Hunter Councils as a concept had its origins in the aftermath of the disastrous flood event of 1955 and the collective view of the councils of the day that, through joint strength and cooperation, the best deal for the residents of the Hunter from dealings with the State and Commonwealth Governments would be achieved.
To a substantial degree both formally and philosophically this “strength and cooperation” sentiment pervades all of the operations of the Hunter Councils group and is essentially our collective “reason for being”. How the “reason for being” is acted upon has however varied according to need and opportunity and, to a large degree, these factors have determined when and how our various corporate entities have been developed.
Hunter Councils Incorporated
Hunter Councils Incorporated (commonly known as “Inc”) is our longest established entity and is an incorporated association within the provisions of the Associations Incorporation Act 2009 (NSW).
For much of its history Hunter Councils Inc focused on regional discussion and cooperation. Important as these functions were (and are) Inc was in those days a small operation functioning in a very similar fashion to most other collectives of Councils within New South Wales.
In the mid to late 1990s and early 2000s, however, the focus of Hunter Councils Inc rapidly expanded.
The expansion of Inc was a direct consequence of a new Local Government Act, the push for “bigger and better” corporately managed councils, attendant amalgamation pressures, rising community expectations and constraints – such as rate capping – on the ability of councils to fund their operations.
While acknowledging that amalgamation of councils was a sometimes necessary and appropriate response – for example in the creation of Upper Hunter Shire Council and most recently MidCoast Council– local government in the Hunter determined that economies of scale and effectiveness could also be achieved – and potentially better achieved – through the creation of regionally shared capacity to address specific purposes.
Putting this another way, the Hunter began advocating for a focus on achieving scale and effectiveness by building the geographic scope of the services being delivered rather than a focus on building the size of the entity to receive them.
Arising from this region wide business units were established within Hunter Councils Inc to deliver initiatives on key council shared priorities such as environmental programs, staff training and the procurement of goods and services.
This was a pioneering step and one that has been emulated (and envied) throughout New South Wales and Australia as a whole.
Hunter Councils Ltd (now named Strategic Services Australia Ltd)
In 2004 a new corporate entity within the framework of the Commonwealth Corporations Act 2001 was created.
The new entity – then known as Hunter Councils Ltd – was formed to house a fully commercial operation (Hunter Records) designed in part to help member councils to address the requirements of a new Records Act and in part also to generate through sales to the wider public and private sectors profits that would help subsidise the wider activities of Hunter Councils and its member councils.
Land to enable Hunter Records to operate was purchased in the Thornton Business Park and a records repository constructed. From day one Hunter Records was required to act as a commercial operation and, while most member councils stored all or part of their paper records within the repository, no member council subsidisation was sought or given. Subsidisation during the start up phase was provided but it came from profits generated by the other Hunter Councils business units.
Substantial office space was also constructed alongside the repository to house and enable the growth of the business units within Hunter Councils Inc. These units acted as tenants of Hunter Councils Ltd.
The growth and transitioning of our businesses
As the principal businesses within Hunter Councils Inc – the Environment Division, the Local Government Training Institute (LGTI) and Regional Procurement – grew so too did their income streams and assets.
In 2008, and in response to the growth of the LGTI, land was purchased around the corner from the main Hunter Councils building and a fit for purpose training facility constructed. This property was bought in the name of Hunter Councils Inc.
From 2010 onwards increasing pressure was brought to bear by the State Government on the appropriateness of an incorporated association having multi-million dollar income streams and a very substantial property asset.
In response to this the Board of Hunter Councils Inc resolved to transition its commercial operations to Hunter Councils Ltd. This action and the emerging Joint Organisation reform process placated the Department of Fair Trading and effected the siting of the commercial operations in a more appropriate and defensible setting.
The strategy and advocacy role remained within Hunter Councils Inc as did those non-commercial functions that depended in large measure on grant funding (the Environment Division and our regional film and television office, Screen Hunter).
