The Bottom Line / Short-lived Schadenfreud

The news about the raid by Antitrust Authority inspectors on the banks, apparently because they were suspected of coordinating a credit boycott against local authorities, reached the heads of local government at a conference. The dozens of council heads in the hall broke into loud applause.

They say there is no greater rejoicing than to gloat over another's misfortune, especially in the case of local council heads who have been trampled upon by the banks for years, but in this case, there is nothing for them to gloat about. If the banks have become entangled because of the credit boycott, the local councils are in even more trouble. Their deficit in 2003 hit a new high of NIS 7.1 billion, a 20 percent increase, after an 83 percent increase in the previous year's deficit - and they face a recovery plan that includes the lay-offs of at least 7,000 employees. It is not a simple matter to dismiss such a large number of people at a time of high unemployment but because of the many layers of unnecessary workers, many of them political appointments or other cronies, they can blame no one but themselves.

The recovery plans promise to extricate the local councils from their current economic plight. The same promise is made by the accountants who have been instructed to oversee their moves. It is possible to assume that this year, or at least in 2005, the deficit of the local councils will be reduced. Their big problem is not this period, with which they are already dealing. It is the question where they will be in 10 years from now and whether the current recovery program will fail as did its predecessor from 1989.

To prevent this from happening, the heads of local councils have to undergo a cultural change; they will have to learn to be accountable for the way in which the councils they head are run. It is hard to believe that anyone is rushing to try to reeducate these political hacks.

With no political-cultural change in sight, it will be up to the supervisory mechanisms of the local governments to get them to toe the line. It is unlikely that there will be candidates to try to make structural changes in the way the Interior Ministry operates, the body that supervises the local councils. It is especially difficult to believe that this will happen when we bear in mind that the ministry is a political body and that the focus of power of the political parties today, from the point of view of appointments, is local government.

In addition, with the lack of effective enforcement, the next crisis, and the subsequent recovery program, are apparently unavoidable. The local councils have no future in their current organizational form, in the culture of management that distinguishes them and the political security that stems from this. The only chance to save the local councils from themselves is to once again raise the option of consolidating local authorities.

A local authority with fewer than 40,000 residents is not economically viable, and in Israel today there are dozens of them. The treasury tried two years ago to reduce the number of councils from 250 to 150 or fewer but was held back by the local government lobby in the Knesset. The next time the local councils need a recovery program, in 15 years or less, perhaps the Knesset will understand that there is no choice but to approve the plan to merge them.