2012 Winning Communities Inc Cr Chris Meddows-Taylor Central Goldfields Shire Council, MAV Future of Local Government Leadership Group, Melbourne, October 2012 The Future of Local Government in Regional Service Delivery Collaboration Presentation to the MAV National Local Government Corporate Services Conference

2012 Winning Communities Inc “The streams of politics, policy and a problem intersect (Kingdon 1984) “Governments generally cannot do everything on their own; they need to work collaboratively with other stakeholders. This is especially so for local governments” (Metropolitan Local Government Review Panel Issues Paper –Western Australia 2011)

2012 Winning Communities Inc Change is upon us  A new public policy environment globally –economic, social, cultural and environmental challenges.  The likely expectation that government –and local government will be expected to do more with less.  A recognition connected government is the key to effective delivery and that collaboration is now essential for good governance and fast open government.  Over the next decade Victorian Councils are looking at:  $2.75 billion unfunded community infrastructure gap  60% of Councils have an underlying operating deficit  Local Government is likely to change more in the next 5-10 years than in the past 50 years.

2012 Winning Communities Inc The challenge is to respond ahead of the curve If local government don’t respond other levels of government will –and hasn’t that always been the case?

2012 Winning Communities Inc Change requires a fundamental rethink Local Government Do much more with much less State and Federal Governments Fundamental rethink and value creation Adding new Capabilities Traditional Shared Services Time Outcomes Future Solutions Challenge to Local Government* Building change readiness accelerates gap closure Become modern facilitators of sustainable regional economic development Develop new partnerships and strategic alliances Build learning and knowledge based communities. Move well beyond their traditional roles Results *Source: ALGA- State of the Regions Report 2003

2012 Winning Communities Inc What the ACELG said  “Greatly expanded regional cooperation and resource sharing may offer an alternative to amalgamations as a means of enabling councils to improve their efficiency and effectiveness.  the principal items of ‘unfinished business (include) expanded and strengthened regional collaboration and resource sharing (shared services), based on the establishment of robust and well resourced regional entities, amounting in some instances to fully- fledged ‘regional councils.’  Despite commissioning several of the inquiries, local government itself has mostly failed to assemble and prosecute packages of reforms that are acceptable to councils generally, and that also appeal to other key stakeholders – especially state governments.” “Unfinished Business?” –A decade of inquiries into Australian Local Government (Australian Centre of Excellence for Local Government) (2011)

2012 Winning Communities Inc The case to support better collaboration  Given the significant change occurring in the global context, we need drive reform and lead change.  There is a need for stronger collaboration to capture the economies of regional scale operations and to create the added value and opportunity regions provide.  Collaboration enables the capture of this new value and opportunity.  All councils need to be involved in the development and implementation of a strategic plan for the sector, starting now. * Extracted from MAV Future of Local Government Strategic Change Group 2012 Communiqué

2012 Winning Communities Inc Support from the FOLG Summit 2012 for collaboration was clear

2012 Winning Communities Inc And regions were seen as key to this collaboration

2012 Winning Communities Inc How the MAV is planning to help  Future of Local Government to be an ongoing development program.  Initial focus on:  Supporting Council Plan development and review to create a platform for strategic leverage and opportunity.  Building strategic capability and change readiness in councils, work teams and regions through focussed activities.  Capturing recent investment in regional strategic development by accelerating change and opportunity realisation in regions.  Developing a sector wide leadership group supported by communication tools and expert resources with the added benefit of structured input from external stakeholders.

2012 Winning Communities Inc  Existing MAV programs  Council Plan development and review (new offering)  Helping Councils Lead Change (new offerings around creativity and strategic development [Future Solutions] and Transformational Leadership).  Shared Services (economies of scale and scope)  Shared Capability (focus on building new strategic capabilities)  Optimisation (using regional strategic planning for added value creation)  FOLG Summit and workshops  FOLG Leadership Group  FOLG Stakeholder Reference Group  FOLG Website development  FOLG Expert Resources How is the change framework evolving?

2012 Winning Communities Inc  Regional Development Australia Committees  Regional Strategic Plans  Regional Growth Plans  Metropolitan Planning Strategy  Regional Planning Committees  Regional Growth Plan Steering Committees  Regional Mayors and CEOs Forums  Regional Management Forums  Regional Tourism Boards  Etc etc. New regional collaborative frameworks abound

2012 Winning Communities Inc Regional Collaboration -Objectives  Enhance local government capability by building strategic change capability and change readiness.  Identify and realise the benefits and opportunities for regional collaboration including  Shared Services (economies of scale and scope)  Shared Capability (focus on building new strategic capabilities)  Optimisation (using regional strategic planning for added value creation)  Build new value added cross boundary partnerships.  Build cross boundary leadership capability.  Create real learning experiences through joint activity.

