A National framework

The previous post discussed the emerging national settings for Integrated Planning & Reporting (IPR) and the role of the Commonwealth.

The national frameworks which have been adopted for financial and asset planning by Local Government include a monitoring process that covers asset management, community engagement, good governance and financial sustainability. The NSW IPR legislation is set within the context of these key national directives.

Local Government Reform Fund

The key Federal initiative directly supporting these frameworks is the Local Government Reform Fund, which was announced in October 2009. For a modest $25 million, it aims to “help councils better manage their infrastructure and plan for future community needs.  This will be done through fast-tracking local government infrastructure, and financial and asset management, and planning under national guidelines.  It will also encourage cooperation between councils to improve their capacity to serve local communities.”

States and Territories, in partnership with their Local Government associations, must decide on projects to be submitted for funding and manage successful projects. In NSW, the Premier’s Department Division of Local Government (DLG) and the Local Government & Shires Associations (LGSA) are working together on proposals for State-wide programs, building capacity in asset management and financial planning specifically to support the introduction of Integrated Planning & Reporting. Councils are asked to submit ideas on program content, but cannot bid for funds directly.

The types of activities funded by the program must be directly relevant to asset and financial management and/or collaboration to build capacity and resilience in Local Government. Examples given include:

• Training, manuals and other tools to guide asset management and financial planning;
• Technical assistance, software and support;
• Employment of a project manager;
• Planning or establishment of joint service delivery across councils;
• Promotion of best practice asset and financial management or collaboration activities.

IPR and Constitutional Recognition

As mentioned previously, the Commonwealth does not have a clear Constitutional role in relation to Local Government. However, Local Government does not have a Constitutional existence at all. The Australian Local Government Association (ALGA) is vigorously pursuing not only greater Federal funding, but also Constitutional recognition for the third tier of government.

The two issues are brought together by ALGA President, Cr Geoff Lake.  “In the wake of the uncertainty around the recent High Court decision on Pape, constitutional reform has become even more important as an opportunity to clarify financial arrangements between the Commonwealth and local government,” he said.

According to Cr Genia McCaffery, the President of the NSW Local Government Association (LGA), recent meetings with NSW North Coast Councils have made it clear that both “Constitutional recognition of Local Government and the need to repair crumbling infrastructure” are key issues for these Councils.

The LGA is promoting IPR as a way forward on both practical and political levels, and Cr McCaffery says “The importance of the new Integrated Planning & Reporting Guidelines in achieving Constitutional recognition was identified as a high priority across all council areas. We’ve heard some great examples of how councils are implementing the guidelines to build their communities and educate them about the important services and facilities councils provide. Without strong community support, our chances of being recognised in the Australian Constitution are very slim. Councils need to work extra hard to get their communities on board – and by being the closest sphere of government to the community I’m confident we can do so.”

I wonder how highly this recognition rates for Councillors and Local Government managers outside the leadership of the Associations? Does IPR provide any leverage? We would like to hear from you on this.

Regional v Local

Another lurking pressure on NSW councils is amalgamations. Although the State Government has largely put this in the too hard basket in the past 10 years, the prospect is revived by powerful lobbies from time to time. A recent report, Sydney Towards Tomorrow by the Association of Consulting Engineers Australia, advocated ‘Regional Local Government’ across the Newcastle/Sydney/Wollongong conurbation (11 Sydney Councils to replace 42), along with amalgamation of Government agencies. The ‘big Councils’ idea was seized upon by the Sydney Business Chamber and set off a media flurry.

The established Councils and their Association largely cling to the status quo, rather than embracing a more regional approach to Local Government, insisting that they are already focusing on ways to modernise their sector, and rejecting any overly simplistic assertions that “bigger is automatically better” when it comes to Local Government areas.

The Regional Organisations of Councils (ROCs) vary in their activity and importance, and have not played a very prominent role in the IPR debate. No strong regional governance model is being promoted in NSW and there is little sign of initiative from Government at this point.

Cutting out the middle man?

There is an alternative, if more radical, strategy that could resolve some of the problems of Constitutional complexity, poor planning, inadequate resources, duplication of services and lack of clear responsibility in Australian Government. Sadly for Local Government, as is the case with many simple and logical ideas, abolition of the States appears to be more attractive than it is likely. A successful implementation of IPR across NSW, together with the continuing tendency of Federal takeover of traditional State roles, could be steps towards proving the Regional case.

