A Critical Comment on the Analysis of Shared Services in the Queensland Local Government Association's 'Size, Shape and Sustainability' Program

Abstract

Recent national and state-based inquiries into the financial circumstances of Australian local councils have demonstrated unequivocally that many municipalities are in a parlous monetary state. This has inter alia shed severe doubt on the efficacy of recent forced amalgamation programs in several Australian local government jurisdictions and has stimulated the search for alternative methods of improving the operational efficiency of local councils in an effort to generate costs savings. While all these inquiries have recommended shared service institutional arrangements as the best alternative to amalgamation, only the now defunct Queensland Local Government Association's (2006) Size, Shape and Sustainability Program has provided a detailed analysis of the purported benefits of shared services. In this paper, we show that the Size, Shape and Sustainability Report and its main supporting study are fraught with errors and misleading interpretations of available evidence on shared services and should thus be treated with great caution in future by local government policymakers.