Mosman puts case against amalgamation

Posted Monday 29 April 2013council 300

As you may now be aware the State Government has appointed the Independent Local Government Review Panel (ILGRP) to examine and make recommendations on amalgamations of councils in NSW.

ILGRP will shortly produce an interim report that will outline its draft proposals on amalgamations involving all NSW Councils including, of course, Mosman.

At the last Council elections a referendum was conducted on whether Mosman residents were in favour of a council amalgamation. The result was a resounding 81 percent rejection of any such plan.

Defending this independence position Council has submitted a robust submission to the ILGRP reflecting our opposition to any Mosman Council amalgamation. The submission in full is available here:

This is an important issue for all Mosman residents. Council is concerned that ILGRP is ignoring our views and will not listen to our concerns.

Council concern is based on the available evidence, that the ILGRP is on a predetermined course to propose a series of mega councils for Sydney which would see Mosman swallowed up in a large regional council administered from Chatswood, North Sydney, Dee Why or even further afield.

In order to inform all residents of the issues involved I have summarised the major contents of our submission.

Summary of Submission

The Mosman Council strongly supports the independence of financially sustainable small local government areas and rejects forced amalgamations.

Small councils are as cost effective as large ones and provide greater and more personal levels of service than do large areas.

Compulsory amalgamation would have serious consequences for local services and has been overwhelmingly rejected in many referendums by the Mosman community.

Efficiency and Costs

It is acknowledged that larger local councils may have cost advantages from economies of scale, for example in senior management. However there are three strong countervailing cost factors.

First, small councils can achieve economies through formal on-going regional organisations of councils or ad hoc relationships.

Second, larger organisations are behaviourally less constrained and less transparent than small ones. Incompetence and corruption occur more often in large councils.

Thirdly, small councils are innovative. Mosman Council has been innovative in management plans (MOSPLAN), financial planning, out-sourcing work to the market and comprehensive asset management.

In ‘Councils in Cooperation, Shared Services and Australian Local Government’, Brian Dollery (Professor of Economics and Director of the Centre for Local Government, University of New England) and his co-authors show that forced amalgam-ations have not produced cost savings in Australia or elsewhere.

Services of Small Councils

Different communities have different preferences and needs. Such service differentials are better achieved by small local areas than by larger areas.

As recent Nobel Prize winner in Economics, American Elinor Ostrom has shown, small communities generate much greater trust and social capital. Communities of 300,000 people cannot generate as much inter-personal trust and mutual social capital as communities of 30,000.

The number of volunteers per head of population in Mosman and in Manly is five to six times higher than in other councils with eight to ten times the population size. It is inconceivable that large councils could attract so many volunteers in community work.

Mosman Council delivers a range of affordable, highly recognised and award winning community services, including Seniors and Youth Services, Carers Support Group, Community Visitors Scheme, menu-of-choice Meals on Wheels, community transport and early childhood programs. All would be threatened to some extent with amalgamation.

Financial Sustainability

Some local councils lack financial viability because they have high proportion of low income households and/or have responsibility for large, low density areas.

Such councils need state government support. Amalgamating neighbouring councils with similar socio-economic profiles and similar financial constraints will not resolve financial problems.

There is no financial case to merge Mosman with any local areas such as North Sydney or Manly. All these councils are independently financially sustainable.

Other Issues

In its Interim Report November 2012, ‘Better, Stronger Local Government: The Case for Sustainable Change’, the Panel stated that: “Local government in New South Wales must change. The future is challenging but also full of potential. Local councils must embrace the challenges and realise the potential… We all know the world will be a very different place in 2036, and therefore a realistic program for the future must be a program for substantial and lasting change.”

This language is rhetoric with no clear substance or meaning.

Also in the Interim Report, the Panel stated that “it is very difficult to see how large imbalances in population size can be justified”. But the Panel does not explain the problems associated with having some small, highly effective, councils.

In the United States, there are over 80,000 local councils doing various functions, of very varying sizes and many with only a few thousand citizens.

Conclusions

The ILGRP has not identified clearly and precisely the problems to be addressed.

Councillor Peter Abelson, Mayor