Some Evidence For Once

Thanks to Jeremy Mowe for drawing attention to a report ('Getting It Right: Structural Change in Perth Local Government') commissioned by the City of Subiaco by one of Australia's leading academics in the field of local government amalgamation.

http://subiaco.wa.gov.au/CityofSubiaco/media/City-of-Subiaco/Your-council/Local%20government%20reform/Getting-It-Right-Structural-Change-in-Perth-Local-Government-May-2014.pdf

The report concluded:

By far the main lesson which has emerged from this analysis is the fact that the processes underpinning amalgamation have a decisive effect on whether or not it has proven successful. In essence, where council mergers and boundary changes are forced upon local communities with minimal consultation and limited local community participation, this leads to ongoing bitterness and division in the affected local communities, which could have lasting effects, including ultimate de-amalgamation. 

Under the Local Government Act 1995, in Western Australia the LGAB is required to examine amalgamation/boundary change proposals in terms of nine criteria: ‘community of interests’;’ physical and topographic features’; demographic trends’; ‘economic factors’; ‘history of the area’; ‘transport and communications’; ‘matters affecting the viability of local governments’; the ‘effective delivery of services’; and ‘any other matters it considers relevant’. However, in the light of hard-won experience in other Australian local government systems which have had ill-conceived and expensive council amalgamations and – in some instances – de-amalgamations, it is evident that the LGAB criteria are not adequate. …the LGAB should also take into account additional criteria, including that proposed amalgamations must enjoy demonstrated local community backing through a poll, the transaction and transformation costs of amalgamation must be minimised, and potential sources of conflict must be eliminated as far as possible. 

Some interesting quotes from that report.

The most important of these policy lessons centres on demonstrating through polls, referenda, and other formal measures that strong support exists in affected local communities for any amalgamation proposal. If mergers are forced upon local communities, then amalgamation can fail with disastrous consequences. 

The bulk of empirical literature is decidedly sceptical on the efficacy of compulsory amalgamation in improving the performance of local government.

The claimed scale economies, cost savings and other pecuniary benefits purportedly flowing from amalgamations are largely illusory, with cost savings attached to only two of the ten main local government functions.

Hasty and poorly planned amalgamations, which do not involve adequate consultation, will result in poor outcomes and disaffected communities.

Well-organised grassroots campaigns can achieve significant outcomes, such as de-amalgamation.

Local residents everywhere resent having compulsory council consolidation forced upon them. People value ‘local voice’ and ‘local choice’ and are thus naturally unhappy when higher tiers of government arbitrarily impose forced amalgamation upon their communities.

A successful amalgamation (Onkaparinga in South Australia) ‘did not involve a significant overall reduction in councillor numbers, with the new council having 20 councillors initially in nine wards and a popularly elected Mayor’, and the result was ‘little change in the level of representation’. 

Given the astonishing ‘about face’ (on forced amalgamations) by the Queensland Government, the speed with which the Reform Commission process was completed, and the concomitantly constrained opportunities for community consultation, it is hardly surprising that the forced amalgamation program provoked a wave of public disquiet. 

Empirical evidence paints a depressing picture … pre-and post-amalgamation scale economies in Queensland showed that the compulsory merger program had increased the proportion of Queensland residents in councils operating with diseconomies of scale to 84%. Similarly, a Queensland Treasury Corporation analysis of the costs of amalgamation showed that the process had been far more costly than expected.

Structural change processes can have decisive positive effects, provided they are inclusive, participatory and voluntary. 

Policy makers should be mindful that amalgamating small councils (or parts of councils) with much larger and potentially dominant councils is likely to provoke political resistance to a merger from smaller neighbours, whose residents naturally fear ‘domination’ by the larger council. 

State governments would be wise to only support a proposed amalgamation and attendant boundary changes if it enjoyed a demonstrated degree of political support in the affected local communities prior to petitions and referenda.