Lesson for Aucklanders: Consultants say don’t believe consultants
In his latest newsletter, Owen McShane points to a crowd called the Cordillera Institute, “dedicated to promoting achievement in Local Government” – which sounds rather unpromising to me, unless by “achievement” is meant good things like “immediate redundancy.”
Nonetheless, the Cordillera Institute publishes a regular newsletter “read by municipal leaders on four continents” that Owen recommends, particularly the latest issue which “ focuses on the issue of local government mergers – or amalgamations.”
“We found the paragraph "Why the Difference between Predictions and Reality?" particularly interesting,” says Owen using the Royal ‘We,’ “and certainly provides some ‘lessons to be learned.’ The last paragraph – The Bottom Line – also seems to be packed full of common sense,” he says. Here then, for supporters of Auckland’s amalgamation of bureaucrats, are the common sense lessons Owen mentions. Here’s the first paragraph:
Why the Difference Between Projections and Reality?
In theory at least, it would seem that the economies of scale and their resulting savings should be there. And, there have been many studies produced by reputable firms which project significant savings if mergers occur. The only problem is that these projected savings never seem to materialize. This is not a slap at the consultants who did the studies. As a former consultant myself, I understand how an exhaustive study that showed potential annual savings of $400 million could be used by others to promote a merger which, in fact, resulted in no savings. And, it generated transition costs which are said to have exceeded the amount of those projected savings. That example is the 1998 Toronto amalgamation. The reason for the 180 degree difference between the projection and the actual is the product of the decisions made by those – both elected and employed – charged with mandating the merger and those charged with carrying it out. Cost-benefit analyses are rarely able to quantify this factor. Nor do most terms of reference given to consultants even request that input. So, the most comprehensive and diligent studies can be rendered valueless if policy-makers and central planners follow a different script. In Issue 01.26, there are more explanations of why municipal mergers have failed to measure up. [You can read the summary of that commentary here.]
There’s a very good lesson right there: when a consultant says don’t believe consultants, you know that for once the consultant might know what they’re talking about.
Anyway, here’s the second paragraph mentioned:
The Bottom Line
Just because mergers have failed to live up to their billings doesn't mean that we should give up trying other ways to achieve economies of scale. The economies which seem to have eluded amalgamations are much more likely to be realized by sharing services and by other means of inter-municipal co-operation -- as long as these arrangements stop short of political union.
At this stage you might be thinking something like, “so what’s the point of political union then?” and if you are I will enthusiastically join with you in saying you might well have a point. A very good point.
There’s no hope at all that the sophomoric fantasy of “taking power permanently away from the left,” which seems to be the wet dream of so many supporters.
There’s no plan to remove from the councils the “power of general competence” that minister Sandra Lee gave them to turbo-charge your rates bils.
Mayoral font-runner John Banks has already said he expects few staff to lose their paid sinecures.
And Rodney Hide has just today promised there is “no intention to privatise any asset as part of these reforms.”
So what the hell is the point? While we might all hope that both these gentlemen are lying, as gentlemen in their profession are wont to do, we also have increasing compelling evidence that no local government amalgamation anywhere has achieved anything except higher rates for residents and increasing bureaucratisation of the centre.
So really, what the hell is the point? As I’ve said before (and John Carter now appears to concede) there's nothing "super" about the Auckland super city.
Governed by ego-driven noddies.
A boot camp for left-wing politicians.
Absolutism limited only by inefficiency.
We don't need council expanded, we urgently need it contained. We don't need more central planning: we urgently need less. We don't need to make it easier for uber-planners to 'plan' the city, we need much greater freedom so we can plan our own lives for ourselves.
There endeth the lesson.