Primo

Speech by the Acting Prime Prime Minister and Minister for Justice and Home
Affairs, Dr Tonio Borg during the ‘Risk Management as a Tool for Good Local
Governance’ organised by the Local Government Department in collaboration
with the Local Councils Association. And the Association of Local Councils
Executive Secretaries (Malta). 22 June 2007

“Distinguished guests, Ladies and Gentlemen,

Governance is the exercise of authority – political, economic, administrative, or otherwise – to manage the resources and business operations in the best public interest, be it at national or at local government level. Governance is also the process of decision-making and the process by which decisions are or are not implemented.

Every government strives for good governance. The doctrine of good governance combines three basic principles, namely: democracy, (political) development and public management.

“Good governance” ensures that decisions are accomplished in a manner which is free of abuse and corruption, and with due regard for the rule of law. Good governance also presupposes political development, which comprises accountability and transparency through the adoption of mechanisms for scrutiny. Political development also involves social, economic and cultural development. It also calls for efficient and effective delivery of services, entrepreneurial encouragement, and the adoption of managerial tools for the effective and efficient delivery of services.

Modern management discourse centres on the concepts of efficiency, effectiveness, economy, customer-orientation and the elimination of bureaucracies. In public administration, goods and services are financed by the public coffers, and an ever-increasing knowledgeable and exigent citizen exacts good value for money and quality in the delivery of services.

Today’s public administration is characterised by a myriad of statutory obligations that have been necessitated by political, economic, social, technological and management development. These include both national and international regulatory obligations.

Recent developments in public management include: emphasis on management skills, better utilization of information technology, more knowledgeable workers, emphasis on customer care and customer satisfaction, elimination of bureaucracies, new legislation that ensures the protection of personal data, gender equality, the elimination of discrimination and assurance of accessibility to all persons. In addition, Malta’s
accession to the European Union and other regulatory actions that increase responsibilities and obligations on government, the impact of accelerating technological developments and the feeling of vulnerability and insecurity have given rise to the need for managing the risks related to such developments.

The political environment has also undergone dramatic developments, such as globalization, speed of exchange of information, climate change, and the issues of international terrorism. Governments have realized that in order to address the threats posed by these developments, a systematic approach to addressing threats should be adopted in all its business process. Central Government’s strategy in the field of irregular immigration is a clear example of the adoption of a balance between statutory obligations and the elimination of risks to our community. At national level, a systematic evaluation of risks is made as part of central government’s strategy to protect the interests of the community whilst respecting the values of human rights, non-discrimination and democracy.

The Public Administration has, for a considerable period of time, been associated with a culture of risk avoidance. This has brought about a culture in our public administration which was built on traditions and past praxes rather than risk taking and experimentation.

This Public Service culture started to shift following the Public Service Reform in the early 1990s, when new management processes and structures were introduced, amongst which were the Management Efficiency Unit and Staff Development Organisation. In addition, IT hardware and training for all Government public officers
was introduced.

It was also at this time that the present Government introduced Local Government in our Islands. Government adopted a “migration strategy” that would facilitate the introduction of this new administrative system with as smooth as transition as possible. This included: the allocation of premises to serve as administrative offices to
all the (then) 67 Local Councils, the supply of ICT hardware, including PCs. In addition, an extensive training programme for potential Council Executive Secretaries was organised by the Management Efficiency Unit in conjunction with the Staff Development Organisation. This programme included modules on financial, IT,
operational and other matters needed in the Executive Secretary’s daily work. In short, the preparatory work done in connection with the introduction of local government, was one aimed at the smooth migration of responsibilities from central to local government as well as at minimizing the risks involved in the administrative work
of the executive secretary. One can, therefore, define the introduction of local government in Malta in the early 90s not only as a political realisation of the principle of subsidiarity, but also as an administrative exercise that included a structured series of actions aimed at avoiding the risks in the operational process for change.

Risk Management is defined as a management tool adopted by an organization to systematically evaluate and address threats and opportunities. It is also a formal, planned response to the existing opportunities and threats.

It is pertinent to apply the principles of Risk Management to the field of local government by relating it both to the political and the executive functions. At the political level, Local Councillors (who are the legally elected representatives of the local citizen to represent his interests within a given locality) need to evaluate each
proposal put before them both within the legal parameters as well as with a view to avoid future prejudice to the Council (be it financial or otherwise). In addition, the Local Councillor, as leading citizen, should also be well informed of the political and other developments taking place in the country. The adoption of the Euro as Malta’s
currency as from January of next year, for example, should put forward an opportunity for the Local Councillor to offer value added services to the local citizens by providing them with the necessary opportunities for information, thus being instrumental in the avoidance of misinformation or undue hassles to vulnerable groups within the locality.

Examples of good practice abound, such as: the development of playgrounds for children in areas that were formerly abandoned, dilapidated or fertile grounds for drug pushers; the establishment of day centres for the elderly, thereby assisting in the social wellbeing of this vulnerable group; the establishment of Youth Councils, thereby giving the opportunity to young people within the locality to train in important decision making; the realisation of an infrastructure project that would benefit the community, such as civic centres; the administration of government property after successful granting of devolution, in line with a well planned financial and operational proposal; and so forth. On the other hand, the unwise spending of certain Councils on items
that are either not within their remit or of no value added to the citizens is equally an example of bad governance.

At management level, the Executive Secretary (as administrative, financial and executive head of the Council) should ensure that he is kept up-to-date with all the legal and administrative developments, including EU legislation that affects the operations of local government, in order to be in a position to give sound advice to the
Council. The preparation of the Budget is one of the areas within the responsibility of the Executive Secretary that should be done with a spirit of loyalty towards the political will of the Council as expressed in the Business Plan, as well as with a view to ensure that the Council operates, at all times, with no negative balance in its working capital.

The preparation of cash flow projections, for example, is one area where the Executive Secretary assists the Council in its financial planning. In so doing, the Executive Secretary should give due consideration to visible risks as well as latent ones. Contingency planning is one of the tools that can be used to cater for different
scenarios. The role of the Executive Secretary, therefore, is a crucial managerial and advisory role, which the Councillors need to acknowledge and respect.

Government’s emphasis on the promotion and development of education, the environment and the economy is also part of a wider strategy that addresses both the opportunities and threats on a national level. The establishment of the Petitions Board early last year and the Local Enforcement Committee towards the end of last year, was another step towards addressing the credibility threat to the local enforcement system by providing a remedy to a justified complaint against an erroneously issued notice of contravention, and the executive management of the system based on a long-term strategy aimed at strengthening people’s trust in the system.

At local government level, each Local Council should also identify the opportunities and threats specific to the particular locality and whilst maximising the opportunities available in order to enhance value, evaluate the risks and make a comprehensive effort to assure that these risks are managed to the best advantage.

I wish you well for the proceedings of this conference.”

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