Disclaimer: the statement above is purely a personal opinion of the author and is not in any way the policy of Technology One Ltd or its management. But what is your view?

Thanks for your time and interest in following our blog this year. As this will be the last posting for the year, I would like to wish you all a very happy and safe festive season. Please feel free to add comments and questions whenever you feel inspired.

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By Ross Kingsley, Senior Consultant Performance Planning, TechnologyOne

The National settings for IPR

In today’s post and the next, I will discuss the emerging role of the Commonwealth and national agreements on local government reform in relation to the themes of Integrated Planning & Reporting (IPR).

 Many important issues can only be touched on very briefly and your questions and comments are encouraged to help us explore these topics in more depth.

 The Commonwealth and Local Government

The role of the Commonwealth in Local Government is tenuous, but growing. Politically, Federal interest and involvement has been subject to the priorities of the political party in office. As a generalisation, Labor under Whitlam, Hawke/Keating and Rudd has been more engaged than Coalition Governments. Constitutionally, the ‘Feds’ have no role and arguably no right to provide funding to Councils (as argued in a recent High Court challenge).  As with many policy areas, we are presently in an era of expanding Commonwealth intervention as regards Local Government and urban planning.

 The 2006 Inter-Government Agreement (IGA) on cost-shifting proclaimed itself “a watershed in the history of government in Australia. For the first time, the three spheres of government have agreed on a framework within which services are to be funded and delivered to the community at the local level.” The IGA includes a commitment by Local Government to “improving its practices including strategic planning at local and regional levels”.

 In terms of the settings for IPR, a major part of the reform agenda is coming from the national level and this can be expected to increase. A key early driver was the 2001 Commonwealth Grants Commission review of funding arrangements. Momentum continued with the Australian Local Government Association’s 2006 study by PriceWaterhouse Coopers of the financial sustainability of local government.

 Financial and Asset Planning frameworks

Recognition of the local infrastructure backlog challenge led to a 3-year process under the Local Government and Planning Ministers’ Council (LGPMC) to produce nationally consistent frameworks for Local Government asset and financial management. The documents cover:

•  Local Government financial sustainability;
• asset planning and management; and
• financial planning and reporting

In May 2009 the LGPMC endorsed the asset and financial planning frameworks and committed to accelerated implementation through the states in their own local jurisdictions. Full implementation is due by 31 December 2010 (and is supported by the Local Government Reform Fund, to be discussed in the next post).

The national framework to promote a consistent approach to Local Government financial and asset planning and reporting include the following:

1. Financial sustainability: use of indicators to show that appropriate directions are being taken and whether they are being achieved, such as:

• Income generation (rates, other income, operating costs and results)
• Efficiently delivered services that are appropriate to needs
• Short and long term financial sustainability measured by liquidity and debt ratios
• Ability to maintain, renew and upgrade assets determined by spending to depreciation rates or deficiencies in the asset renewal gap

2. Asset planning and management including:

• Development of an asset management policy
• Strategy and planning
• Governance and management arrangements
• Defining levels of service
• Data and systems
• Skills and processes
• Evaluation 

3. Financial planning: to be delivered in the form of a strategic longer-term plan, an annual budget and an annual report. These documents provide a framework that covers the Council’s direction setting, monitoring, and resource allocation. 

 The rivers of gold

Crucial to the Commonwealth’s growing formal and informal role in Local Government is its financial power. In the absence of taxation powers for Local Government (which would involve both Councils’ rates autonomy and the willingness to use it), only the Federal Treasury has the potential to resolve the multi-billion dollar infrastructure backlog.

Something of a feeding frenzy has therefore developed around Federal funding. This has been further encouraged by the targeting of the Rudd Government’s stimulus spending for local communities. The Australian Local Government Association (ALGA) recently summed up the largesse in infrastructure funding “achieved… in the past few years by working in partnership with the Australian Government”, from extensions of Roads to Recovery to the $1 billion Regional and Community Infrastructure Program.

The links to IPR

In the next post, I will further explore the Integrated Planning & Reporting links of these national settings.

Meantime, please let us know your views on the directions of change outlined in this post.

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By Ross Kingsley, Senior Consultant Performance Planning, TechnologyOne

Integrated Planning & Reporting – where do the other States stand?

