A new paradigm for local government?

Local Government Conference; Christchurch, 10 July 2000

Let’s start with subsidiarity. Only the French could have concocted such a barbaric word; only Anglo-Saxons could have adopted it with enthusiasm.

Subsidiarity means taking decisions and carrying out actions at the lowest practicable level of government. This concept is a reaction against the twentieth century centralisation of power and activity in the hands of sprawling central governments. New Zealand did not escape that centralising tendency: indeed, we made centralisation an art form. And now we are not escaping the decentralising reaction.

Subsidiarity has gathered interest and support from thinkers and politicians of both the right and the left. The right sees subsidiarity as an ally in the fight against big government. The left sees in it a potential rescuer of the ideal of social justice from failed or flawed big-government social policy programmes. We happen to have a government of the left, so it is that perspective which prevails in the meantime.

But what does it mean to this government? That depends whom you talk to. In its early actions this government has been going in both directions at once. That is because a large part of this year’s agenda is to undo things that were done in the 1990s.

So schools are being re-centralised through the removal of bulk-funding of teachers’ salaries. Among other concerns, Labour and the Alliance fear that bulk-funding is a precursor to privatisation of the school system. A block grant could theoretically go to any school, public, cooperative, alternative or private – indeed, when he was Minister of Education, Lockwood Smith proposed exactly that in due course. But the revocation of bulk-funding is the opposite of subsidiarity: school trusts and principals are obviously not seen as an acceptable level of government to make decisions about staffing.

Health funding is being re-centralised by the absorption of the Health Funding Authority into the Ministry of Health. But there will be a small measure of lower-level governance through the part-elected district health boards. And there will be population-based bulk funding of GPs groups to deliver government-designated priority primary services.

This is taken a step further with Maori. Labour has made “closing the gaps” between Maori and Pacific islanders and the rest of the population its “flagship” programme. The Admiral of the Fleet herself heads the cabinet committee dedicated to this herculean task. She will not get quick results. Part of her challenge is that any general programme which lifts the achievement of underachieving Maori and Pacific islanders will also inescapably lift the achievement of underachievers in other ethnic groups. So the Labour-Alliance government intends to extend an approach begun under the National government. It will fund Maori organisations to deliver health and some other social services, in the hope that they will succeed where mainstream agencies have failed. And it says it will bulk-fund them, not merely contract them to carry out narrowly prescribed tasks. So they will have more discretion over how and what they deliver to their beneficiaries. That will require, as the Prime Minister has noted, convincing evidence of mandate and rigorous financial accountability. She does not want Richard Prebble rampant on Waipareira-hunts.

Now meet Steve Maharey. He has read the books propounding a new social democracy. He has read about “social entrepreneurs”, bright sparks with ideas of how to make life better in their localities – rather as business entrepreneurs come up with ideas for making money. He wants to use these entrepreneurs’ ideas and energies to make social assistance more effective, to get more bangs for the taxpayers’ bucks, particularly in his portfolios of welfare and employment. And to do that he seeks collaboration and cooperation. He is in charge of developing a “framework” for central government’s relationship with voluntary agencies – non-governmental organisations (NGOs) – across a range of portfolios, including welfare, disability, environment, international aid and sport.

This brings us to a big word in this government’s lexicon: partnership. What Steve Maharey wants with NGOs is a relationship of partners. As he puts it, this is about “people taking leadership at the local level and government providing partnership, financially and in terms of resources, to enable them to do it. People in Christchurch, for example, might suggest an idea to deal with truancy from schools and ask the government to help them make that happen – but they do it, not the government”. He contrasts this with the old “top-down approach” which, he says, can no longer give the government what it wants and also with the “bottom-up approach, with locals telling you what they want and then the government taking it away and doing it” which he says has “also had its day”.

Social democrats used to talk of collective action, meaning by that the government acting on behalf of the people and providing an identical service for everyone through what became in effect assembly-line schools, hospitals, state houses and benefits.

