Abstract
This case study focusses on performance monitoring of local government which is attracting greater attention from state agencies, regulators and the scholarly community. The chapter examines the case of New South Wales, Australia, which introduced performance monitoring for all councils in 2014 based on just seven financial ratios. This performance monitoring data was subsequently used to decide: (i) which councils would be forcibly amalgamated, (ii) which councils would gain access to cheaper finance, and (iii) the details of future improvement plans for councils. The first part of this chapter details the gaming which occurred as a result of the poor design of the 2014 performance monitoring framework whilst the second part explores solutions to the identified problems which formed part of a subsequent (council led project) in 2016 under the auspices of the Institute for Public Policy and Governance at the University of Technology Sydney.
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Notes
- 1.
Whilst nominally a ‘voluntary’ process, councils were directed that they must fill in an amalgamation proposal if they failed to meet all seven metrics in addition to the ill-defined ‘adequate scale and capacity’ criteria.
- 2.
In intercensal periods the Australian Bureau of Statistics (ABS) merely estimates population size and these estimates have been shown to contain errors of up to 15.2% (Drew and Dollery 2014b).
- 3.
The exception was the ‘efficiency’ ratio assessed over five years.
- 4.
It should be noted that we are merely borrowing from the conceptual framework of the fraud literature and in no way are trying to imply that fraud—rather than gaming—occurred.
- 5.
Although there remains the unlikely possibility that the public service in NSW is largely dominated by knaves.
- 6.
An example of this is the report in the Sydney Morning Herald that provocatively stated: ‘Sydney’s roads are getting better even without being fixed… according to the city’s councils, which have recently wiped from their balance sheets a billion dollars of liabilities such as run-down old roads, often without spending a cent’ (Robertson and Buckingham-Jones 2015).
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Ryan, R., Drew, J. (2019). Performance Monitoring in New South Wales Australia. In: de Vries, M.S., Nemec, J., Špaček, D. (eds) Performance-Based Budgeting in the Public Sector. Governance and Public Management. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-02077-4_3
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