This blog is focused on the NSW Integrated Planning & Reporting (IPR) reforms and associated issues. Now that the IPR legislation is finally passed and we are heading towards integrated strategic planning as the ‘real life’ framework for Local Government in NSW, it is timely to briefly review the broader Australian scene.

The State and Territory Governments have constitutional responsibility for and provide the legal basis for Local Government operations. Australia’s 565 local councils are legally agencies of the States. In the case of Canberra, Local Government functions are performed by the ACT Government. In each State over the last decade there has been a Local Government reform process and all have had some common themes, although the style has varied according to the political climate.

Today’s post will look briefly at each of the States (other than NSW and the ACT) and where they stand in terms of IPR or similar frameworks. In the next post, I will discuss the emerging role of the Commonwealth and national agreements on reform. Much of the information that follows was compiled for TechnologyOne by Monique Langley as part of the research for our series of Local Government best practice white papers.

I welcome your more expert comment and views on any of the State positions summarised below. Which arrangements are working most effectively? Has collaboration with State Government been more fruitful than reforms imposed from above?

Victoria

Technically, Victoria has not been subject to a formal Local Government review, however, major reform of the ‘slash and burn’ school was undertaken by the Kennett Government in the 1990s, with the State imposing amalgamations and structural reforms.  Since then, the Municipal Association of Victoria (MAV) has conducted an annual Trends in Local Government Finance review on the long-term sustainability of Local Government finances and developed long-term (financial) viability measures for councils.

Victoria’s Local Government Act 1989 requires councils to prepare a Council Plan, including 4-year strategic objectives, a Strategic Resources Plan, an annual budget, an annual report, and an annual performance statement outlining achievements.

Notably, this local planning and reporting is backed up by some key State-wide approaches and resources, such as the Community Indicators Victoria website. I will discuss this in more detail in a future post on community outcome measures.

Queensland

The approach to Local Government reform in Queensland was initially collaborative. The Local Government Association of Queensland (LGAQ) and the State Government developed a reform framework paper, Size, Shape and Sustainability, to investigate challenges such as shared services, regional cooperation and voluntary boundary changes with a view to improving financial sustainability. However this was controversially abandoned in 2007 when the Queensland Government established a commission to review boundaries, followed by forced amalgamation of councils (from 157 to 73) and new elections in March 2008.

The Queensland Government currently provides a six-point Plan and Deliver strategic planning template that includes reviewing the strategic direction; developing the corporate plan; consultation and feedback; developing the operational plan and budgets; implementing the plan and annual reporting and review.  It provides councils with some assistance to meet best practice standards and continuous improvement requirements.

Recent reforms to the Queensland Local Government Act which are due to come into effect next month are aimed at making Local Government more “accountable, effective, efficient and sustainable”.  These require that all councils introduce a 10-year vision and set of plans encompassing financial management, asset management and community management (incorporating a community engagement plan).  Under these 10-year plans, the framework requires a 5-year corporate plan and an annual operational plan and budget.  Performance will then be monitored through the annual report.  It is anticipated that there will be a transitional period for introducing the reforms.

South Australia

The Local Government Association of South Australia released an independent inquiry report, Rising to the Challenge: Towards Financially Sustainable Local Government in South Australia, in 2005.  The report showed that in general terms, councils had put community needs and demands for services ahead of their own financial sustainability.

Legislative reform flowing from the review process was collaborative. A Local Government (Financial Management and Rating) Amendment Act was introduced in 2005. This requires councils to have a 10-year financial plan and infrastructure and asset management plan; a 4-year strategic management plan identifying its objectives (including specific objectives for the sustainability of the council’s financial performance and infrastructure); and an annual business plan. Councils must review the long term plans within two years of each council election, as well as reviewing the financial plan annually as part of the business plan cycle.

Tasmania

The Local Government Association of Tasmania (LGAT) commissioned Access Economics to undertake a Review of the Financial Sustainability of Local Government in 2007. The report recommended that each council develop a rolling 10-year financial plan to rehabilitate and expand infrastructure, develop and grow services, generate additional resources from revenue increases and cost savings, and comply with financial KPIs to address the renewals gap.

Councils in Tasmania are covered by the Local Government Act 1993, under which they are required to prepare a 5-year strategic plan, an annual operational plan and an annual report.  Additionally, councils are asked to participate in an annual KPI framework which is run in partnership by the State’s Local Government Department, the LGAT, and professional groups.  Much of the KPI framework is, however, based on financial indicators rather than strategic goals.