But this “factory state” died along with one-size-fits-all mass production. Consumer products and services these days are highly diversified and customised – telecommunications is an excellent example. One-size-fits-all government, run by all-knowing Wellington bureaucrats, doesn’t wash with consumers of government services any more and in any case often isn’t effective. If social democracy is to win back anything like the legitimacy it had 50 or 60 years ago, it has to find new mechanisms.

Which brings us to local government.

The parties of the right in Wellington despise local government. They see it as inefficient, querulous, obstructive and expensive. Running alongside the original proposal to corporatise the roads was an expectation that the more local and regional authorities’ services that were commercialised or provided by some other authority, the less meddlesome and troublesome local government would be.

Their point is easy to see. The whole of this country’s population would fit into any one of about 50 cities round the world. Only a tinpot defence force and a gossamer-thin diplomatic enterprise clothe the nakedness of what is in effect little more than a glorified local government in Wellington. The central government in this country does a lot of the things that are done by local or regional government in other countries, even in countries of a similar size such as Finland or Denmark: education, health, housing for the poor. Voter turnouts in local elections are low, the issues ill-defined and coalitions changeable; there is not enough at stake to engender serious party contests on which voters can take sides and give mandates. Given all that, what is the point of local governments except to be puffed up community councils to make representations to Wellington – which can then ignore them as “unrepresentative”?

The point for the left is different. Partnership is a means of salvaging a political creed diminished by three decades of losing arguments. And localness is a way to lick globalisation. (Also, the Greens think localness is next to godliness and the Greens are an inescapable factor in any left government’s electoral and governmental equations.) Put localness and partnership together and you have the makings of a political idea that sounds new and cuddly – in short, a “new paradigm”.

I don’t need to tell you what your side of that partnership bargain is. Labour’s manifesto last year spelt it out. You are to come up with ideas and the energy to make them work – in employment generation, local economic development, tourism, community safety and security, sustainable environmental development, culture and arts development, sport, fitness and leisure, health promotion and service advocacy and coordination of public transport services. Jim Anderton is coming round, his “jobs machine” thirsty for fuel. Steve Maharey wants a hand with social problems that defy national solutions. Helen Clark thinks the arts can revitalise the regions. Phil Goff and George Hawkins want brainwaves to beat the crime wave.

The government’s side of the bargain is to provide resources, funding and other means of facilitation. Part of that function is to provide you with the legislative room to act as you see fit on your citizens’ behalf – the “power of general competence” in place of the present ultra-prescriptive thicket of do’s and don’ts.

At the summit in March between your council and ministers your representatives were glowing like kids at a Harry Potter sleepover or a McDonalds birthday party. At last a government was taking you seriously. A work programme was laid down. This was partnership in action.

But wait a minute. The second of the “about-six-monthly” summits is in November, which is eight months after March, not six.

Next, the reshaping of the Local Government Act has been very slow to get started. This was a high priority in Labour’s pre-election policy because it incorporated the power of general competence. The lack of progress has been one of the government’s early failures. It hasn’t helped that some ministers have real doubts about giving general competence to “Tory” councils.

The rewrites of the Rating Powers Act and the Local Elections and Polls Act also seem to be proceeding at a gentle pace (though Rod Donald is trying to inject some urgency into the optional STV proposal). Moreover, if the government is serious about giving local government more scope to act, it would stop insisting in a big-sister way that it will not pay rates. That is a reminder that even in the new Wellington you are still often seen as a subordinate adjunct to central government – subject to its checks, balances, prejudices and sudden excitements – not autonomous authorities with a mandate from your populations.

Here we should remind ourselves of where we came in. Subsidiarity, remember, is pushing decisions down to the lowest practicable level of government at which they can be taken. Partnership, especially coupled with localness, can mean that – but only if it amounts to power-sharing. Without power-sharing, partnership might turn out to be a substitute for subsidiarity, not a synonym. And the danger then for lower-level government is that it could end up coopted rather than freed. What, then, does the power of general competence really mean?

The Labour-Alliance government’s style does not lend itself readily to power-sharing. It is a very controlling style, with power highly centralised in the Prime Minister. That is not consistent with relaxing the reins on local government as implied by general competence. Rather, it suggests a government that will be a “partner” in what it wants to do and wants you to do, rather than in the fullest sense of the word.

