver services and infrastructure efficiently, effectively and in a timely manner. This Briefing Paper seeks to describe and identify a range of issues including: The current landscape of service and infrastructure delivery across NSW local government including: - The legislative framework - Integrated Planning and Reporting - The role of local government in the delivery of services and infrastructure Issues and options for strengthening local government service and infrastructure delivery. 2. Links with other briefing papers The emphasis of this Paper is on the services and infrastructure councils currently provide for their local communities. Other Briefing Papers, which explore a range of local government issues, also need to be considered in the context of local government s ability to deliver services and infrastructure. These papers include: Ability of local government to support current and future local community Needs Local representation and decision making Financial Sustainability 3

4 Service and Infrastructure Delivery 3. Service and infrastructure delivery in NSW local government The current landscape Local government service provision has transformed significantly over recent decades, with councils now moving beyond a narrow emphasis on roads, rates and rubbish towards broader objectives to promote the social, economic, environmental, and cultural wellbeing of communities. At the same time community expectations of local government have increased while other levels of government have devolved various functions. The overall effect is that councils must provide a greater range of services while endeavouring to meet higher standards. 1 Councils plan for and deliver services under the NSW Integrated Planning and Reporting Framework, which is specified by the NSW Local Government Act Although the actual services that each council provides under the framework can vary from council to council, depending on local area priorities, they generally fall within three main categories: Core services; services that are delivered within a competitive market, and gap services provided as a result of unmet need. Councils also provide a range of infrastructure development and maintenance services. The diagram below identifies each of the key components of local government service and infrastructure delivery. These components are further explored on the following pages. Legislative Framework Integrated Planning and Reporting Framework Services Categories: Planning for economic and community development Planning for sustainable land use Protecting the environment Safeguarding public health and safety Providing community services Infrastructure Examples: Roads and bridges Kerb and guttering Sporting facilities Libraries Public swimming pools Core Competition Market Gap Infrastructure Development Infrastructure Maintenance 1. Service Delivery Reviews in Australian Local Government, Australian Centre of Excellence for Local Government July 2012: 4

5 Legislative frameworks The Local Government Act 1993 (the Act) and the Local Government (General) Regulation 2005 (the Regulation) provide the legal framework and principles which underpin the delivery of services and infrastructure by NSW local government. Under this legislative framework, councils are required / enabled to: Consult with and facilitate effective participation of local communities Raise and be accountable for revenue Provide goods, services and facilities Carry out activities appropriate to the current and future needs of local communities and of the wider public Provide a service on behalf of another sphere of government Properly manage the environment of the area Although regulatory functions are prescribed within this framework, core services to be provided by a council are not defined. Rather, the framework enables councils to provide a range of services and infrastructure within the following legislative parameters: The Council s Charter (Section 8 of the Act) Integrated Planning and Reporting Framework (IPR) - which includes the Community Strategic Plan, Delivery Program, and Operational Plan (Chapter 13 Part 2 of the Act) Specific planning and regulatory functions as conferred by other legislation. Councils have specific regulatory functions and responsibilities under other Commonwealth and NSW legislation (over 120 Acts) which include: Companion Animals Act companion animal registration and control Swimming Pools Act restriction of access to swimming pools, and provision of community education Environmental Planning and Assessment Act Local Environmental Plans (LEP) /development / building control and regulation. Appendix 1 provides information regarding Acts and Regulations relevant to local government. Note: The NSW Government is currently undertaking a number of initiatives which impact on the legislative framework for local government. These include: Review of the Environmental Planning and Assessment Act Consideration of the delegation of functions to councils under the Plumbing and Drainage Act 2011 A review of recycled water legislation Integrated Planning and Reporting (IPR) IPR requires that the decisions a council makes about service delivery are driven by a Community Strategic Plan (CSP) which is developed by council in consultation with the community. The CSP sets the directions and priorities of the community, and is used to develop council's Delivery Program (what will be achieved) and Operational Plan (how this will be achieved). In implementing the IPR Framework, each council needs to: Balance the competing needs and interests of stakeholders Align decision making with State Government s strategic directions - NSW 2021 Develop a Resourcing Strategy 2 that articulates how the services are to be costed and delivered. Service and Infrastructure Delivery The role of local government in the delivery of services and infrastructure NSW communities expect quality services and infrastructure delivered when and where they are needed and at a price they can afford. They expect seamless delivery of those services by three spheres of connected and collaborative government. There are often competing views by the community in terms of the role that local government should play in the delivery of local services, but many agree on the role that council's should play in the provision of local infrastructure. Ask most people what it is they expect from their local council and the list is bound to include: Well maintained roads, free from potholes Streetlights Tips and recycling centres Libraries Kerb and gutters Rubbish removal Parks and gardens Sporting facilities The formation of the Local Government Act Review Taskforce 2. Includes a Long-term Financial Plan; Asset Management Policy, Strategy and Plans; and a Workforce Strategy. 5