Western Australia

The WA Local Government Act 1995 requires councils to prepare an annual budget and an annual financial report.  There are also vague requirements in relation to planning for the future of Local Government areas.

In 2006, the Western Australian Local Government Association released a Systemic Sustainability Study and a task force was set up to implement the 41 recommendations. In February 2009, the WA Government announced wide-ranging Local Government reform strategies aimed at achieving better planning, management and delivery of services to communities.  Each of the 139 councils in WA have been asked to undergo a voluntary amalgamation process, reduce councillor numbers, and form regional groupings for efficiencies.  Additionally, they are being asked to adopt a longer term strategic planning framework, including asset and financial management and workforce planning.  Councils are also asked to participate in a review of current Local Government legislation to facilitate sustainability. 

Northern Territory

A reform process launched in the Northern Territory in 2008 has the goal of improving and expanding the delivery of services by establishing eight new shires with offices in major centres and the installation of unified business systems.

The Local Government Act 2009 requires the preparation of a 4-year regional plan (between interested councils for the region) and Municipal or Shire Local Government plans that must be reviewed annually.  Each council’s annual plan must contain a service delivery plan and the council budget; long-term community or strategic plans adopted by the council; a long-term financial management plan; and key performance indicators.

Interestingly, councils are also required to assess the adequacy of constitutional arrangements currently in force, opportunities and challenges in service delivery, possible changes to administrative and regulatory frameworks, and any possibilities that exist to improve services by cooperating with other councils (updated at least once in the council term).

Who has the lead?

The survey results seem to indicate that the New South Wales IPR framework could potentially elevate the State to best practice level in Australia.  However, a key threat to the success of these reforms in NSW may be the adequacy of supporting resources and templates at a State or regional level. Do you think there are opportunities to remedy this in what is flowing from the Federal level?

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By Ross Kingsley, Senior Consultant Performance Planning, TechnologyOne

Integrated Planning & Reporting (IPR) legislation passed

The NSW Local Government Amendment (Planning and Reporting) Bill 2009 was passed by both houses of Parliament last week, without any amendments and has now been signed into law by the Governor.

Now it gets real! Three years after the reform discussion papers were first issued (and a couple of Ministers later), local government in NSW has a new statutory basis for strategic and operational planning and reporting.

Each of our 152 councils will need to determine whether they wish to be placed in ‘Group 1’ (all requirements in place by 30 June 2010), ‘Group 2’ (2011) or ‘Group 3’ (2012).

The challenges of being ‘Group 1 ready’ are considerable, as a council “must endorse a community strategic plan and adopt a resourcing strategy, delivery program and first operational plan” within the next nine months. Most councils that have this intention still need to put some of the key planning pieces in place, together with supporting change to systems and procedures – and perhaps even to organisational structure.

Focus on the Delivery Program

In this post, I want to focus on one key aspect of IPR, the four-year Delivery Program.

The choice of the term ‘Program’ not ‘Plan’ for this component by the Department of Local Government (DLG) was quite deliberate. According to the Guidelines:

This is the point where the community’s strategic goals are systematically translated into actions. The Delivery Program is a statement of commitment to the community from each newly elected council. In preparing the program, Council is accounting for its stewardship of the community’s long-term goals, outlining what it intends to do towards achieving these goals during its term of office and what its priorities will be.

The Delivery Program replaces the former Management Plan requirements. It is designed as the single point of reference for all activities undertaken by Council during each term of office. All plans, projects, activities and funding allocations must be directly linked to this Program.

Each new council should have real ownership of this program, as well as an understanding of the longer term strategy behind it.

I have expressed the opinion previously that the Delivery Program is the core of the planning and reporting reform. It forms the ‘bridge’ between long term strategic planning (a well-established discipline) and annual operational/budget planning (which all councils do). But there are a wide range of interpretations among council managers of the Delivery Program requirements. Is this is a radical innovation or just the old Management Plan requirements rebadged?

The Requirements                   

The IPR legislation and guidelines provide no template for what the Delivery Program ‘looks like’. The relevant section of the draft supporting Manual states the intention of the Delivery Program very well, but is quite scanty on practical detail.