In one sense, if I may be permitted a personal digression, some heavy-handed intervention by the central government would be appropriate. That is in the administration of the Resource Management Act. The behaviour of my council towards people in my street in the past two years has been outrageous, to the point where I have begun to see why the ACT party nurtures intense antipathy to the Resource Management Act. The present government is disinclined to take up even the timid reforming steps proposed by Simon Upton. I shall watch with interest how far citizens’ tolerance can be stretched by arrogant local bureaucracies – whether in the end your failure as councillors to insist they act sensibly and with respect for private property will precipitate the destruction of an on-the-whole well-intentioned and constructive law.

I might also note, now that I have digressed into the RMA, that the other big idea of this government, besides partnership, is “first-world greenness”. Conservation and the environment are central to the government’s thinking and ambitions. Clean-green is seen as a defining characteristic of a first-world country. A green cast pervades vast tracts of the pre-election policy. If you tap into that you will find a very enthusiastic partner. The same will go for initiatives that feed into the Prime Minister’s nation-building ambitions for the arts and culture. But those are other stories for another day.

There is another barrier to partnership: the central bureaucracy. Central bureaucrats mostly think local government incompetent or inadequate or too fragmented to get much useful done. There is some truth in this view. But there is also some unfounded prejudice in it and their view is not shared by the Prime Minister. Central bureaucrats are not naturally predisposed to partnership with people they see as their juniors and/or inferiors and are proving slow to imbibe the spirit of the government’s partnership enthusiasm.

It doesn’t help that the central bureaucracy is only slowly getting alongside the cabinet. After nine years in opposition, both Labour and Alliance ministers arrived in the Beehive mistrustful of bureaucrats who they think adopted the rightwing ideology which they want to supplant or at least modify. The ministers also arrived with a pile of mandated commitments on which they did not need or want contestable advice. At most the ministers wanted advice on implementation and beyond that they wanted the bureaucracy just to carry out orders at arm’s length.

The consequence is that the central bureaucracy is taking longer than after any change of government since 1972 to get the hang of the new government and to be accepted as partners by ministers in policy development. Until that relationship develops fully – which may take as long as the rest of this year in some departments and with some ministers – attempts to build the partnership will be slowed and even thwarted.

An additional factor is that the central bureaucracy has been squeezed so much in the name of “efficiency” and an illusory “productivity” that the analytical and managerial capacity of most departments has been damaged and in some cases severely damaged. Under the previous government this was partly made good by expensive consultants but the new government has applied a self-denying ordinance to such advice, partly because of the price (which in some cases it has been able to screw down) and partly because it believes outside consultants’ is coming from the wrong perspective (that is, is imbued with the philosophy of the 1980s and 1990s revolution). When the government does begin to look to the bureaucracy for innovative ideas, it will find that the best brains have largely fled to higher salaries in the private sector and increasingly are being squeezed offshore because of the freeze here.

One consequence of the assault on the core public service has been that local government advice is inadequately resourced. That partly accounts for Sandra Lee’s slow progress on the legislation mentioned earlier. Ms Lee is not one of the cabinet’s leading lights and she came to the job much affected by unpleasant experiences as the Waiheke representative on the Auckland City Council. But it might have helped move things along if there had been a strong, well-informed officials group. The good news for you is that that is changing: Sandra Lee got some money in the budget to beef up the local government team.

I think it doesn’t help, too, that the work programme agreed in March is so expansive and ambitious. It had to be, of course, if a real change is to be made in the relationship. But it imposes an immense burden on you. Ministers will need constant reminding and bombardment with leading advice from your side of the fence to keep the work programme moving. That is an awesome challenge you have set your national officers and head office and will need, it seems to me, considerable energy and resources if you are to hold your end up and create a real partnership in the spirit of subsidiarity – that is, a “new paradigm” – and not end up with a top-down jackup.

Which leads me to a couple of observations about your role in constructing this new paradigm.

