March 2017
In December last year the Office of Local Government (OLG) released Circular 16-19 confirming that the Office intends to monitor councils’ performance against the Fit for the Future (FFTF) benchmarks over time. The circular applied to all councils without deferred elections and requires those councils to ensure the actions included in their improvement plan are:
This requirement will have a significant impact on some councils.
Morrison Low reviewed the majority of NSW councils FFTF improvement plans and noted that many contained actions that, while necessary, are likely to be unpopular when the details are explained to the community. Politicians will face strong pressure from parts of the community to abandon unpopular plans.
In addition, the requirement to integrate these plans within the resourcing strategy will have major implications in some cases. As an example, a proposed $2 million saving through service reviews will affect staff numbers (typically 40-50% of council costs are staff related), subsequently affecting the places they work and assets they use. A saving of this type would impact all three resourcing strategies to reflect an integrated resourcing strategy and may ultimately affect services to local communities.
In our view, councils need to be proactive now in reviewing their improvement plans, assessing progress against the proposed actions and comparing the actual results against the expected performance alongside FFTF benchmarks.
Councils are not being excused from the improved performance they committed to, and the OLG has stated clearly that performance will be monitored. Councils who have not commenced or have veered off course from their proposed plan will have to develop actions quickly. Those councils who have adopted ambitious plans that have not been tested with the community should do so as soon as possible so that road blocks can be identified early and alternative strategies developed. Councils that expect community resistance to some improvements should model other options and present these to the community in conjunction with original actions so that the community can clearly see the choices available.
As we head into March the time to develop, integrate, test, engage and amend actions, strategies and plans is fast running out. Having a robust financial model that facilitates this analysis together with the associated political, management and community conversations is critical.
Morrison Low has helped many councils along this journey, having developed improvement strategies for modelling and analysis in our custom-built Council Improvement Plan Financial Model.
For more information contact Stephen s.bunting@morrionlow.com