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                    [post_date] => 2018-06-22 09:11:47
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                    [post_content] => [caption id="attachment_30857" align="aligncenter" width="710"] Councils don't always properly analyse services or business cases before entering joint delivery: auditor.[/caption]

Collaboration in local government can save money and improve access to services but a new survey shows most councils are not effectively engaging in shared services. 

Insufficient planning, inappropriate governance and a lack of capability are among the main factors preventing more councils in NSW from efficiently and effectively engaging in shared services, according to a new report from the state’s audit office.

The report, released yesterday, also found the state’s Office of Local Government did not provide specific support or guidance to councils on how to effectively share services, despite it being a widely used delivery model across the sector.

The Auditor-General has recommended the OLG produce guidance on shared services for the local government sector by April 2019.

The auditor’s report, based on a survey completed by 67 councils, found 87 per cent were engaged in shared services, and 27 per cent negotiating or considering future shared services. 

The most prevalent areas of joint delivery were waste and recycling, environmental, road services, procurement, asset management and human resources. 

Barriers to excellence 

However, the report identified several key factors that are preventing councils from effectively and efficiently engaging in joint services. It found that local governments do not always analyse their existing services or build a business case before entering into shared service. “At a minimum, councils should assess the costs of service delivery, the resources needed to deliver them, community needs and expectations, the possibility of cost savings and increased efficiency, and alternative service delivery models (e.g. outsourcing, shared services),” the report found. Ineffective governance models were identified as another key barrier. “For each model, councils need to determine shared services membership, decision-making processes, reporting lines, and delegations,” the report said. Given shared services arrangements can involve complex planning and negotiations, the report found that capability was another factor preventing many councils from effectively executing collaborations.   “Councils do not always have the capability to identify which services to share, negotiate with partner councils, or plan and evaluate shared service arrangements. We found that many councils do not seek out support or guidance for their shared service arrangements.”

Sources of advice 

Support for identifying, negotiating, planning and evaluating shared service arrangements is available from other councils, regional organisations, peak bodies, professional associations, universities and the private sector, the audit office said. While part of the role of OLG is to work with the sector on policy and programs intended to strengthen local government, including councils' service delivery, the report said the OLG did not provide specific support or guidance to councils about effectively sharing services. “Guidance or principles to help councils decide on effective and transparent governance models would benefit the sector,” it said. It recommended the OLG develop guidance outlining the risks and opportunities of governance models that councils can use to share services. “This should include advice on legal requirements, transparency in decisions, and accountability for effective use of public resources.” For councils, the audit office recommended they base decisions about shared services on a “sound needs analysis”, review of service delivery models and a strong business case. Councils should also ensure the governance models they choose are fit for purpose, ensuring clear roles, responsibilities and accountability. Local governments should also build the capability of councillors and council staff in the areas of assessing and managing shared services, leading to better understanding of opportunities and management of risk, the report found.

OLG: welcomes report

The OLG told Government News it welcomed the auditor’s report and its observations on strengthening local government performance in shared service delivery. “The report’s recommendation that the Office of Local Government develop guidance in the risks and opportunities of shared services will provide valuable support for councils,” a spokesperson said. “The NSW Government has recently introduced a major initiative to support council collaboration and provide a robust governance framework for councils to undertake shared services through the establishment of 11 new joint organisations. “The Office of Local Government looks forward to working with the NSW Auditor-General and the Audit Office to implement the findings of the report, as we continue to support local councils to deliver high quality, value for money services for their communities,” the spokesperson said.
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[post_title] => Poor governance, capability hindering shared services [post_excerpt] => Collaboration in local government can save money and improve access to services but a new survey shows most councils are not effectively engaging in shared services. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => poor-governance-capability-hindering-shared-services [to_ping] => [pinged] => [post_modified] => 2018-06-22 10:04:31 [post_modified_gmt] => 2018-06-22 00:04:31 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30837 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [1] => WP_Post Object ( [ID] => 30738 [post_author] => 674 [post_date] => 2018-06-15 11:17:13 [post_date_gmt] => 2018-06-15 01:17:13 [post_content] => [caption id="attachment_30742" align="aligncenter" width="654"] The process for allocation grants to councils will be streamlined.[/caption] Queensland is set to reform its process for allocating grants to councils with the State Government providing $4.5 million to tackle the long-running issue in its budget this week. Local government groups and experts have welcomed the Palaszczuk Government’s move to streamline the administration of grants to local government, which will see a new management system adopted. The Queensland Government’s budget on Tuesday provided $3.2 million over four years to “undertake planning to improve and simplify the administration of grants to local government.” The budget contained a further $1.3 million to develop a new grants management system to improve and simplify the administration of grants to local government. The Local Government Association of Queensland welcomed the measure as a “clear investment in the need for grants reform,” which it said was the sector’s top advocacy priority, but added that councils needed more details on the future of the system. Budget papers state that the new measures will “progress the recommendations from the Review of Grants to Local Government” that was conducted by KPMG and AEC Group in mid-2017 but which has not been publicly released. Government News sought the report yesterday from the Queensland Government but a spokesperson said it was a “confidential document.” The LGAQ has previously said the report found the current model of grant funding was “fragmented and costly” and was “failing to deliver the best financial outcome" while undermining councils’ ability to plan, manage assets and achieve financial sustainability. The peak has lobbied for the consolidation of grants programs into a small number of funding streams aligned to outcomes. While agreeing it was important to simplify the process, local government expert Roberta Ryan said it was similarly necessary to “make transparent the criteria that is being used for the basis of distribution” of grants. She said this also meant ensuring distribution criteria adhere to the core principle behind the grants system of ensuring people can access services at the same level regardless of where they live. “That’s a tough one because Australia is big and very spread out, and Queensland is the most decentralised state, with plenty of areas that are very remote and with sparse populations,” said Professor Ryan, director of the UTS Centre for Local Government. Engagement with the local government sector around the application of grants criteria was also critical “because it’s only local government that really understands the on-the-ground implications,” she told Government News. “It’s critical for them in terms of forward planning. The financial assistance grants particularly for non-metropolitan councils can be quite a significant component of their budgets, and many things that the community needs take quite a long time to plan and implement. "Without budget security, local government is essentially in a position where they’re working with one hand behind their back,” said Professor Ryan.