6 Ask them what services they want, and this is where many people's views differ. For some people, the provision of child care, aged care or community transport services by their local council is critical. For others, their view is that these types of services are not core business for local government and should be provided by community groups, private providers or other agencies. Categories of services delivered by council The services that councils currently provide can be classified within the five key categories shown below: Category Examples Service and infrastructure needs, priorities and expectations of a particular community will be influenced by a range of factors including: Whether there are other agencies available to provide a particular service, or whether council is the only option The demographics of the community - e.g. in areas where there is a high proportion of people over 65, service needs will differ to areas with a high proportion of families with young children The geography of the area - e.g. coastal towns may prioritise land care activities, inland communities may prioritise irrigation programs The community s willingness to pay higher rates to get more services from their council The presence of a strong local business lobby - e.g. council operated tourism services may be a priority for areas with a high number of retail businesses, road infrastructure may be more of a priority for areas with a high presence of transport-reliant industries Proximity to major towns - if major services can be easily accessed elsewhere, there will be less pressure on the local councils to provide such services. It is the role of each council to: Identify local service and infrastructure priorities through consultation with the community Balance community expectations with available resources Perform specific regulatory functions Work closely with other Commonwealth and State agencies to deliver services to the community Lobby for services to address unmet needs. Planning for economic and community development Planning for sustainable land use Protecting the environment Safeguarding public health and safety Development of social/ community and economic plans Employment of community and economic development staff Operation of tourist centres and facilities Provision of grants to local groups to provide services Development of Local Environment Plans (LEPs) Development approvals Building approval and certification Management of public land Assessing and responding to the state of local environments Providing environmental programs Regulatory powers to prevent pollution or restore degraded environments Waste collection and management Water and sewerage services Preparedness and response to natural disaster Regulatory responsibilities regarding a range of community amenity, health and safety issues Providing community services library services sporting programs youth programs cultural activities community events child care centres services supporting vulnerable groups 6

7 Core, Competition and Market Gap Services A council s Delivery Program translates its community s strategic goals into the services it will provide over the 4 year council term. Within this context there are three factors that influence service delivery decisions that need to be better understood. Core Local Government Services Unlike some other Australian jurisdictions the NSW Local Government Act does not define 'core' services and does not require that core services are provided to a minimum standard before other service activities are considered. All councils in NSW provide some level of service to communities in each of the five service categories identified on the previous page. What varies is each council s capacity and the community s desire to deliver a suite of activities within each of these categories. Larger councils have access to a greater resource base, as they have a higher number of ratepayers, often benefit from competition within the marketplace, and can have greater economies of scale. Also, larger councils generally have better access to professional expertise as a result of their ability to recruit from a larger human resource pool. This often results in larger councils being better equipped to provide a broader range of services that fall within the core service categories. For smaller councils, the ability to provide even core services can be limited by their ability to generate financial resources, the result of a smaller ratepayer base, and their ability to attract and engage staff with the desired qualifications and skills to deliver the services. This can have an impact on smaller councils' ability to fulfill their legislative obligations, deliver the quantity and quality of service that they would like to achieve and meet the community's expectations and priorities. The other important aspect is that these councils are likely to have a larger market gap due to the absence of or limited private sector providers. Local Government Services Delivered in Competition with Other Service Providers Many metropolitan and regional rural councils choose to deliver services and infrastructure in competition with other providers. Councils choose to provide these services for historical or strategic reasons, or for potential revenue raising opportunities. Examples of competitive services include: Childcare Golf courses Tourist attractions Nurseries Aged care facilities Land development / marinas Caravan Parks IT networks (eg Southern Phone) Health and fitness centres Commercial car parks Quarries Local Government Market Gap Services Councils, particularly rural and regional councils, are commonly under pressure to provide 'market gap' services. These are services and related infrastructure that councils offer in the absence of alternate providers. These tend to be services that communities need but may not be economically viable for alternate providers. Council may or may not receive additional funding for these services. Such services include: Medical clinics Social services Multi-purpose service outlets Aged care services and programs Entertainment infrastructure Airports Saleyards Cemeteries These services tend to run at a loss and are generally subsidised by the council. Although this impacts on the capacity of the council to provide core services, these councils, as well as their communities, would argue that without this support the community would become more and more unviable. Infrastructure provision and maintenance Councils provide infrastructure such as local roads and bridges, water and sewerage infrastructure, waste facilities, public car parks, footpaths, sporting fields, parks, libraries, art galleries and other public buildings. Infrastructure development cannot be seen as a standalone activity. Once a road has been laid or a building has been constructed there is a need for ongoing maintenance to ensure that the infrastructure, or asset, is effectively maintained to an acceptable and safe standard. The provision of infrastructure is seen by some councils and communities as a service delivery category in its own right. The building of roads, footpaths, swimming pools, parks and community buildings not only enables the community to fulfill its basic needs, but also to achieve its aspirations. 7