In summary, the ‘Essential Elements’ for the Delivery Program are as follows. It must:

• Be adopted by 30 June following a council election
• Directly address the objectives and strategies of the Community Strategic Plan and identify specific actions that council will undertake in response
• Inform, and be informed by, the Resourcing Strategy as developed by the council
• Address the full range of council operations
• Allocate responsibilities for each action or set of actions
• Include detailed financial estimates for the four year period
• Consider priorities and expected levels of service expressed by the community (during the engagement process for the Community Strategic Plan)
• Be exhibited for 28 days for public comment before adoption
• Be reviewed annually when preparing the Operational Plan
• Be re-exhibited where an amendment deemed (by the Council) to be ‘significant’ is proposed
• Include a method of assessment to determine the effectiveness of each ‘activity’

A progress report to council is required at least every six months.

Developing a Model

What is new and challenging about this? In terms of completeness, accountability and financial planning it goes above and beyond the previous Management Plan statute. No doubt councils can comply readily enough, but to go beyond compliance, the Delivery Program must be about comprehensive alignment and planning to ensure community outcomes flow from council operations.

How many government bodies in the world really do this well? In the English-speaking world, we will certainly be looking to the experience of local government in the UK and New Zealand for examples.

How will the Delivery Program balance the legitimate roles of council as both a ‘steward’ of the Community Strategic Plan and a major local service provider? How best to measure and report these very different types of results?

The Manual also posits the need for councils to review existing activities to decide whether they should be revised or discontinued where they “do not appear to align with the Community Strategic Plan’s objectives and strategies”. This is logically obvious but challenging and even threatening – it is not easy to turn the Titanic!

Getting Hands-On

TechnologyOne will soon host a workshop on the Delivery Program requirements for the NSW councils who use our Performance Planning solution. Resolving an approach to the Delivery Program is of course particularly urgent for those councils who are nominating for Group 1. Our workshop will be part of our efforts to encourage frank and practical information sharing on IPR.

None of us has all the answers and as we work towards good practice in each area of IPR, we need to share the best ideas and models we can find. Please feel free to suggest any useful examples and links on the Delivery Program or other priority aspects of IPR.

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By Ross Kingsley, Senior Consultant Performance Planning, TechnologyOne

Consultation, Participation, Engagement…

The Community’s Strategy

What does it mean to have a Community Strategic Plan (CSP)? The plan is for a Local Government Area (LGA), but how is it from a community?

The intent of Integrated Planning & Reporting (IPR) is that the CSP is for the whole community, with multiple stakeholders responsible for delivering its outcomes. The challenge is then, in terms of process, to differentiate the different roles and responsibilities of stakeholders, and more importantly, get them all working on delivery.

The 4-year Delivery Program is then essentially the council’s own accountability as part of the overall outcomes plan for the elected council’s term of office.

Consultation, Participation, Engagement…

I will offer a few thoughts on what the Community Engagement Strategy in IPR means and I invite those more expert to comment.

All councils carry out extensive community consultation in a vast number of ways. While some councils are impressively resourced and organised for this purpose, more often consultation mechanisms and actions are scattered and poorly coordinated. One benefit of IPR should be the greater emphasis placed on managing and evaluating the major investment councils make in engaging with the community.

There has been no objection from local government to the principle that a documented strategy for community engagement should be part of IPR, but there have been plenty of misgivings about how far engagement is supposed to go and the practicalities for smaller councils. This is understandable, especially when we see government bodies, such as IPART float unrealistic options about how to gauge community views on rates.

As I see it, part of the concern is based on misconceptions that the CSP is supposed to be somehow ‘written’ by the community, or that the Department of Local Government (DLG) is simply endorsing a ‘bigger is better’ view of community consultation.

The Rules of Engagement

Good community engagement is an outcome in itself, because it is indispensable to accountability and transparent decision-making. However, more is not necessarily better. The leading body in this area is the International Association for Public Participation (IAP2) and its widely-used Public Participation Spectrum is often assumed to be a progression from ‘basic’ to ‘advanced’ community participation. In fact, it is a tool or guideline “designed to assist with the selection of the level of participation that defines the public’s role in any community engagement program. The Spectrum shows that differing levels of participation are legitimate depending on the goals, time frames, resources and levels of concern in the decision to be made”.

Most importantly, the Spectrum also “sets out the promise being made to the public at each participation level”. Fulfilling such commitments does not come easily and certainly IPR is very much about lifting this bar for NSW local government.

