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The Straits Times says

Holding town councils to account

There is scarcely anyone now who would argue for the Town Councils Act to be left intact just to preserve the autonomy originally offered. Instead, what has been aired periodically is either a repeal of the Act - so estate management is again centralised under the Ministry of National Development (MND) - or strengthened regulatory oversight, as supported even by the Workers' Party.

The alternatives are as different as chalk and cheese. In the hands of professionals within a public institution, there was hardly any public controversy. When estates were managed autonomously by elected Members of Parliament, town councils showed their party political nature. This was more visible from 2011, following a series of council handovers, as voters switched sides during elections. In recent years, the performance of the Workers' Party-led town council has been questioned by the MND, Auditor-General and the courts, prompting calls in 2013 for a "comprehensive review" of the Act. Whether MND's proposals, released this week, meet that objective satisfactorily is a question for the public to ponder.

There is agreement that town council governance should not be left to chance. While the Act was drafted to give MPs "as much latitude as possible" to run town councils, as once heard in Parliament, the prevailing view is that certain baseline standards have to be met. The proposed amendments seek to promote functional capability via a code of governance to be drawn up. To ensure compliance, the ministry will carry out reviews and investigations, and make rectification orders.

More penalties will be introduced which will "mirror" those in the Charities Act, said MND. However, clarity is needed on how these provisions will affect MPs. Some legal protection from personal liability is extended to charity board members, whereas directors in the private sector are liable for breaches of duty. And if councils face fines, will public funds be used to pay these?

Helpfully, conflict of interest has not been overlooked given the risks posed - it is the most frequently cited single reason for claims of breach of fiduciary duties in the private sector, according to a study. There's also merit in ensuring town councillors submit audited financial statements promptly, ensure that the sinking fund and lift replacement fund are properly maintained, and flag insolvency risks via medium-term projections.

As town councils are essentially political institutions, there is good reason for local bodies to avoid playing by sub-optimal or no rules. The gap in provisions for handovers of councils, the safeguarding of vital assets, and the continuation of essential services has been highlighted before. There is value in examining if the amendments go far enough to address these concerns. While the strategic intent of the Act is political, its focus is the larger interest of the public.

A version of this article appeared in the print edition of The Straits Times on October 21, 2016, with the headline 'Holding town councils to account'. Print Edition | Subscribe