8 As a result of competing demands on limited infrastructure funds and maintenance budgets, councils often have to: Deal with infrastructure 'wish lists' that continue to grow over time Defer critical infrastructure maintenance due to shortage of funds - often avoiding important decisions about infrastructure write-offs, sale or asset rationalisation programs as such decisions may be unpopular Borrow additional resources or seek special rate variations to assist with the costs of infrastructure development or address asset maintenance backlogs. The cumulative effect is often an increasing gap between the level of infrastructure required to deliver services to the community, and the current level of infrastructure available. In recognition of this issue the NSW Government has developed the Local Infrastructure Renewal Scheme (LIRS) to provide councils with a subsidy in interest costs, on major bank loans to fund infrastructure projects. Note: A council by council infrastructure audit is currently being undertaken to compile reliable data on the infrastructure backlog and to identify trends and issues across the State. This involves the review of existing council documentation including asset management plans, community strategic plans, long term financial plans, and past financial statements, supplemented by on-site visits for certain councils and a request for specific information from all councils. Models of service and infrastructure delivery The table below identifies some of the ways councils deliver services and infrastructure to their communities. See Appendix 2 for further information on these models. Service provision models Model Key Principals Benefits Challenges Council as provider of a service (the most common way in which councils deliver services) Council: Plans, resources and delivers the service using its own staff Accepts full responsibility for the quality of the service Accepts all the risks Increases accountability Design and quality of the service is within the direct control of the community through elected councillors. Exposes service delivery to variations in the political cycle. Council as a provider of a service on behalf of another sphere of Government Council delivers a service in partnership with another sphere of government. Examples include: Regulatory services provided by council staff where State government legislation requires or enables. Management of the road network. Water and sewerage services. Reduces duplication of services Provides local employment opportunities May reduce administrative overheads by utilizing council systems and expertise State agencies may have concerns about the type and quality of services delivered by councils. 3 Councils express concerns about cost shifting, the adequacy of funding and unnecessary restrictions on recovering costs. Continued next page 3. The National Inter-Governmental Agreement Establishing Principles Guiding Inter-Governmental Relations on Local Government Matters (IGA), signed in 2006, established principles about how such issues should be resolved. 8