A question of timing

Following the election of each new Council (in NSW, this is fixed for late September every fourth year), there will be only 9 months to review, consult on, and confirm the CSP.  Councils will also have to develop and consult on the Delivery Program and Operational Plan simultaneously, so that they are all in place from 1 July of the following year. This is a huge ask and, apart from other demands, will require a program of community engagement during the summer, which is generally considered a ‘no-go area’ for major consultations.

However, no real alternatives have been proposed, as newly-elected councils need to have their own Delivery Program in place if they are expected to take real ownership of the strategy. I dare to suggest that the practical problem here is the timing of local government elections in NSW, but I can’t pretend that there is a groundswell of support to change the dates.

The Community’s Plan or the Council’s Plan?

The recent practitioners’ forum on IPR identified “the need for council to coordinate the development of the Community Strategic Plan for the local area to achieve a sustainable future. So that, in turn, means that the Community Strategic Plan is not council’s (as such), but rather that council is supported in its role of civic stewardship by other stakeholders”.

Of course, this is saying that the CSP is not just a ‘Council Plan’, but I would want to express it somewhat differently, as I believe the CSP must be very much the council’s plan – or there will be precious few community outcomes.

Councils have a range of fundamental roles in helping to deliver a sustainable future for their LGAs and communities – “as a leader, facilitator, educator and service provider” (Sustainable Penrith Action Plan). The recognition of this is one of the strengths of IPR. We live in a participatory democracy, but not a direct democracy! 

The New Zealand Experience

New Zealand has solved the Community Plan vs Council Plan argument – the model there is called the Long-Term Council Community Plan (LTCCP). Simple!

In crude terms, we in NSW are aware of New Zealand local government being ‘5-10 years ahead of us in this stuff’. At the forum mentioned above, Dave Foster of Manukau City Council gave a frank presentation on NZ’s experience with the LTCCP legislation. Manukau has reached a level of participation which saw its draft 2009 Plan receive a stunning 19,800 submissions (from a population of about 330,000). Dave posed the question “How do you get to the stage where the community is thinking about the things that you need them to think about?” Sounds like guided democracy is still required.

A local delegate countered by asking Dave whether New Zealand was actually a better place to live due to this participatory local government – and how could this be judged anyway? How and what do you measure? More sustainable? Better services?  A great question and one I intend to discuss further in my next post.

Community Engagement as part of the Plan

Another excellent question posed to me recently is how to make the Community Engagement Strategy (CES) part of the Plan itself.

Obviously, at one level, community engagement has to be a strategy as well as a value, and must be an action (hopefully a well-resourced project) to be carried out in the Operational Plan. But can the CES become an intrinsic dimension of the plan and program?

 

In future posts, I would like to pick up on some of these themes, including the definition of community and stakeholders, and lessons from the UK local government ‘revolution’. I invite your active engagement!

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By Ross Kingsley, Senior Consultant Performance Planning, TechnologyOne

Integrated Planning & Reporting Bill passes the Legislative Assembly

The Integrated Planning & Reporting (IPR) Bill has now passed the Legislative Assembly and reached the Upper House. At this stage, it is expected to pass in the current parliamentary session with no real dramas anticipated.

Information and training opportunities

I’m always happy to share information about IPR, and with the demands of the new legislation, I am sure there will be a flurry of opportunities.

Recent events around IPR include the well-attended meeting of the NSW Integrated Planners Network, hosted by City of Sydney council on 21 August. The network is part of Local Government Managers Australia (LGMA). Presentations were made on several relevant topics, including the host Council’s work to link the Sustainable Sydney 2030 Vision to its business plans across the organisation, and Wollongong City’s long term financial planning. A workshop was also held on the change management demands of IPR.

The LGMA naturally has sessions on IPR at its upcoming NSW conference and is also offering some one-day courses on IPR in several areas in October-November.

‘Beyond Compliance’ Seminar hosted by TechnologyOne

Last Tuesday, 1 September, TechnologyOne hosted a seminar on IPR under the theme ‘Beyond Compliance’. Both practical topics and broader industry issues were explored.

Amanda Spalding, Deputy General Manager of Manly Council and Chair of the Integrated Planners Network, gave a lively and provocative keynote address on the challenges and opportunities for local government arising from IPR. Amanda’s emphasis was very much on the community benefits that councils could gain if they really embrace the spirit of the reforms.