2012 Winning Communities Inc  The delivery of common services across regions offers significant potential opportunity for change.  The drive to achieve new economies of scale is significant  Learnings generally are one size doesn’t fit all.  Consideration often turns to structure and delivery model but relationships and culture are as critical.  Delivery models range from less formal arrangements to multi-council owned companies.  It’s important to identify low hanging fruit.  Always invest in managing the change. This collaboration provides new opportunities for shared services

2012 Winning Communities Inc The process needs to be managed to avoid conflict Systems and Processes Activities & Actions Council “B’s” Way to Fix Problems Council “B’s” Way to Improve Processes Council “A’s” Way to Fix Problems Council “A’s” Way to Improve Processes Council “B” Council “A” The Results of the shared services is reduced by conflict and does not capture the potential synergies

2012 Winning Communities Inc Shared Services should build new capabilities Combined, Innovative Systems and Processes Aligned, Effective and Efficient Actions Improve quality of thinking and interaction (Learning & Knowledge ) High Functioning Shared Services Council “A’s” History and Lessons Learned Council “B’s” History and Lessons Learned The results of the shared services creates new synergies and builds new capabilities Desired Outcome Inputs Means to accelerated change 1. Discuss/ Test Beliefs Assumptions and Mental Models 2. Develop Shared Vision and Strategies

2012 Winning Communities Inc Merger Synergies Synergies realised 30% Ill-conceived, failed, or abandoned 15% Potential value ignored /forgotten 55% Source Arthur D Little Consulting Capturing the value of merged activities is important

2012 Winning Communities Inc * On a 7 point scale RankFactor Impact Score People based issue Forbes describes the top 10 reasons for the failures – “people” issues dominate the list

2012 Winning Communities Inc Capability -a new emphasis  The emphasis in the Queensland restructuring has been a shift from cost saving economies of scale to capability “Stronger, more robust local governments will enable councils to attract and retain staff.”*  In NSW Destination 2036 recognised one size doesn’t fit all proposing to “develop a variety of local government structural models to suit different environmental contexts.”*  Some key capabilities important to developing change readiness and maximising opportunity such as strategic development capability remain hard to attract. ( * Peter McKinlay- McKinlay Douglas Ltd 2012)

2012 Winning Communities Inc  What new demands are requiring new capabilities or capabilities hard to source?  Where are our key capability gaps?  What new solutions are needed to close these gaps?  What changes need to be made to implement these new solutions?  What are the low hanging fruit in terms of opportunities? Capability - collaborative considerations

2012 Winning Communities Inc Generic high value capabilities include--  Strategic development, alignment and focus.  Understanding of organisational and strategic interdependencies.  Collaboration across communities, regions and levels of government.  Understanding of roles and responsibilities of diverse stakeholders and partners.  Creativity to propose new solutions to community issues and challenges.  Capacity to develop and implement win-win solutions.  Capacity to manage change effectively.

2012 Winning Communities Inc  Councils need to use collaboration to not only identify sources of improved cost-effective services and sourcing added levels of capability but critically new value creation through regional opportunity.  The substantial investment in Regional Strategic Plans, Regional Growth Plans, Metropolitan Planning Strategy, and RDA Committees operations provides a firm basis to identify new value creation or optimising opportunities.  This optimisation is also an opportunity to address share population growth and decline imbalances.  Unlike higher levels of government, there are regional opportunities and roles but no assigned resources. Optimisation –”the pointy end of the rocket”

2012 Winning Communities Inc Optimisation -considerations  What do we understand about value creation?  Where are the key opportunities for value creation in a regional setting?  How do we prioritise these opportunities?  How do we engage councils and councillors on these priorities?  How do we organise to structure and resource the delivery of these opportunities?

2012 Winning Communities Inc Manage the Change Common Understanding of Current Reality Shared Vision & Aspirations Working across boundaries will require cultural change Helping shape community vision and setting a course to achieve it and close the gaps and barriers Working together to plan for anticipated change Collaboration across communities, regions and levels of government Understanding of roles and responsibilities of diverse stakeholders and partners Leveraging from strategic interdependencies Helping shape community vision and setting a course to achieve it and close the gaps and barriers Working together to plan for anticipated change Collaboration across communities, regions and levels of government Understanding of roles and responsibilities of diverse stakeholders and partners Leveraging from strategic interdependencies Value added solutions Identify “win-win” Solutions

2012 Winning Communities Inc We need to prioritise collaborative opportunities Deficient Behind Competitors CompetitiveOptimal Ahead of CompetitorsIn line with Competitors Critical Significant Low Status of Activity Relative Value to Councils

2012 Winning Communities Inc In a nutshell ---  Local Government needs to find new ways to work smarter and do more with less.  Regional collaboration offers key opportunities to do this.  Recent development of regional structures and initiatives has created the ideal momentum for this.  In a cash constrained environment the call for a new approach to achieving economies of scale through shared services is overwhelming.  Shared services should also develop added capabilities.  The focus on shared services should not mask the opportunity to source added capabilities and optimise through collaboration.  Optimisation and value creation through collaboration can create needed added wealth and investment –critical to council sustainability.  Council plans should reflect the importance of the regional collaboration.