Corporate Governance in the Public Sector 2007 Conference – Overcoming the governance challenges to local government
Tuesday 20 February 2007
Good Morning. It’s a pleasure to be here today to look at some of the very fundamental issues that face the elected members who serve on local bodies.
The old Local Government Act was much more prescriptive than the new Local Government Act 2002.
Today’s Act gives us a lot more opportunities. In fact we can do anything a body corporate can do. But at the same time there have been stringent requirements placed on us in terms of accountability.
It has also raised the bar on what is required of elected members in terms of roles, duties and competencies.
Government policy states, as its ruling principle, that local government should undertake responsibilities only where the net benefit would exceed that of other institutional arrangements. Subsidiary principles that are applied, include functions that are based on communities of interest, operational efficiencies to be achieved, clear, non-conflicting objectives, trade-off of objectives to be explicit and transparent and clear and strong accountability mechanisms.
Asset Management Plans
- Forced politicians to stop medling in management of assets eg QEII
- “I will drop your rates”
One of the transparency mechanisms is the Long Term Council Community Plan which must be resolved every three years.
In 2006 we went through the LTCCP. This required a huge amount of administration by the staff of Christchurch City Council, with one senior staff member working on it almost full time and all managers and their deputies having to give considerable time and resources at various times.
Over the 6 months it took to finalise the Christchurch plan there were 75 public meetings, 2000 submissions were received and recorded and Council heard in the region of 400 personal submitters. The huge cost of this process is self evident in the number of man hours needed to process the plan.
There is a trade off in that in Year One a lot of effort goes into the LTCCP and Years two and three are relatively quiet with not quite so much work to be done.
LTCCP is just one example of added costs to Council imposed by Parliament.
- Consultation is the new curse of local govt
- Many, mostly middle class people, who if don’t get what they want they now then drag us through the Courts - Museum
Another example is that at the present time Councils are going through a process of accreditation to enable council staff to process building consents. Something they have been doing for as long as I can remember!
The initial amount Council must pay to government for this accreditation has not been decided, but it is in the region of $60,000 for our council. This is the surface cost.
Underneath this, lurking like a giant iceberg, are the costs of preparing the accreditation, getting staff trained and hiring new staff that meet the new criteria.
This cost will be reflected in future building consents adding to developers’ costs and rates.
The Prostitution Act was another little minefield passed by Parliament. In response to a groundswell from the community against the Act our Council tried, at considerable cost in legal fees, to bring in a by-law regarding the opening of brothels in our suburbs, but the rules in the Act were quite clear. A brothel can be operated in the suburbs.
Another very controversial cost that central government has considered imposing on Christchurch is fluoridation of our water supply. From Government’s point of view this would improve the bottom line in the health budget.
It is quite ironic that Parliament can consider making fluoridation of our water mandatory with no public consultation but if we, as a Council, were take on such a measure we would have to be far more transparent.
Fluoridation is a very controversial issue and one that always brings about heated debate and a pile of letters and emails over my desk. Christchurch people are very proud of their artesian water and it would be a brave person in Christchurch local government who voted for fluoridation.
Members of Parliament are elected by the people of New Zealand and are thus given a mandate to govern and that includes governing local government and imposing new rules and regulations. However, when MP’s constituents complain about the rates burden, the MP’s do not look at themselves. I have been particularly interested at the number of times MP’s have attacked our council and our rates as we are an obvious whipping boy. I pay my taxes in resignation and my rates in anger.
At present there is a review of local government rates being undertaken by Parliament.
One thing you soon learn if you are standing for elected office is that there is no shortage of human resources out there vying for the job!
This is what CCC governs - it’s a part of the job description for elected members
People stand for office for many reasons. To get elected you do need a good profile in the community. There can be the single issue candidate, the populist, or a candidate who has done a lot of community service and wants to have more input into how the city is run.
Commonly, people who are elected to Local Government in New Zealand have generally acquired a high profile within their community in a variety of fields. For instance, it has become commonplace for high profile media personalities or sports people to be elected to office. Not always successfully. I have always promoted civics as an issues around schools and community meetings.
Their field of expertise will, of course, vary, but they can bring a variety of complementary skills to bear in their work as elected members.
In the case of nearly all the larger metropolitan councils the position of Mayor is a fulltime one which means that those elected to the Mayoralty are unable to continue with full time paid employment.
In recent years, there have been significant increases in the remuneration payable to elected members at all levels. However, despite these increases the rates currently paid are unlikely to attract highly qualified professional candidates, for the reasons that such persons are going to have to give up a lucrative professional practice to work as a full time councillor.
Another irony, given the number of candidates from the media, is that of media scrutiny of elected members. As media has morphed from being in the information business to being mainly in the entertainment business so has an increase in the undue intrusion into politicians private lives and personal affairs has been a significant factor in discouraging prospective candidates.
It’s not like applying for a job and handing over a cv listing all your competencies and having these competencies matched against the needs of the job.
Its not like a new Board member being appointed where the first step is to look at what expertise is missing on the Board and filling the hole in that area.
I always say I have the biggest job interview in town. People vote for you for all sorts of interesting reasons - and don’t for even more interesting ones!
The remuneration of Mayor’s and Councillors is aligned to that of corporate boards. However, whereas board membership is part time, the mayoralty of large municipalities is very much a full time job.