I made a presentation summarising the content of the IPR legislation and touching on some key points, which I will follow up in future posts.

Scott McKeown and Mick Cowper of TechnologyOne outlined the practical response to IPR through the company’s Performance Planning solution, and showed how value can be added through an integrated systems approach.

There was quite a bit of discussion generated during the seminar around the challenges facing Councils, how far down the track many of them are in preparing for IPR, and whether they intend to be in Group 1, 2 or 3.  We were particularly struck by the number of attendees who indicated that they intended to be Group 1 councils; although the simple fact that they attended our seminar does suggest that they are more likely to have a focus on IPR in their organisation, and could well be more advanced in their preparation than the average.  When we asked why, feedback suggested that it was better to be setting the trend than following it; that way you can influence any eventual de-facto standards that may arise.

What do you think? Would you prefer to be in Group 1 (why not take our poll below)? And for what reason?

We’ll be holding a webinar in the next month based on the Beyond Compliance seminar, so keep watching this space!

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By Ross Kingsley, Senior Consultant Performance Planning, TechnologyOne

Resources and Rate Pegging

In this post, I just want to follow up one of the hot issues – rate pegging – I touched upon last week in a little more depth and I’d love to hear your thoughts.

How do we pay for our plans?

From the start of the IPR consultations, Councils have pointed out that it lacks logic to increase responsibility for effective long term financial planning while denying local government any financial autonomy. In other words, we are back to the debate on rate pegging, which is a system unique to NSW.

As State Government has been committed to rate pegging, the Department of Local Government (DLG) has only been able to reply in platitudes, that Councils will put themselves in a stronger position to seek approval for special rate variations by “robust community engagement and direction supported by long term planning and financial planning”. There were no guarantees of a better system.

One specific question raised was whether the Planning Reform Fund or ‘Plan First’ revenue could be accessed to support the IPR transition. I am not aware that this was ever directly answered by Government. However, there are already instances of a less obvious source, the Urban Sustainability Program grants, being used for IPR-related planning around sustainability frameworks.

Meanwhile, the under-funded DLG has struggled to resource the IPR process over the past four years and to get it onto the Government’s priority list for legislation. Despite all the barriers to IPR, it has survived and will shortly be statutory.

The IPART review – will it be a breakthrough?

Earlier this year, the Government established the Independent Pricing and Regulatory Tribunal (IPART) review of local government revenue, giving hope of a circuit breaker on the rate pegging stalemate. At this stage, we have a draft report with two main options. While this has been welcomed by the Local Government and Shires Associations of NSW (LGSA), on the ground opinions are still very much divided on whether this will lead to a breakthrough or to ‘shuffling the deckchairs’.  

IPART’s Option A sees the continuation of rate pegging, based on a more objective “Local Government Cost Index” from 2010-11. Councils would also be able to apply for “a rate path over four years, which might exceed the rate peg” (directly linked by IPART to the IPR cycle).

Option B has the intent of “mak[ing] democratic accountability to the community sufficiently effective to ensure that rates rise commensurate with the community’s demand for services and its preparedness to pay for them”. A radical experiment in local democracy! This option would require councils to demonstrate to the Minister that they have “a track record of sound financial management” and “broad community support, rather than pockets of support for their fiscal strategy”.

How would this be judged? Some of the “clear guidelines” which are mooted look more like naïve attempts to impose impracticable governance standards.  IPART proposes that where councils rely upon community surveys, at least 25-30 per cent of ratepayers (e.g. up to 90,000 people for Blacktown) would have to participate in the survey with 50-60 per cent support (50,000 positive respondents to a proposal to increase rates?). The Council concerned will need to get a rate rise just to pay for this exercise.

Fortunately, there might be a more feasible alternative allowed: where a four year financial plan was “adequately debated in the run-up to a council election, and supported by the incoming council, that could be considered to provide a mandate from the community for that plan”. We will watch with interest to see what mechanism is put in place to judge the quality of political debate.

Do you agree with either of the IPART Options?  If not, what would you suggest as a better way?

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By Ross Kingsley, Senior Consultant Performance Planning, TechnologyOne

Will Councils move beyond compliance with Integrated Planning & Reporting?

Local Government in New South Wales knows all about compliance because it is subject to the rules and guidelines that both Federal and State authorities set.