9 Service provision models (cont) Model Key Principals Benefits Challenges Council as a commissioner of services through tender Increasingly councils are seeking to deliver services by tender to private sector providers. Examples include: Waste collection and processing Management of caravan parks and sporting, leisure and other community facilities Improved risk management Improved access to contemporary skills and technologies Increased opportunity for economies of scale and scope through multicouncil tendering Requires advanced skills in tender preparation and contract management within councils Services may become cost driven, resulting in loss of quality Current legislative constraints on multicouncil tendering Council as a funder of services Councils often provide funding and in-kind resources to non government organisations to support the collaborative provision of community services and projects to the local community. Supports service providers who are best placed to deliver services and projects. Can set up unrealistic expectations of ongoing funding or support. County councils There are currently 14 county councils in NSW, 8 provide weeds management, 4 provide water supply, 1 provides water and sewerage and 1 provides floodplain management. No new county councils have been established since Some councils and ROCs have suggested that county councils are the preferred model for delivering collaborative services. The option is sometimes viewed unfavourably by councils due to the high level of governance prescription in the Act. Collaborative arrangements and Regional Organisations of Councils (ROCs) See Appendix 3 for further information about services provided by ROCs ROCs have emerged as the principle mechanism through which councils collaborate with the following functions: Advocacy Information sharing and problem solving Regional strategic planning Service provision (either to the public or to member councils). A number of ROCs now provide regional weed services. Examples of collaborative arrangements include: Provision of regional library services Regional waste programs Potential savings through economies of scope and scale Increased strategic capacity for councils Currently ROCs are structured as section 355 committees hosted by a member council, companies limited by guarantee or incorporated associations. Some have suggested that what is needed is a modified form of a county council, without the current onerous degree of governance obligation and restriction. Continued next page 9

10 Service provision models (cont) Model Key Principals Benefits Challenges Commercial entities under the Corporations Act 2001 (Cth) (Require the approval of the Minister, with some exemptions subject to certain conditions) Some councils have sought to establish separate corporate entities to deliver services. Councils may own all or some of the shares in the entity. Directors of the entity may be councillors or other people with appropriate expertise. Entities include airports, equine and livestock centres, sporting and leisure facilities, waste services, tourist attractions and festival promotions. Separates service delivery from the political cycle. Allows the entity to employ staff in its own right. Allows management decisions to be undertaken as in a corporate market place. Directors are obliged to act in the interests of the entity not necessarily the interests of councils which formed the entity. The entity is accountable to its shareholders, not the local community. Public private partnerships (PPPs) PPPs are a mechanism to attract private investment in the delivery of public infrastructure. Example projects include: Sale yards Car parking Supermarkets Airport upgrades Waste facilities Public swimming pools Sporting facilities Commercial centres PPPs have the potential to attract significant private investment into profitable local infrastructure and services. Approximately 33 projects have been undertaken under the PPP legislation since its commencements. Reduced political accountability Risk of cost blow outs if not well planned and managed Services may be driven by profit, rather than quality Local government owned statutory corporation The Central Coast Water Corporation Act 2006 was passed to formalise a collaborative arrangement which is in place between Gosford and Wyong councils for the provision of water. This is the only example of this type of service delivery. The Act was passed in 2006 but councils encountered a range of implementation issues. Full implementation is not expected until

11 Service Delivery Issues & Options 4. Service delivery issues and options Local government service delivery performance There is currently no definition of the responsibilities of councils in relation to service delivery obligations or expectations. This makes measurement or understanding of council service delivery performance complex. The main measures of the quality of council service delivery are: Annual Reports which report on performance measures identified in the delivery program. Comparative Information on NSW Local Government Councils which provides information about the annual financial performance of councils, including specific information on costs per capita in the areas of environment and health, recreation and leisure, and community services. Although this information is limited in its ability to measure service delivery it does allow for some financial and quantitative data comparisons across councils. No comparative data on council or council service delivery satisfaction across councils. NSW Ombudsman Reports and complainant data. Promoting Better Practice Reviews (conducted by the Division of Local Government). Complaints data (held by the Division). These measures do not provide comprehensive data about the quality of services delivered by councils. More active performance measurement and management has seen improvements in local government service delivery in other jurisdictions (e.g. UK), however this needs to be balanced with the potential costs to councils and the regulator of implementing and complying with any system. Should the Act set minimum standards for (core) services? Should there be a differential framework to allow for regional variations? Is a more comprehensive performance measurement framework necessary to create stronger local government and support an earned autonomy approach? Local government service costs Council service delivery costs vary considerably and are driven by such factors as a council s location, the size of the local government area, capacity to access economies of scale and the costs of attracting and retaining suitably skilled staff. A major component of service delivery costs is corporate overheads, which are estimated by some councils to be as high as 50%. While this may seem excessive, no work has yet been done to define what constitutes acceptable corporate overheads for local government, nor to set realistic industry efficiency benchmarks. Should further work be undertaken to define corporate overheads and identify industry efficiency benchmarks? Councils provide a range of services in competition with other providers. These services should be declared as businesses in accordance with the National Competition Policy Guidelines, and priced to achieve cost recovery. Available data suggests that many of these services currently operate in deficit, which means that the council is effectively subsidising their operation. If a council is running a business operation at a loss, in competition with private sector providers, the question should arise as to why is it operating in that environment. Sometimes there is a community need that has been established but often these businesses are legacy assets or operations. There are also challenges because historically there has been minimal cooperation between councils in the formulation of these businesses. This has led to some councils in effect operating businesses in competition with each other, eg airports. For example, water and sewer businesses are automatically declared business activities, so would be expected to offer a return on investment. However, some rural councils are unable to achieve full cost recovery due to limited community capacity to pay and disproportionate infrastructure costs, let alone generate a profit from these businesses. This issue may warrant further investigation. Should there be any restriction on the type of services a council can provide? If so what should these restrictions be? 11