Local Government Legal
In 2012 – and in response to commercial opportunity, a desire to inject an “honest broker” into the sphere of legal advice to councils and a perception that better value for money could be achieved from council expenditure on legal services – an incorporated legal practice formally entitled Hunter Councils Legal Services Ltd but trading as Local Government Legal was formed.
Local Government Legal was required by the Legal Profession Act 2004 and the Legal Profession Regulation 2005 to be a separate corporate entity. It was therefore formed as a company limited by guarantee and as a wholly owned operation of Hunter Councils Ltd (which, in turn, is wholly owned by the member councils of Hunter Councils).
Initially cross-subsidised by the existing Hunter Councils business units – as had Hunter Records – Local Government Legal’s growth has been exponential and it now operates throughout the State offering expert, honest and plain English advice to councils at a highly discounted price to its commercial competitors.
Strategic Services Australia Ltd
In 2014 – and at the suggestion of the Office of Local Government – the name of Hunter Councils Ltd was changed to Strategic Services Australia Ltd. This change was motivated by two factors. The first was to remove any impediment to a change in the status of our Regional Procurement function and the second was to lessen the perception – particularly amongst our private sector customers – that our major commercial operations narrowly focused on local government operations.
It is likely for similar perception considerations (this time amongst our council clients beyond the Hunter) that the name of our legal service provider will be formalised as Local Government Legal.
The Joint Organisation Framework
The cumulative impact of the various changes to corporate structure within the Hunter Councils group was to effect a functional separation between the regional voice / regional advocacy / regional strategy roles and the commercial operation of our beyond region business units.
Beginning in in 2012 and accelerating over the next few years the NSW State Government turned its attention to major reform within the local government sector and, most particularly for our purposes, to the nature of cooperation and structure at a regional level.
Unashamedly borrowing from the Hunter Councils model and structure the State Government developed the concept of regional “Joint Organisations of Councils”.
In their current “pilot” form and in the intended legislation, the purposes of a Joint Organisation are to:
- Provide a forum for local councils and the State to work together to deliver regional priorities
- Help to connect local priorities from local council Community Strategic Plans with regional planning for growth, infrastructure and economic development
- Provide a means of delivering projects across council boundaries.
It is intended that Joint Organisations address these purposes through a series of mandated core functions. These functions include strategic planning and priority setting, intergovernmental collaboration, and regional leadership and advocacy.
Joint Organisations will also be able to undertake optional functions – such as service delivery and capacity building – will be enabled but not prescribed by the legislation. Joint Organisations will be able to select which of these functions, if any, they will carry out
The preferred Joint Organisation model
Hunter Councils was one of the pilots of the Joint Organisation model and provided ongoing support to the Office of Local Government and to other regional organisations of councils during the pilot period.
The State Government has been open in its preference for a model whereby the focus of the Joint Organisation is unambiguously on the mandated core functions of strategy, intergovernmental collaboration and leadership and advocacy. This approach is modelled on the framework existing within the Hunter Region and the Joint Organisation paradigm in broad measure seeks to replicate the perceived benefits of the Hunter’s separation of “regional and intergovernmental strategic voice” from matters of commercial service delivery.
Taking regional strategy and cooperation to a new level
In part as a response to the potential of the Joint Organisation model and in part as a response to commercial trends and opportunities the Boards of Hunter Councils determined in 2016 to explore the opportunity to cash in on some key investments in order to fund a major increase in strategic scale and capacity.
As a result the Hunter Records business was sold and negotiations are currently underway to sell and lease back part of our property in Bonville Avenue, Thornton.
Cumulatively these two transactions will generate almost $6 million which will result in the elimination of all external debt, the formalisation of an income stream for the Joint Organisation and the creation of a multi million dollar funding pool for regional initiatives.
This move will cement the Hunter Councils group’s positioning as the largest and best resourced local council run collective in Australia.