The Integrated Planning & Reporting (IPR) legislation should be passed soon. Does this mean that every Council will nominate itself to be in Group 1 to introduce the reforms this year? The signs are that only a minority will. Is this because compliance is difficult?

Many in local government are looking at the reforms not just as an imposition, but as a genuine opportunity. Maybe in this instance the statutory driver is seen as more useful than threatening. Moving beyond compliance is a self-imposed challenge to get real value out of these changes.

Seizing the opportunity, can we do better than ’93?

The 1993 Local Government Act created the Management Plan and Annual Report requirements that will remain until Councils move to the IPR framework. Although it initially transformed Council planning, the intentions of the Management Plan provisions have not been fully realised and the reporting regime became bogged down in compliance. The Annual Report and SOE Report have largely been seen as dead ducks for years.

What factors will make IPR more successful? Will it allow NSW local government to leapfrog other States to a best-practice status, perhaps closer to New Zealand? More importantly, will it genuinely embody the principles of sustainability?

Strategic planning is easy…

Oddly enough, although the requirement for a Community Strategic Plan (CSP) is new and radical, it is not the hardest nut to crack. There are plenty of good examples of strategic plans for councils; from those developed for small rural areas to those that have been designed for a large urban centre.

While some players still have trouble getting their head around the new requirements for a plan based on community outcomes many of which will be beyond Council’s power to deliver, on the whole the concept has been embraced throughout the consultations.

…Delivery Program is hard

The core of the planning and reporting reform is the four-year Delivery Program. This is about comprehensive alignment and planning to ensure outcomes from operations. Not an easy task, either in concept or execution. In fact, good examples from around the world need to be put forward to guide councils while they’re implementing these reforms.

Everyone more or less knows what a strategic plan or an operational plan looks like, but what about a delivery program? How will it reflect that councils are service organisations? There is no template and the guidelines are scanty, but patterns are beginning to emerge.

Resourcing Strategy is impossible?

IPR is about delivering results, not just nice models. The biggest barriers will be seen as the obvious ones – dependence on Government (for the non-Council responsibilities) and inadequate resources (for the Delivery Program).

To date, no prospect of extra resources or resource security has been on the table as part of IPR. However, now we have an IPART review of local government revenue. Although welcomed by the LGSA, opinions vary on the directions of that review. I will have more to say on that next time.

Few Councils (even those that are likely to put up their hands for Group 1) have all the pieces for the Resourcing Strategy in place-:

• Long Term Financial Plan:  Does it drive or follow the ‘strategy’? How can you have long term planning with no financial autonomy?
• Asset Management Strategy:  The elephant in the room. Whatever the quality of planning, adequate asset renewal is beyond Council means and will depend on Federal money. IPR is hopefully a major opportunity to leverage that funding.
• Workforce Management Strategy:  Having a workforce to deliver the program is obviously necessary, but what is the template? The Department of Local Government (DLG) has not had an answer and we are eagerly awaiting their promised website. Good examples welcome!

Where does the LEP fit?

If there can be two elephants in one room, this must be the second. In the DLG diagram the LEP sits ‘under’ the CSP. Given the relative clout of the respective agencies, DLG and DOP in local government ‘reform’, we will watch this space with interest.

‘Performance’ vs. ‘Outcomes’

IPR calls for measures at all levels to judge how effective the plans are. This is challenging to say the least, as many councils still do not have either well-established outcome measures or  robust service KPIs.  Few councils are strong on both.

It will soon be a statutory requirement to undertake and balance the measurement of community outcomes, council outcomes and operational performance. In NSW, unlike other jurisdictions, there is no State-wide approach, tools or standards in place. Nor has any resourcing of this been promised by Government. How best then to tackle it?

Where to from here?

One thing about working in NSW local government is clear – knowledge sharing is a crucial part of any resourcing strategy! So I hope we can share and compare stories, examples and opinions on IPR as this challenging journey continues.

There are many other aspects of IPR to discuss, including:

• Dealing with the many specialised plans and strategies which every council has (and we can’t blame compliance for all of that!)
• Incorporating the Community Engagement Strategy in plans
• Integrating systems and processes to get best value

Altogether, it’s a big ask and has to prove its worth to the sceptics. And how much incentive is there to pioneer this stuff anyway? Let us know if you are ‘Group 1’ – and why!

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By Ross Kingsley, Senior Consultant Performance Planning, TechnologyOne