In a city the size of Christchurch the business leaders expect the Mayor to be fully informed and involved in the business issues of the city - this takes a lot of time.
The service groups and clubs and sports teams and social groups also expect the city's Mayor to be available and supportive.
As Mayor you are the leader of the team of Councillors - if you do not take a lead and chair council meetings, then the council team has no leader. The Mayor leads the debates and the seminars.
Community Boards expect the Mayor to be available to them for their meetings and be up with their issues. Then there are the visiting dignitaries, politicians, overseas guests, who have an expectation that the Mayor will be available for meetings and discussions.
There is the regional Mayoral forum where Christchurch must take a lead and the Mayor is very involved in regional economic issues. In the case of Christchurch it isn’t just a city job - it’s South Island Inc.
We have a number of economic bases in Christchurch, for example, the education sector is huge in Canterbury, and they expect the Mayor to be aware of their needs and involvement in the city. There are equal pressures from all of the economic bases on the Mayor and the mayor’s time.
All sorts of the groups have expectations of access to the Mayor. Each Friday I take a seat in Cathedral Square and talk to members of the public who bring their issues to me. I do this partly to help relieve the pressure on my diary.
The Mayor is a director on the Board of Chch City Holdings - the holding company for the infrastructure assets which the City owns and are so very important to our economy.
The Mayor and Councillors are the employers of the CEO of the CCC and time is spent on that relationship and this is important - the Mayor attends the CEOs management team meeting on a regular basis for feedback and debate and comment on issues.
It’s a big job to be mayor, and it is not a part time job.
It is increasingly obvious that a close look needs to be taken at the remuneration models that accurately reflect councillor workloads and responsibilities.
It is the heart of democratic government where citizens vote in a group of, often quite disparate, people, to form a unit to make decisions on our city’s future.
Once they have been elected they go through an induction process. The one issue candidate or the community advocate has to come to terms with governing and making decisions in the interests of the whole city. They are given some training in Council procedures, and in their role and responsibilities under the Local Government Act.
When there has been a shortage of ideas or skills available I have set up Mayoral Forums to tap into the community and business leaders for ideas. I started a Mayoral Forum on the Central City 9 years ago and I am just seeing the rewards for my perseverance. You have to be patient.
Being elected to office is not all about remuneration and being the right person for the job it is also about public service.
I have asked a number of good people from various walks of life to think about standing for Mayor. Their reply is, “why bother”. Why would they subject themselves to the kind of undue media attention we see. For example - the editorial from yesterday’s Press.
“His predecessor, Lesley McTurk, went some way to improving the Council operation, challenging a lacklustre civic-service mentality and introducing a more disciplined, business like approach.” (not everybody was lacklustre)
“He went through stormy times with one or two of the mayors he served under in Hamilton and always won.”
- Poor analysis
- Westminster thinking
- Imagine if business took this approach to its board
- “Massive public works are required to ensure it avoids the infrastructural, transport and environmental problems that plague other cities”
- “It also has to become much more efficient to ease the looming rates burden”
- Increase speeding
- But don’t raise the money to pay for it
“McTurk achieved some good things. But these often came at too high cost in staff morale” (of course, change is resisted.)
“Marryatt has an opportunity to rebuild those bridges and create a more constructive, progressive and outward-looking council, one that expends less energy on resolving internal struggles.”
Local body governance is a delicate balance. Council is elected to make decisions in the best interests of the whole city after listening to the views of the community and considering professional advice.
The debate that takes place in Council reflects the community that each of us was elected to represent and the decisions made in Council are made within a given set of rules and have legal standing. Our role is to show leadership and make decisions on matters where there are entrenched views on both sides. I repeat, it’s a delicate balance.
Councillors are elected to serve wards but when they sit at the Council table they are board members representing the whole city.
As a politician I know that there are a very diverse range of voters who are going to make a choice on how they vote based on their values and their experiences. As Mayor I know I am not just leading people who are the same as me, I am leading people who are very different.
I meet this challenge by being a leader who puts service first, in other words I follow the principles of servant leadership. In this kind of leadership, service, comes before financial reward. To do this well you first have to listen to what people want, not just the vocal and strident, but also the silent majority.
Desire to serve is not the problem. I know there are many professional people who serve their cities by sitting on boards of local cultural organisations and charities and indeed on my Mayoral Forums. Historically, this has led them to the Council table. We need to turnaround history and encourage them back.
There is a new paradigm in government emerging. The internet and electronic communications have changed the base of decision making. Ordinary people have access to as much information as the bureaucrats had in the past.
The role of the bureaucrat and elected represented has traditionally been to gather together then present this information to the city. Instead of an institution that is a repository of information and wisdom and knowledge it will actually have to become a partner in a variety of ways with the people and this will form the basis of strategies and policy. For example Sustainable Christchurch Otautahi is a group that is doing a lot of work with Council on issues of sustainability.
I am optimistic of the future. I know many young people are committed and proud of the City of Christchurch. We need to get this You Tube generation on our Community Boards and Council.
In my address today I have covered:
- The new Local Govt Act
- Central Govt/local govt interface
- Some of the pressures which elected members are subjected to
- Some of the roles of the Mayor
- The poor level of media scrutiny
- The Mayor as a public servant
My best wishes to you for your conference.