Pace of reform agenda picks up

The Local Government Acts Taskforce released a Discussion Paper on 4 April 2013 and the Independent Local Government Review Panel released their “Future Directions for NSW Local Government: 20 Essential Steps” on 24 April.

Clearly the more significant report is that of the Independent Review Panel because the Panel has produced a well-reasoned, thorough, exhaustive and wide-ranging series of recommendations to allow local government to develop and prosper over the next 25 years.

The Panel provided a presentation to the unions and LGNSW prior to the public release of their Future Directions paper and their 20 Essential Steps build on the financial analysis announced in the previous fortnight by TCorp which showed “a disturbing picture of a local government system facing major financial problems with apparently little awareness of just how serious the situation has become”. How embarrassing is that? “Little awareness of how serious the situation has become” is beyond damning. 70 councils of 153 expected by TCorp to be financially at risk within three years. Uh oh …


In a way, and like the thoughtful and well-researched analysis of local government in the Barnett Report in 1973 and the Sproats Report by UTS academic Professor Kevin Sproats in 2001, the Independent Review Panel is on a hiding to nothing. It’s unlikely that local government is capable of an intellectual, rigourous and dispassionate debate about how councils can be made financially sustainable, good service providers and good and responsible employers over the next 25 years. There are far too many vested interests - starting with elected councillors anxious about potentially losing their relevance, mayors too attached to the robe and chain and allusions of the grandiose, and all the way down to employees who don’t want anything to change, ever.

But there are no options of more grant income and a picture of almost half the councils in New South Wales financially at risk is one that cannot be ignored.

We wouldn’t have one member anywhere in the state who, at some stage, hasn’t been refused access to a training course that they thought important or even essential, because of their Council’s limited budget.

We want a well-financed local government system with a commitment to training their staff, paying them well and reflecting market shortages, and providing flexible and accommodating work to acknowledge changing family responsibilities. 70 “at risk” councils can’t do this and the substantial majority of those not “at risk” can’t do it either. Something must change.

But while vested interests will contest the sensible proposals about voluntary amalgamations, county council equivalents etc, the Panel’s strategy of recommending options and the broad sweep of their reform agenda - to include things like a requirement for each Council to have a Chief Financial Officer; mandatory training of general managers and councillors; recommendations on trying to improve the quality of councillors; (nicely) pointing out the current lack of direction and focus of the DLG and LGNSW, and many more - has to mean that there is a broad range of reform initiatives which will proceed.

And you have to love the observation made by the Panel at page 23:

The Panel can understand why in a very tight fiscal environment some local government leaders - senior managers and elected members - are looking for every available option to cut costs. In that context, changing some features of the award, terminating existing over-award conditions and outsourcing or creating new entities outside the award’s coverage may seem to be attractive courses of action. However, the Panel is not convinced that the award is as costly and inflexible as some believe and that further efficiency and productivity gains cannot be made through negotiation.” Our emphasis added.

There’s one in the eye for the HR flunkies and managers poncing around in the Destination 2036 Working Parties, having no idea what they’re talking about but claiming that there is no flexibility in the award.

The Local Government Acts Taskforce proposes many changes to those parts of the Local Government Act that don’t deal with employment and it’s not until page 37 (and only for three pages) of the 84 page report that they get down to the appointment and management of staff. And while they note comments in submissions about issues relating to security of tenure for general managers under the standard form of contract, it doesn’t distract them from making recommendation 3.3.3 on page 39 that:

“(ii)  all positions meeting the criteria as a senior staff position be treated as such, appointed under the prescribed standard contract for senior staff, identified as a senior staff position within the organisation structure, and the remuneration be reported in the Council’s annual report.”

This would open the industry to many more positions being identified as senior staff, just like we experienced at Liverpool. The current Act prevents councils from determining positions to be senior staff unless they are over a certain remuneration level (s332(2)(b) and currently around $154,000) and more significantly in the previous subparagraph at section 332(2)(a) “the responsibilities, skills and accountabilities of the position are generally equivalent to those applicable to the Executive Band of the Local Government (State) Award.”

Back in the day when the Act was introduced, depa filed two disputes. Using Jeff Shaw QC as our legal adviser (he was also the Shadow Minister for both Local Government and Industrial Relations at the time) we filed one dispute to try and slow down the zeal of some general managers to move the senior staff classification into the third level of management and pick up, at councils like Sutherland for example, 23 - 27 managers, by proposing there should be some restriction on which positions could be determined to be Senior Staff and, the second, to determine some form of compensation for loss of tenure by being forced into a term contract.

There are plenty of positions around in the third level of councils with remuneration levels above the minimum level to be determined to be Senior Staff. There are also many councils which have refrained from identifying the second level of management as senior staff to avoid the rigidity and lack of imagination that underpins the standard contract.

But it was not until the Liverpool dispute that someone thought it made sense to remove employment protections and a string of entitlements and rights for managers. The Mayor acknowledged that it took too long to performance manage someone out of the organisation they didn’t like and a term contract with the ability to pay someone 38 weeks pay and give them no explanation, was just what they needed. But clearly if a Director of Environment and Planning at a little Council in the bush with two or three staff can be Senior Staff, why can’t a Manager of Strategic Planning, or Compliance with 10 or 20 staff, significantly more accountability and responsibility and a much bigger budget?

The problem is, of course, that the Standard Contract is inflexible and doesn’t allow the sort of options which should be available to a mature employer in negotiating an employment arrangement with their CEO. It’s ironic, amongst other things, that there is more flexibility and a greater capacity to reward performance for employees under the Award than the Standard Contract and it’s no accident that the Independent Review Panel has targeted the DLG to shake them out of their reactionary complacency and get them doing something to help the industry.

Meanwhile, the Destination 2036 Working Parties lumber on with hand-to-hand combat between the unions and the reactionary HR people and the LGMA in those Working Parties looking at “flexibility” in employment arrangements. We chose to keep away because there are some things and some people you simply can’t reach agreement with and we didn’t want to end up being credited with participating in consultation but where we didn’t like the end result. Who needs to run the risk of being perceived as being part of the fantasised problem, and the problematic solution as well?

But there are plenty of dilettantes and boofheads involved in this process who won’t have appreciated the observations made by the Panel about the inherent flexibilities that exist in the State Award.

And the Standard Contracts Working Party dawdles along with the DLG not really interested in protecting General Managers (and then in the next phase, senior staff) and neither is the LGMA. Having said that, there was an historic agreement between everyone involved, the employers, the unions and the LGMA that there should be a flexibility in the Standard Contract to allow the negotiation of annual cash bonuses - only to be rejected by the DLG. DLG senior staff aren’t allowed to have cash bonuses, so why should anyone else. So there.

The recommendation of the Independent Panel that the DLG become more facilitative and better focused on the industry is very timely and the need for this to be occurring is no more evident than in this Working Party. The DLG is a regulator which hates the industry it regulates, the people who work in it and those who are elected to it.

The IPART Red Tape Review continues, has released some preliminary and confidential points for discussion, but nothing we can really let you know about yet.

Don’t panic, is the first message and the second message is don’t panic too. At this stage there is nothing to fear but fear itself and there is plenty of that about the industry to obscure the good work being done by the Independent Review Panel and the Acts Taskforce.

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