12 Some, mainly regional and rural councils, have sought to reduce costs through collaborative arrangements and have experienced some success, particularly in regard to bulk procurement. A number of national and international jurisdictions have emphasised the importance of developing costeffective service delivery models and strategies. For example, the United Kingdom (UK) Operational Efficiency Program 4 focuses on building business efficiency through: Back office operations and IT Collaborative procurement Improved asset management (including property) and sales Local incentives and empowerment which includes: - local strategic partnerships - alignment of performance frameworks with value for money targets - avoiding ring-fencing with increased local flexibility and coordination - development of continuous improvement / capability tools. The UK emphasis is on building efficiency through collaborative partnerships between central and local governments with a high degree of accountability. A number of actions in the NSW Destination 2036 Action Plan are aimed at cost effective service delivery, including action relating to: Shared staff (1d) Councils taking advantage of the NBN (2c) Developing alternate service delivery business models (2e) Developing options for state-wide procurement and technology, including potential amendments to tendering regulations (2f). Is there sufficient emphasis on support and incentives for council efficiency in the current local government system? Regulatory functions Local Government regulation falls into six key areas of Building and construction Parking and road transport Food safety Public health and safety environmental regulation Planning, zoning and development assessment. Councils employ significant numbers of staff to enforce these regulations. There are growing pressures on local government to increase the levels of compliance and enforcement services it provides. Reasons for this may include: Increased community expectations that councils will manage compliance matters more efficiently Increased use of parking metres and parking restrictions, resulting in the need for more parking officers Changes in legislation such as swimming pool regulations, resulting in more demand for pool inspections Greater demand for building inspections due to housing growth and development in some areas Increased large scale industrial developments resulting in more noise and pollution complaints Pressure from State agencies for councils to administer more regulation, based on an assumption that councils have more on the ground resources in local communities and are better placed to administer the required regulation. The community, and in particular the business community, is often concerned about the cost of regulation enforcement. However, this needs to be balanced against the tendency of communities to call for strengthened legislation whenever something goes wrong in a local community, for example, drowning in a backyard pool, a dog attack, public consumption of alcohol etc. Note: A recent Productivity Commission report, Business Regulation Benchmarking: Role of Local Government as Regulator, identified a number of areas of local government regulation that place unnecessary regulatory burdens on Australian businesses. It also identified a range of leading practices in Australia and the United Kingdom which, if implemented more widely, have the potential to lower the costs imposed on business while maintaining the outcomes sought. IPART is currently conducting a red tape review of how local councils in NSW implement and enforce regulations, in order to reduce unnecessary regulatory costs (red tape) on business and the community

