In amongst the urgency and sheer hard work of exercising local government functions, it can be easy to forget how important it is for Councils to effectively delegate their decision-making powers.
Failing to effectively delegate powers can put whole decision-making processes at risk of challenge. Legal proceedings, effective contracts and other agreements and reputation can all be at stake.
Making Decisions
As a “first principle”, a Council decision is made by a resolution of Council.
Section 257 of the Local Government Act 2009 (“LG Act”) allows Council to delegate its powers (by resolution) to the Mayor, Chief Executive Officer, standing committee or joint standing committee (or a chairperson of one of those committees) or another local government for the purposes of a joint government activity.
However, Council cannot delegate any powers that are said to be required to be made by Council by resolution.
Typically, most Council powers are delegated to Council’s CEO under section 257 of the LG Act. However, Council also needs to have regard to section 27A of the Acts Interpretation Act 1954 when making delegations, which, among other things, requires the following:
- The delegation must be evidenced by writing signed by a person authorised by Council. Typically this takes the form of an instrument of delegation signed by the Mayor (which can then form part of the register of delegations that the CEO must keep pursuant to section 260 of the LG Act);
- The delegation can be subject to conditions, but a delegation cannot fetter the delegate’s discretion when exercising that decision-making function. For example, a delegation cannot be given to the CEO to refuse a development approval, but not approve the development approval.
- However, while the delegate’s discretion cannot be fettered in this way, Council can impose a limit on the exercise of the delegation. For example, Council can delegate to the CEO the power to settle a claim against Council up to a value of $100,000.
In most Councils, the CEO will then delegate their power to officers of Council. This is done under section 259 of the LG Act. In delegating CEO powers, the CEO can:
- Delegate to an appropriately qualified employee or contractor;
- Delegate to a position or office – eg, delegate to the person occupying the office of Director of Corporate Services.
Tips and Tricks
All delegations should be clear about the nature of the power being delegated. If the power being delegated is the power to negotiate an arrangement, it should be clear how far that delegation extends.
This does not mean a delegation cannot be general – for example, a delegation can be made to enter into particular contracts of a defined nature. However, the scope of the delegation must be unambiguous so that the delegate does not inadvertently make decisions that have not in fact been delegated to them (or fail to make decisions that have been).
Consistently with the need to ensure that everyone – delegator and delegate – is on the same page, Council should ensure that all delegates are informed of their delegations and trained as to the scope of them. That might seem like an obvious point, but there can sometimes be issues with officers exercising powers they do not have, or failing to exercise powers they do have because they did not know they had them.
Councils should also bear in mind that:
- A delegation allows the power to be exercised by the delegate, but does not prevent the delegator from exercising the power. Typically the delegator does not exercise the power as well – the purpose of the delegation is for someone other than the delegator to make the decision – but a power delegated by Council to the CEO, and delegated from the CEO to a Director, can be exercised by three decision-makers – Council, the CEO and the Director.
The obvious practical problem is the part performance of a delegated power and inconsistent approaches. If Council wants to “take back” the power, it is better off revoking any delegations.
- A decision of a delegate is taken to be a decision of the delegator, and the delegator remains responsible for ensuring the power is properly exercised. The buck stops with Council!
- A related point is that Council cannot delegate a power to make a decision subject to Council ratifying or approving that decision. Because a decision of a delegate is considered to be a decision of Council, once the delegate makes the decision it is binding and enforceable on the Council.
- Delegations given by Council must be made by resolution. A difficult scenario arises when the wording of a delegation can contain confidential or sensitive information – take, for example, a delegation to settle a claim against Council for a particular amount. Council will not want to tip its hand as to the upper limit of its negotiating strategy by publicly circulating a delegation that contains this detail, but Council is also required to only adopt substantive resolutions in open meetings. Real care needs to be taken when dealing with these types of delegations.
Summary
Delegations are one of the key aspects to ensuring that local government decision-making happens smoothly, and while making and implementing delegations is second nature to every council, they can sometimes fall by the wayside as a priority.
The knock-on consequences of ineffective delegations can be very significant for any local government, and will often be the first legal technical issue a lawyer on the other side of a council will look at when trying to poke holes in the council’s decision-making.
For further information on preparing and implementing delegations, please contact Julian Bodenmann in our Government Team.