SPMS had been promoted since the 1960s for the control of the public sectors of many western governments especially the USA and the UK (Carter, Klein and Day, 1992). The position here is that SPMS were mobilised as a technology of government in the context of a liberal thinking which promotes individual freedom with the state not wanting to appear too intrusive though desiring control. The mechanisms of SPMS would provide a technology which would confer autonomy on local authorities while at the same time maintaining
control over their affairs. SPMS would do so by delineating objectives and activities to achieve these objectives, assigning them to specific individuals and authorities and enabling surveillance of these bodies on the basis of their achievement of these objectives. The SPMS would become the mechanism through which centres prescribe performance targets and offer incentives and sanctions for meeting the targets. Outcome funding therefore becomes a powerful influence on conduct (Hoggett, 1996). SPMS would bring intergenerational concerns to be governed in the present time. It would form the basis for deciding on activities and programmes by bridging the gap with budgets and expenditure. The strategic approach came to be viewed as an attribute that managers need to possess to ensure the long term well-being of their communities (MacDonald, 1995).
SPMS in local government in New Zealand were codified through the Local Government Amendment Act (No. 2) 1989 and the Local Government Amendment Act (No. 3) 1996 (cf. Pallot, 2001) and more recently 2002. These two initial pieces of legislation, as explained in chapter four, required local authorities to prepare an annual plan and a long term financial strategy, respectively. These two discursive events would incite rational planning within local authority administration, bringing local authorities within the calculus of diverse centres by seeking to make their actions efficient, transparent and accountable (Reid, 1999). The annual plan and the long term financial strategies would be disciplinary technologies through which the conduct of members of local authorities would be directed (Kearins, 1997).
Through the long term financial strategy (L TFS), local authorities are required to articulate and justify their role in meeting community needs over a period of ten years. The L TFS requires local authorities to reflect on their long term vision, goals and objectives, what activities they want to carry out and how these activities would be carried out and by whom. The LTFS through the funding strategy also requires the councils to disclose how they propose to
fund the activities they wish to carry out. The long term financial strategy therefore links the annual plans to the financial aspects of these plans over a period of ten years. The annual plan on the other hand expresses how these long term plans are going to be achieved over a smaller time space, in this case one year. The annual report is a report card of the progress made in one year towards the achievement of the ten year long term strategic plans.
The governmental potential of the annual plans and the long term financial strategy lay in their minute specification of the objectives particular local authorities are to pursue, the activities to achieve these objectives and the attachment of financial numbers to indicate what the cost of these activities is and whether the objectives have been achieved. These technologies make it possible to assign an objective to a person or group of persons who would then be monitored over their achievement of this objective. They also represent attempts to govern the future by bringing the consequences of future actions to the present so that these can be controlled and directed to desired political ideals. The annual planning process was therefore meant to serve governmental goals, for 11 Arguably, the visibility of a local authority's activities generated by the annual planning exercise and the statutory requirement to consult serves to stimulate people's interest in their local community" (Reid,
1999, p. 220).
The SPMS would also direct the conduct of local authority members by encouraging citizens to become actively involved in their communities. The annual plan and the long term financial strategies were therefore to arise after a special consultative procedure where members of the public expressed their views regarding what was in the plan. Councils were required to give adequate public notice of any annual plan proposal and the long term financial strategy, allow for at least one month for public submissions to be made in writing or in person, give a hearing to subcommittees, meet in public to hear and deliberate on submissions and make final decisions on the basis of
proposals. Through the discourse of consultation citizens would actively participate in the financial management of their local authorities as customers and as members of their communities.
These subjects would form a web of governmentality by being able to gaze into the activities of the local councils and judge them on the basis of the ideals of economy, efficiency, effectiveness, transparency and financial probity. They would be able to do this as customers who would judge the services provided by local councils on quality and price and as members of the community with a stake in the local authority. The annual plan and the LTFS would be the technologies that would make the activities of the local authorities visible to the customers and the community:
At the end of the day, local governments will continue to make funding decisions as they consider appropriate in the light of their local circumstances and their local communities. The provisions will greatly improve local government transparency. They will greatly improve local government accountability, and will deliver services much better to communities in the knowledge that every ratepayer will have an open door to the management plans, the financial plans, the 10-year plans, all the accountability, and all the responsibility (The Honourable J. Banks, The Minister of Local Government, 19 December 1995). The annual report chronicles the budgeted and actual performance of the local authorities making visible the operations of local authorities and how they are working towards achieving the desired outcomes. The actively constituted citizen would then be able to discipline such local authorities by exercising their democratic right to vote, while central government would not be very visible. The reforms conferred local councils authority to make financial and infrastructure provision for their communities' long term needs. While the reforms provided greater autonomy in the making of these decisions, the authorities were less autonomous with rigorous disclosure requirements and public participation whose articulated ideal was efficiency:
By improving citizens' awareness of the performance of local services, the ORPI (outcome related performance indicators) schemes - it might be claimed - will increase the political pressure placed on elected and appointed representatives on governing boards, thereby enhancing both managerial and allocative efficiency in the public sector. The increased sensitivity of representatives to
popular preferences will then permeate the organisation, leading to many of the subsidiary stimuli to improved managerial control. . . (Smith, 1993, p. 137).
The long term financial strategy would represent the technology through which local authorities would exercise their autonomy in terms of source and use of funding, while at the same time their autonomy would be regulated by the ideals of the centre. The authorities could choose whichever funding mechanism they deemed fit to meet the needs of their communities, but the Act sought to make local authorities accountable for their selection by compelling them to explain how they chose their mechanisms. The Local Government Amendment Act (No. 3) 1996 also gave local authorities autonomy to choose ways for allocating costs and funding their expenditure needs. While the Act conferred freedom its twin aim is control and freedom: "This Bill is riddled throughout with the way in which local authorities are not trusted to choose the most effective ways they should pay for their activities" (R. Northey, M.P., 28 March, 1996).
The Act spelt out the principles that were to guide the funding of expenditure needs. These principles specified that the costs of any expenditure would be recovered when the benefits of that expenditure accrue, i.e. cost-benefit. Where the costs of expenditure benefits the general public, such costs were to be allocated to the beneficiaries on the basis of economic efficiency and the nature and distribution of benefits generated. Where the expenditure benefits an identifiable group of people, it would be recovered from them on a user-pays basis. The Act introduced a caveat that the local authority should act in the best interest of its residents and ratepayers and allocate costs fairly and equitably. The authorities were thus required to identify and measure the costs and benefits of their various activities and to justify cost allocation on the basis of cost-benefit analysis, user pays and fairness and equity. This way, the long term financial strategy and the funding policy enticed local authority managers to judge every decision on the basis of economic rationale. Financial
management decisions were to be made on the basis of economic principles with a minor place for non-economic issues (see Salter, 1997).
The SPMS would be the technology for an integrated approach to the
government of local space and populations. The Local Government
Amendment Act (No. 3) 1996 required that the LTFS and the other plans be produced in conjunction with the annual plans, hence leading to well integrated coherent short and long term plans. Mter the 1996 Amendment, the annual plan was required to disclose the L TFS. The annual plan became an "action plan" which outlines how council will undertake and resource the objectives spelt out in their strategic plans. The annual plan provides details of the specific activities, functions and initiatives of the first three years of the LTFS. National space and population were to be governed on the basis of principles drawn from private sector strategic financial management to achieve the political ideals of democracy, accountability and transparency. The Local Government Act 2002 widens the sphere to be governed to include the social, cultural and environmental under a new process, the long term council community plan (LTCCP).