13 Where it is determined that councils are best placed to exercise a regulatory function on behalf of the State Government, how should these functions be funded by the State and how can consistency in implementation be assured? Remote communities in Western NSW Small communities in western NSW face major challenges including: Declining and aging populations Growing Aboriginal communities with increasing needs Economies based on agriculture which are susceptible to market variations Susceptibility to natural disasters resulting in economic and social pressures Remoteness from the major population centres upon which the communities are dependent for all or most of their service needs High levels of unemployment, limited employment and educational opportunities Socially disadvantaged communities with high dependency needs. Councils in remote NSW are expected by their communities to provide the same services as other NSW councils but face the following specific challenges: They are often the only door into government in the region, with expectations that they fill the gaps created when other spheres of government do not have a presence Long-term financial sustainability driven by low rates-income, high dependence on grants, high maintenance costs and unmet local infrastructure needs Limited ability to attract and retain skilled and experienced staff with the capacity to resolve complex service delivery issues Limited structural and strategic connections with other councils and with NSW and Australian government agencies What types of governance and service delivery frameworks would better suit the service delivery needs of rural and remote communities? The expanding role of local government in service delivery The scope of local government service delivery has expanded considerably over recent decades driven by: Increasing community expectations The need for local service delivery mechanisms for other spheres of government service delivery priorities. The IPR Framework now provides a mechanism for councils to determine what services they will provide, taking into account community and State Government expectations. However, the term of council will be the first full implementation cycle for the IPR Framework and some councils still struggle to understand its requirements. Some communities continue to have false expectations about what a council can achieve and there continues to be issues about the roles of State and local government. The NZ Better Local Government Initiative 5 has identified the need to refocus the purpose of local government as part of an eight point reform plan. This initiative argues that communities are better served by government providing a clearer purpose statement on the role of councils (with) councils role being defined as the provision of good quality local infrastructure, public services and regulatory functions at the least possible cost to households and business. Similarly, NSW now has the opportunity to consider: Defining core services to be provided by local government, within a differential structure that considers the needs of local communities. This should include detailed consideration of the subsidiarity concept, that is, services delivered by the most local level that has sufficient scale to reasonably deliver them. Improved funder/provider arrangements with State and Commonwealth Governments. The development of standards for core services that should be met before other secondary or non-core services are considered. Whether councils should be primarily providers of services (as is currently the case) or whether councils should be a commissioner of services which are provided by separate entities which may or may not be council owned. Guidance for councils about the delivery of noncore services. What types of local government services should remain under the direct control of a council, with delivery by council staff and why?

14 The role of ROCS and collaborative governance Future models of council collaboration in service delivery should be considered in the context of other issues being considered by the Panel, and potentially include: Identification of local government services that are best provided through collaboration Legislative recognition of ROCs The role of county councils including governance and functions Legislation that facilitates collaborative tendering Ability for councils to form corporate entities Development of a suite of collaborative governance models, including contractual (legally binding) arrangements and shared administration State and local government collaborative service provision arrangements Overlaps with other forms of regional service delivery, including Catchment Management Authorities Consistent governance models and entities. What types of local government services may be more effectively provided by collaborative partnerships or ROCs and why? 14

15 Appendix 1. Legislation Impacting on Local Government Service Delivery Acts In addition to the Local Government Act 1993, Environmental Planning and Assessment Act, 1979, Companion Animals Act 1998 and the Swimming Pools Act 1992 there are over 120 others Acts, with associated Regulations, which enable a council to provide a service or regulatory function. The main Acts are: Contaminated Land Management identification and management of contaminated land Food Act inspection of food premises Impounding Act powers to impound animals and articles Library Act library services provided by councils, including through collaborative arrangements Noise Control Act 1975 Noxious Weeds Act 1993 Protection of the Environment Operations Act 1997 Public Health Act 2010 inspection of certain premises and systems for purposes of microbial control Roads Act responsibilities and powers regarding roads, including parking Rural Fires Act 1997 State Emergency and Rescue Management Act council responsibilities regarding natural disaster preparedness and response Coastal Protection Act limitation on coastal development by councils Threatened Species Conservation Act 1995 Regulations administered by the Division of Local Government Local Government (General) Regulation This is the principal Regulation providing local government with powers that cover: - water supply - sewerage - stormwater drainage work - management of waste - community land - public roads - public car parks - domestic oil or solid fuel heating appliances - amusement devices - domestic greywater diversion - bathing control - shared accommodation - hairdressers shops - beauty salons - mortuaries - keeping birds or animals Companion Animals Regulation This Regulation provides councils with regulatory powers to ensure responsible care and management of companion animals. Swimming Pools Regulation This Regulation provides for all private swimming to have a foursided child proof barrier and provides councils with regulatory powers. Local Government (Manufactured Home Estates, Caravan Parks, Camping Grounds and Moveable Dwellings) Regulation The Division of Local Government has delegated administration of this Regulation to the Department of Planning and Infrastructure. The Regulation sets standards for the design of manufactured homes estates, caravan parks and camping grounds, and provides councils with powers to enforce these standards. This regulation is scheduled for review. 15

