In June 2016 the NSW State Government released the proposed model of “Joint Organisations” (JOs) which have been piloted over the last 18 months. The creation of JOs is part of the Government’s wider reform agenda in the local government sector which includes local council amalgamations and is part of the drive to make regional NSW stronger. More recently, in September 2016, the Government released the proposed boundaries for JOs. We have reviewed the proposed JO model and boundaries, and provide some views in this article.
Proposed Joint Organisations Model
The model proposed by the Government is one that aims to provide a platform for local councils and the State Government to work co-operatively on regional level issues – that is effectively bridging the gap between local and State Government. The key aspects of the JO model include:
- JOs will be a separate legal entity under the Local Government Act 1993, just like councils. This means JOs will be able to enter into contracts, employ staff and tender for work
- JOs will have core functions associated with strategic planning, intergovernmental collaboration and regional leadership which will also be embedded in the Local Government Act 1993
- JOs will have optional functions to be determined on the needs of each JO. This could include shared service arrangements.
- JOs will have the option of becoming involved in other areas that have common interest to the councils involved
- JOs will have a board made up of council mayors as well as appointing its own Chair. Additional councillors may also be appointed, but always with equal numbers between the JO members
- Seed funding will be provided by the State Government, but the JOs will ultimately need to generate their own income, logically from their council partners
- JOs will be able to create their own corporations or other entities to carry out optional functions such as shared service delivery
It is proposed that it will be compulsory for councils to be members of the relevant JO and the State Government will have a seat at the table by virtue of being an associate member. This is different to the current voluntary nature of many regional partnerships and collaborative arrangements such as ROCs.
Proposed boundaries for Joint Organisations
In the discussion paper about the proposed boundaries for JOs, the government has listed a number of criteria to be used to determine the boundaries. These have changed slightly since the proposed model was announced. Based on these criteria, it is proposed to create 11 JOs across NSW. This excludes the Far West where separate regional arrangements are being developed.
Interestingly, these proposed boundaries do not match the boundaries of the suite of regional plans recently prepared by the Department of Planning and Environment. For example, the North Coast Regional Plan encompasses the proposed Northern Rivers and North Coast JOs as well as a small portion of proposed Hunter JO. Presumably, the proposed JO boundaries are based on smaller catchment areas than the regional plans as there will still be sufficient scale and capacity for the JOs to gain benefits whilst keeping a focus on regional needs and priorities. It also reflects the intention that JOs will not be the platform for developing a new and detailed regional strategic plan. Rather the focus will be on collating regional priorities across a range of areas which are reflected in existing strategies and plans such as local councils community strategic plans.
The Government has stated that the final JO boundary regions will be decided after the conclusion of the council merger process and feedback from councils.
Our thoughts on Joint Organisations
Whilst there are obvious theoretical advantages to the JO model of sharing service obligations and providing co-ordination to regional planning, there are some concerns that the JOs could be yet another quasi-government organisation whose responsibilities and activities are crossing over between local and State Government without a clear delineation. One may even argue that this is yet more cost shifting as the State forces these entities to be the responsibility of local government who will also likely become responsible for their funding on an ongoing basis.
However all that said, the model is a good idea and provided that it can be operated within a clear context of responsibility and councils can “let go” of control in some of those core areas, there are great opportunities to create efficiencies for regional NSW. In particular the JO could be a vehicle to combine similar business units within member councils to give them the size and capacity to have better commercial opportunities – for example areas like cemeteries which are increasingly under competitive pressure from the private sector. Areas such as procurement could also be big winners, along with infrastructure delivery teams where workforces can be split across much larger capital budgets.
Locale Consulting works with a wide variety of council business units and understands the pressures on many to create efficiencies time and time again. We can help you to undertake strategic planning for your teams and to articulate directions that can respond to opportunities that are created by legislative change – such as JOs.
Our team includes highly qualified and experienced staff with expertise in regional issues. For more information about our strategy and policy services, please contact: