It was decided that to initiate the program and drive collaboration with the States, leadership would rest with the Department of the Prime Minister and Cabinet (PM&C). The Secretary, Mike Codd, arranged a meeting between Stuart Hamilton and Tony Blunn, at my NCPA offices, to ensure they were clear about the role of PM&C but also to ensure they accepted that the National Capital Planning Authority (in Blunn’s portfolio) would act as a consultant to PM&C, while reporting to Hamilton’s Minister. There was a certain tension to these unusual arrangements.

Codd established a Better Cities Task Force, an interdepartmental group to get the program under way and, just as importantly, to provide informed advice to Cabinet on the proposals to be put forward by the States and Territories. I chaired the Task Force, and the major relevant Departments participated — PM&C, Treasury, Transport, being the most significant among them.

Funding was provided to NCPA to recruit a team to work on establishing program guidelines, assessment criteria for proposals, and procedures for decision-making by Cabinet, where all the allocations of funding were finally to be approved — a concession in the light of the scale of the program and its unusual passage through Cabinet in the first place.

This process was to be objective and rigorous.

The approach to funding meant that, in effect, the capital had been already allocated to the States and Territories. But funds were not to flow without several requirements first being met.

First, each State and Territory had to sign up to an ‘umbrella’ Intergovernmental Agreement that set out the objectives of the Program and the nature of the collaboration it required. The funding was not provided in a set ratio — dollar-for-dollar, for example — but instead would be paid into a pool of funds provided by the State, the Commonwealth, local government and the private sector in some cases, to go towards implementation of an agreed development plan (an Area Strategy) for each area to be funded.

Each Area Strategy proposed by a State or Territory would need to demonstrate how outcomes would be achieved, consistent with the objectives of the program. Each strategy would have to estimate the cost of delivering those outcomes and the contribution sought from the Commonwealth to make the Strategy effective.

Once the Commonwealth and the State both signed up to an Area Strategy, funds could flow. The Commonwealth would monitor progress against Strategy milestones, and if progress was inadequate, the Commonwealth could turn off the funding tap until the State or Territory government made up for lost effort.

In this way it was intended that the States could not simply show an allocation of funds to a Strategy and then not actually spend their share, using only the monies provided by the Commonwealth.

The Task Force was assisted by NCPA staff and a team of consultants (initially David Hain and Dianne Berryman, later joined by Geoff Campbell, formerly Chief Planner of the National Capital Development Commission). It needed first to clarify and adopt program objectives and guidelines to be provided to States and Territories as a basis for preparing their formal bids for funding.

The overall purpose of the Program was described as being to promote improvements in the efficiency, equity and sustainability of Australian cities and to increase their capacity to meet a range of social, economic and environmental objectives.

The objectives were determined to be as follows:

This ambitious span of objectives was made more complex in terms of project definition by a number of additional factors:

The relationship between the objectives, project selection criteria and intended project outcomes was complex and set high performance standards, forcing examination of linkages between activities and investments in an area, and those investments and actual urban outcomes.

Figure 1, adapted from one used in a report by the Victorian Auditor-General, Objectives, Selection Criteria and Intended Outcomes Established for Program, illustrates the hierarchy:

Source: Adapted from Victorian Auditor-General’s Office, 14 November 1996, accessed 3 April 2008 at http://archive.audit.vic.gov.au/old/sr45/ags4502.htm

The Guidelines and Criteria were all agreed by the Better Cities Task Force and endorsed by Cabinet, and the urgent process of seeking formal bids from the States and Territories commenced late in 1991 — with a view to having bids received and assessed before the end of that year. Geoff Campbell stressed the need to engage quickly with State and Territory governments and their agencies, following up our previous exploratory contacts. A round of visits started.

The urgency was simple — to gear up capital expenditure in the urban environment is normally an extensive and time-consuming process. If Better Cities funds were to be spent usefully and with good effect during the five years of the program, spending needed to start as soon as practical. That was why one key criterion for proposals to be accepted was that they were ‘investment-ready’.

States were now provided with draft material covering all aspects of the program — the umbrella Intergovernmental Agreement, the requirements for Area Strategies, the Selection Criteria — and were invited formally to submit proposals for funding agreement.