16 Appendix 2. Mechanisms for the Delivery of Services and Infrastructure Councils deliver services to their communities in the following ways: Council as provider of a service This has been the most common way a council delivers services. Council plans, resources and delivers the service using its own staff. Council accepts full responsibility for the quality of the service and accepts all the risks. The design and quality of the service is within the direct control of a community through elected councillors. While this increases accountability, it exposes service delivery to variations in the political cycle. Council as a provider of a service on behalf of another sphere of Government Councils deliver some services in partnership with another sphere of government. Examples include: State Government legislation which requires or enables councils to deliver regulatory services. Regulatory services are provided by council staff. Relevant regulations usually allow councils to recover costs, with maximum costs being prescribed in some cases. Some regulations allow a council to delegate a regulatory function to another council (e.g. food premises inspection) while other regulations prevent this. The management of the road network in NSW. While Roads and Maritime Services is responsible for managing state roads, councils are responsible for managing regional and local roads. The State Government provides funding to councils for managing regional roads and, in some cases, for the maintenance of state roads in the local government area. Councils are responsible for funding the management of local roads (for further information, see Appendix 4). Water and sewerage services are provided to Greater Sydney and Hunter areas by Sydney Water and Hunter Water Corporations respectively with the minimal involvement of metropolitan councils. Services to the Central Coast are currently provided by a partnership between Gosford and Wyong Councils. From 2013 they will be provided by the council owned Central Coast Water Corporation. Regional and rural councils are the Local Water Utilities (LWUs) for the remainder of NSW (with minor exceptions) and receive some grant funding to assist in this. LWUs operate under the Local Government Act and within guidelines issued by the NSW Office of Water (NOW). In December 2008 the Minister for Water released the Report of the Independent Inquiry into Secure and Sustainable Urban Water Supply and Sewerage Services for Non-Metropolitan NSW. Public comment was sought on its recommendations relating to LWU service delivery structure, including the formation of binding strategic alliances or water corporations. NOW has not finalised a response to the recommendations. Council environmental programs are supplemented with significant grant funding provided by State and Federal Government. There is some significant overlap between the environmental services provided by general purpose councils and services provided by other statutory organisations, including the Livestock Health and Pest Authorities (LHPA), Catchment Management Authorities (CMA) and Weeds County Councils. A review of these overlapping organisations has commenced. Many councils provide state and federally funded community services including child care, aged care, home and community care and community transport. Funding is provided under a service delivery contract. Councils compete for this funding with non-government organisations and often with private providers. However, some councils argue that the funding is inadequate and that they need to provide supplementary funding. They consider this to be cost shifting. Councils have responsibilities for natural disaster preparedness and response under the State Emergency and Rescue Management Act Council service delivery on behalf of other spheres of government can be contentious. State agencies may have concerns about the type and quality of services delivered by councils. Conversely councils express concern about cost shifting, the adequacy of funding and unnecessary restrictions on recovering costs. 16

