Lessons from Balranald Shire Council Inquiry

by | Feb 28, 2020

The dismissal of a local council by the Minister of Local Government does not happen very often. When it does occur, it has significant ramifications for the council and its community. It is also an opportunity for other councils to learn from what has gone wrong and how they can improve governance practices. In this article, we reflect on the lessons that might be learnt from the recent decision of the Minister for Local Government to dismiss the elected council of Balranald Shire Council and appoint an administrator for four years.

Lesson 1: The sacking of a council does not happen out of the blue

Taking time to read the lengthy inquiry report, it is clear that a decision to dismiss an elected council and appoint an administrator is never done lightly. And it is not something that happens out of the blue.

In the case of Balranald, there was a considerable history of complaints and issues raised with the Office of Local Government (OLG) going back seven years. During this time, there were multiple matters investigated or referred to the OLG for action. This ultimately culminated in the inquiry and then the decision by the Minister.

In times of turmoil, communities often call for this type of intervention by the OLG or the Minister. However, it is unrealistic to think the OLG or the Minister will intervene without first giving the council an opportunity to improve on its own. The sacking of a council is usually the last resort after other avenues have been exhausted.

Lesson 2:  Poor financial results can mask deeper cultural issues

The initial enquiries into Balranald Shire Council centred on its financial sustainability and in particular, its asset management. Whilst this was a primary focus of OLG enquiries, the financial performance of Council turned out to be a symptom of deeper cultural issues within the organisation. For example, lack of respect towards staff, poor morale, reluctance to make tough decisions, unclear strategic direction and inadequate communication with the community. These were all contributing factors which impacted upon the effective governance of Council and, ultimately its financial position.

This serves as a reminder that where there are poor financial results, you may need to look behind these results to unmask deeper cultural issues. These underlying factors need to be fixed so that the financial bottom line can too.

Lesson 3: Strategic matters should be the core focus for councillors

During the interventions by the OLG, it was noted that there was a lack of focus by the elected Council on setting the strategic direction. There was also a lack of understanding that councillors have a strategic, rather than operational, role. This confusion was evident on two levels – both in several Council decisions and then separately in the actions of specific councillors. This caused several issues including ongoing conflict with Council staff and difficulties in the implementation of Council decisions.

The lesson is that councillors should focus on their strategic role and setting the direction of Council. The operational matters should be left to Council staff. Councillors must also accept this fact and leave it to the General Manager to implement decisions.

Lesson 4: Strong and effective leadership includes making difficult and contentious decisions

The inquiry report observed the tendency of the elected Council to make “knee-jerk” decisions and flip flop on decision making. Overall, the Council did not demonstrate strong and effective leadership when considering contentious issues, contrary to the guiding principles in the Local Government Act 1993. There was also a tendency of councillors to “attempt to sheet home the responsibility to staff”. There was a cost to this reactive decision making and indecision – a high turn over of staff and low staff morale and a loss of community confidence.

When governing, councillors should remember that they have been elected to make decisions. They should not shy away from making hard decisions. After all, this is why councillors are elected!

Lesson 5: Healthy debate in the Chamber is essential for democracy

Under the Local Government Act 1993, councillors must be ‘active and contributing’ members of the governing body. In the case of Balranald Shire Council, some councillors were not active contributors to the debate in the Chamber, with a small minority dominating the meetings. A lack of inclusiveness and robustness in the debate can lead to poor outcomes and can reduce the legitimacy of the decision.

When this is occurring, it can also be a sign that there is a power imbalance within the governing body. This means some voices are not being adequately heard. A sign to take stock, check in on the the power imbalance and then take active steps to address it so that the elected council is functioning as a collective entity.

Lesson 6: One bad apple can spoil the bunch

The report highlighted that some of the issues at at Baranald Shire Council could be attributed to the conduct of certain individual Councillors. In the case of interactions with Council staff, one councillor was the key contributor, with other councillors powerless to prevent this behaviour. On some isolated occasions, the inquiry noted that one or two other councillors encouraged this poor behaviour. In this sense, it was a minority of councillors doing the wrong thing that undid the whole council.

The outcome of the inquiry confirms this kind of culture is not an acceptable way of governing. It also highlights the importance of establishing a good culture of the elected body from the beginning. A good culture is one where Individual councillors are able to confront poor behaviour when they see it happening and know that consequences will follow if this behaviour is not addressed.

Lesson 7: Meetings should not be closed just because a decision is difficult

The report found that the Council tended to close meetings when difficult matters were under consideration and often without proper grounds under the Local Government Act 1993. Sixteen Council meetings were examined in the report, all of which were closed to the public without proper grounds under the Local Government Act 1993. The report highlighted that all councillors and the Mayor must understand what constitutes proper grounds to close a meeting and correctly apply the requirements of the Act and the Code of Meeting Practice. Council staff also need to properly understand the reasons when a meeting can legitimately be closed for confidential reasons.

Ultimately, this approach deprived the community of information about these decisions. And, in turn, fed the decline in community confidence in Council. It is a reminder that transparency is critical for legitimate decision making, and without it, suspicion and mistrust is likely to grow.

Lesson 8: Staff have a right to a positive and safe work environment

The inquiry noted that over the past seven years, there had been four General Managers at the Council. All of which were impacted in some way by the events that transpired  – often in a deeply personal way. Many staff were also directly and personally impacted by the events at the Council.

The inquiry found that “the Council has failed to provide a consultative and supporting working environment for its staff as required by s8A(1)(i) LG Act”. Whilst this was caused by a small number of councillors, it had continued over several years without effective intervention of by the elected body.

The upshot of this finding is that councillors are responsible for creating a positive and safe work environment for Council staff. This responsibility should be taken seriously. A positive interaction between Councillors and Council staff is essential for the effective operation of any council, and councillors have a duty to achieve this.

Lesson 9: Conflict and disharmony is a costly way to govern

The ongoing dysfunction of the elected council had significant impacts on everyone involved including senior management. One General Manager noted that “it was one the most stressful periods of his life” working in that environment. Another stated that his mental health was suffering due to the situation.

Negative sentiment in the community about a council also ultimately impacts on the staff. In the worst-case scenario, and particularly in smaller regional communities, it can lead to the breakdown in personal relationships.

It is also a very costly way to govern leading to low morale, unresolved conflict, poor performance and high staff turnover, making it hard to recruit and retain talent. Overall, this is not an effective way to govern.

Lesson 10: Councils exist to serve their communities

Finally, the inquiry recognised that Council did not adequately consult or communicate with its community. As noted earlier, it also had a culture of closing meetings to the public when making difficult decisions. This lack of transparency and availability of information resulted in an estranged community that ultimately lost confidence in the Council.

Put simply, a council cannot effectively govern without the confidence of the community. A loss of standing in the community negatively impacts upon staff, which, in turns, erodes morale and the overall performance of council. And so, the never-ending cycle of dysfunction and mistrust continues.

In summary …

Wrapping up, there are many lessons to be learnt from the recent dismissal of Balranald Shire Council which can be applied to improve the governing of other councils. Most importantly, councils should never lose sight of the fact that they exist to serve their communities and that the elected council is to work collectively for the benefit of that community.

If you would like more information, or to discuss further, please contact Emma:  

Emma Broomfield Director Governance & Mediation

Emma Broomfield

Director - Governance and Mediation

  0421 180 881

E   emma@localeconsulting.com.au

 

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