My first is that there seems not to be a unified message from you to the central government. That, at least, is how I hear it from the other side of the fence. There is no coherence, for example, on what “general competence” means or should mean or even that it is desirable. Some think it means a legal obligation to promote the economic, social and environmental wellbeing of communities. Others share the Prime Minister’s preference for a permissive rather than a mandated arrangement. When those high in the government hear that, for some of you, the “power” of general competence amounts to something even less, such as “enabling” councils to do things, they use dismissive words like “pussyfooting”.

Disunity among local councils is a ready rationale for inaction by those ministers who are lukewarm about partnership and/or besieged by interest groups who do have clear messages.

Do you want the new paradigm, a real partnership, or not? Unless you want it a lot, develop a unified approach to ministers to push it and put real energy into it, partnership will at most be developed on the central government’s terms and patchily at that. There are wide variations between ministers’ enthusiasm for a partnership and ability to develop one.

My second observation is that you are dealing with a very busy government. Its national agenda is large and the Prime Minister wants speed. She chastises weak or befuddled ministers in public, which is a warning to any interest groups and even “partners” who turn out to be “pussyfooters”. The crowded agenda accounts for some of the unevenness in progress on your work programme agreed in March.

But even amid this maelstrom of buzzing in the Beehive you are getting more of a hearing than from previous governments. One measure is the large number of ministers and MPs who are fronting to this conference. The Prime Minister has broken her holiday to come – and this is a Prime Minister who holds holidays sacrosanct. To an uninformed outsider like me that looks like a desire for make a new partnership and make it work.

How genuine is the desire? I have noted earlier the controlling, centralising inclination. I have suggested that, deep down, these are not new social democrats but old ones in skimpy trendy clothing, that the partnership will be on the central government’s terms, with local government still as handmaiden in the final analysis, even if with a bigger voice in Wellington. And I have suggested that if there is to be a new paradigm, these old-new social democrats will need some guidance and some pushing.

But I do think that if you provide that guidance and pushing, there will be a genuine partnership and it might well over time develop into the new paradigm I have suggested. I think the Prime Minister is genuine about a partnership and also genuine in wanting it to come from both sides. She sees power as more diffused in the globalised age and central government as strengthened by a partnership in which local government takes “ownership” of both problems and solutions in its communities, with the central government acting as a facilitator and enabler.

I am on balance inclined to take her at her word, despite her controlling style of prime ministership. Partnership is an embedded theme in her rhetoric and she applies it not just to local government but also to NGOs, Maori and, yes, business.

Old-style social democracy was a top-down business, which won’t work in the 2000s. The neoliberalism which swept old-style social democracy aside in 1984 saw the world as made up of atomised units, individual people and firms all making their own way, left lots of space by a benignly retreating government. But the majority of voters has never believed that the retreat was benign, even if business did. Maybe “partnership” is a workable middle path.

I say “maybe” because I have no way of judging. Business’s reaction to this government suggests any real partnership between Wellington and business is a very long way off. NGOs and the government will take years, maybe a decade, to develop rules of engagement that function efficiently. With Maori there are seriously complex Treaty matters to be resolved if real partnership is to be established – and the route is through a political minefield, as ACT has been making us all aware.

And with local government? I am not sure you all want a real partnership and want to do the hard yards to get it, keep it and make it work. A real partnership involves a degree of power-sharing that requires local government to buy into national issues. To be effective, it may at some point require some revenue-sharing, which overseas experience shows is scary. And the power-sharing and revenue-sharing might have to be not just with central government but with NGOs, Maori and business, which is even scarier.

If we get that point we will indeed be amidst a new paradigm. Whether we will get to that point, however, or just settle for one of this country’s famous muddle-throughs to some halfway hotchpotch that can be called partnership but is really cooption, I don’t know.

One factor is what the parties of the right do. The modernisers of the National party, led by Bill English, are open to new ideas and might decide to go with the notion of partnership and coopt it to their own rhetorical and policy uses. I see no sign of that yet but National is a pragmatic party again now. Some version of partnership with local entities, including local government, offers one possible means to recreate the intricate and extensive webs of connection which sustained National in office through the 1950s and 1960s. So it is just possible the notion might not die when this government does.

I shall watch with great interest.