April 2013

Proposed actions to improve performance within councils

The Minister for Local Government recently introduced the Local Government Amendment (Early Intervention) Bill 2013 into the Legislative Assembly of New South Wales.

The purpose of this Bill is to put in place a more effective framework than currently exists for addressing “dysfunction and poor performance” in local councils.

Most of the proposed reforms are aimed at addressing dysfunctional relations between councillors, which frustrate the business of councils.  Some examples of dysfunction include councillors engaging in disruptive behaviour, denying quorums at meetings, groups of councillors disputing with each other and individual councillors striving for the mayoralty in a way which impedes the council’s ability to meet the needs of its community.

The main reforms proposed by the Bill include powers created and the consequences for Council:

  • Power: The Director-General or the Minister may issue an order directing a council, councillor or general manager to provide information identifying dysfunction, prepare a report and make recommendations as considered appropriate.
    • Consequence: Failure to comply with the order will be an offence carrying a maximum penalty of $2,200.00.
  • Power: The Minister may issue performance improvement orders requiring action to be taken by the council, individual councillors or both to improve the performance of the council.
    • Consequence: The Minister must provide a consultation period to enable the council to make submissions before making the order.  The council has responsibility for complying with the order and for giving the Minister a compliance report.  The Minister may appoint a temporary adviser to assist the council to comply with the order and monitor the council's compliance.
  • Power: The Minister may suspend the council for up to 3 months (with a possible extension for a further 3 months if required) and appoint an interim administrator to exercise the same or different functions of the council while suspended.
    • Consequence: The Minister must provide a consultation period to enable the council to make submissions before making the suspension order.  The interim administrator must give the Minister a report on his or her administration of the council and provide recommendations for improving the effective functioning of the council.
  • Power: The Governor or Minister may appoint a commissioner to hold a public inquiry into any act or omission of the council and its staff in carrying their statutory functions. 
    • Consequence: During the public inquiry, the council may be suspended and an interim administrator may be appointed.  The Director-General may recover the expenses of the inquiry from the council if the inquiry relates to a problem which has recurred despite previous Ministerial intervention.

It is only the first and last powers which apply both to councillors and also to staff of the council.  Councillors will not be entitled to any form of remuneration or payment of expenses and will not be entitled to exercise civic functions if suspended.

The salary of temporary advisers and interim administrators must be paid out of council funds.

If enacted, the Bill should enable councils to drive their own improvement through early intervention in the problem.  This will overcome the current limited means for dealing with alleged poor performance which currently can mean time-consuming and costly investigations by the Division of Local Government or public inquiries which can lead to the dismissal of the council.  All of these activities are very disruptive to the business of the council and upsetting for staff and members of the public.

Councillors who take over after an administrator has been in place often complain that the city has been starved of progressive actions to stimulate growth, because the role of administrators is one of containment concentrating on governance.  This provides another reason to avoid suspending councillors.

The proposed new powers should provide an effective, collaborative and transparent path towards resolving these problems.

We will report further as the Bill makes its way through the Parliament.

Authors: Peter Barakate & Mary-Lynne Taylor