17 The National Inter-Governmental Agreement Establishing Principles Guiding Inter-Governmental Relations on Local Government Matters (IGA), signed in 2006, was intended to establish clear principles about how such issues should be resolved. A NSW IGA was subsequently signed. The national IGA has been extended pending completion of a review. A new NSW IGA is currently being negotiated. Council as a commissioner of services through tender Increasingly councils are seeking to deliver services by tender to private sector providers. Examples include: Waste collection and processing, generally in collaboration with other councils. Management of caravan parks and sporting, leisure and other community facilities. Environmental solutions. There is a trend towards increased provision of services through contracts which specify the quantity and quality of the service. However, some councils resist contracting out, as once a contract is in place the delivery and quality of the service is removed from the direct control and responsibility of the council. Council as a funder of services Councils often provide funding and in-kind resources to community organisations to provide services and projects for the local community. County councils The Local Government Act provides for the establishment of county councils which provide services on a regional basis. There are currently 14 county councils, eight providing weeds management, four providing water supply, one providing water and sewerage services and one providing floodplain management. No additional county councils have been established since Generally this option is not perceived favourably by councils due to the high level of governance prescribed within the Act. Some councils and ROCs have suggested that county councils are the preferred model for delivering collaborative services. However, they suggest that the current provisions of the Local Government Act relating to governance and reporting of county councils needs to be rationalised and streamlined because they are costly and inefficient. Collaborative arrangements and ROCs In January 2010, the Division of Local Government surveyed all councils and council managed collaborative arrangements. The survey report documents over 600 collaborative arrangements and includes over 150 project descriptions including strategic alliances, sister cities and specific function arrangements. This is in addition to the services provided by ROCs. Collaborative arrangements are a way of building capacity in the Sector. The arrangements provide services to the community in areas as diverse as companion animals, community services, economic development, emergency services, environment, health, land use planning, roads, Aboriginal heritage, tourism, waste, water and sewerage. The most common example is the provision of regional library services. The majority of non-metropolitan and some Sydney councils are members of such partnerships. These partnerships are now formally recognised under the Library Act Waste programs are also increasingly delivered through collaborative arrangements. Collaborative arrangements are being used to a small extent in relation to internal business functions, such as payroll, HR administration, accounts, records management and customer service. In the main these business functions are provided through partnerships of smaller councils in regional and rural areas. Legal and Governance Models for Shared Services in Local Government (Interim Report), Australian Centre of Excellence for Local Government, May 2012 examines available legal options and collaborative service delivery models used in Australia. ROCs have emerged as the principal mechanism through which councils collaborate with the following functions: Advocacy Information sharing and problem solving Regional strategic planning Service provision (either to the public or to member councils). A number of Regional Organisations of Councils now provide regional weed services. Researchers have suggested that the future role of ROCS should include: Building member councils strategic planning capacity 17

18 Delivering council services on a regional basis Delivering shared corporate services on a regional basis Providing a regional voice for member councils and their communities Procurement of shared assets and resources for productivity and efficiency gains Regional training and the regional development of employee skills Being a reference point for both State and Federal Government Commercial entities under the Corporations Act 2001 (Commonwealth) Some councils have sought to establish separate corporate entities to deliver services. Councils may own all or some of the shares in the entity. Directors of the entity may be councillors or other people with particular expertise. The advantages of the formation of commercial entities include: Better application of business principles to service delivery Separating service delivery from the political cycle Improved risk management Allows the entity to employ staff in its own right Allows management decisions to be undertaken as in a corporate market place Corporations are more efficient than county councils The disadvantages include: Directors of entities are obliged to act in the interests of the entity not necessarily the interests of the councils which formed the entity The entity is accountable to its shareholders, not the local community Entities formed for one purpose may change purposes which may not be a community priority Weakened local government employment opportunities and conditions Services that are not cost-effective will diminish or cease Section 358 of the Local Government Act requires the approval of the Minister to form a separate entity, with some exemptions, subject to certain conditions. Entities include airports, equine and livestock centres, sporting and leisure facilities, waste services, tourist attractions and festival promotions. The Kimbriki facility at Ingleside is an example of this type of service delivery. Kimbriki was originally established as a landfill in At that time the site was operated by an unincorporated business of SHOROC - originally Manly, Mosman and Warringah Councils with Pittwater Council joining in A joint services committee comprising representatives from each of the Councils managed the operations. In Kimbriki became a Recycling and Waste Disposal Centre. This significant shift from waste disposal to resource recovery shaped the future of the facility and has allowed the remaining life of the Kimbriki landfill, within approved capacity limits, to exceed 60 years based on land fill at the present rate. In 2009 Kimbriki Environmental Enterprises Pty Ltd (KEE), was created to own and operate the Kimbriki site with Warringah, Manly, Mosman and Pittwater Councils as shareholders. The business is now overseen by an independent non-executive Board of Directors and an experienced management team appointed by SHOROC. Public private partnerships (PPPs) PPPs are a mechanism to attract private investment in the delivery of public infrastructure. They are subject to the requirements of the Local Government Amendment (Public Private Partnerships) Act 2004 which defines a PPP as an arrangement between a council and a private person for the purposes of: (a) providing public infrastructure or facilities (being infrastructure or facilities in respect of which the council has an interest, liability or responsibility under the arrangement), or (b) delivering services in accordance with the arrangement, or both. PPPs have the potential to attract significant private investment into profitable local infrastructure and services. Approximately 33 projects have been undertaken under the PPP legislation since its commencement. Projects include: Saleyards Car parking Supermarkets Airport upgrades Waste facilities Public swimming pools Sports facilities Commercial centres 18