Independent complaints body

The State Government's budget also provided $14.1 million over four years to establish an “independent body to consider councillor conduct complaints and improve governance practices.” The new measure follows the government’s move in February to enable mayors and councillors to seek advice from the Queensland Integrity Commissioner, a recommendation of the state’s Crime and Corruption Commission in its report into local government corruption. It comes as the state continues to see a number of allegations of local government misconduct. Last month Ipswich Council made a submission to Queensland Minister for Local Government arguing against the full council being stood down, while the State Government suspended four mayors and a councillor after it passed new legislation permitting the automatic suspension of councillors facing serious charges.

Waste, infrastructure measures

Elsewhere in this week’s budget the State Government provided $100 million to support the state’s resource recovery and recycling industry. However, the LGAQ said that councils would be “disappointed” that more than 30 per cent of the revenue generated by the state’s new waste levy will go back into general revenue. The budget also provided $147 million for the Works for Queensland program to support regional councils in undertaking maintenance and minor infrastructure, and $38 million to establish a new Disaster Resilience Fund to deliver mitigation and resilience projects.
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[post_title] => Council grants shake-up for Sunshine State [post_excerpt] => Queensland is set to reform its process for allocating grants to councils with the State Government providing $4.5 million to tackle the long-running issue in its budget this week. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => council-grants-shake-up-for-sunshine-state [to_ping] => [pinged] => [post_modified] => 2018-06-15 15:09:26 [post_modified_gmt] => 2018-06-15 05:09:26 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30738 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [2] => WP_Post Object ( [ID] => 30635 [post_author] => 675 [post_date] => 2018-06-08 09:05:11 [post_date_gmt] => 2018-06-07 23:05:11 [post_content] => [caption id="attachment_30637" align="aligncenter" width="647"] Driverless cars could see revenue reductions for councils, advisor says. [/caption] Local governments need to prepare for the infrastructure challenges associated with the advent of driverless vehicles, such as new costs and a hit to revenue, an infrastructure advisor says. The director of automated vehicle infrastructure at Infrastructure Victoria, Dr Allison Stewart, has called on all councils to consider the potential impact of driverless vehicles. “This really could be one of the most fundamental changes in transport over the coming years,” she told MAV’s Infrastructure and Asset Management Conference in Melbourne on Thursday. “The most important thing for councils, first of all, is to understand research looking at how this could change the future for them.” Dr Stewart told Government News that councils need to stay informed of the technology and consider the potential impact of driverless vehicles on their budgets - an issue she says could be a “huge concern” for many local governments.   [caption id="attachment_30636" align="alignright" width="137"] Dr Allison Stewart[/caption] Councils must consider the financial implications of maintaining and renewing assets like roads during the rollout of driverless and zero-emissions vehicles, said Dr Stewart. Forecasting the potential impact of the cars on council budgets includes “trying to identify potential infrastructure costs in the short and long term as we see potentially a significant proportion of vehicle space on the roads,” she said. “The worst thing that could happen is if you’re caught off guard with this technology at this level of change.”

A hit to revenue

Dr Stewart warned that driverless cars could result in revenue reductions for councils if patterns of transport among residents change and there is a widespread uptake of self-parking driverless vehicles. “We might see less parking depending on whether people decide to send their private autonomous vehicles home to park during the day. That could potentially have significant impacts for revenue sources,” she said. Dr Stewart’s remarks come as the National Transport Commissions delivers a reform roadmap to prepare Australia’s roads for more automated vehicles that could see them operating “safely and legally” on our roads before 2020.  

Key concerns for councils

Infrastructure Victoria recently engaged stakeholders as part of formulating advice for the Victorian Government on the infrastructure required to support driverless vehicles. Dr Stewart said local governments highlighted a lack of awareness around the potential impact of automated vehicles on councils as well as concern around the economic impacts on them. Last month, Infrastructure Victoria released a consultation summary revealing stakeholders’ main concerns, which included impacts on land use patterns, energy supply and charging capacity, public acceptance and government policy and infrastructure implications. The paper noted that although many stakeholders felt government needed to play a role in the ownership of energy infrastructure, there was significant concern around the level of responsibility for infrastructure planning for driverless vehicles. “There is uncertainty around who is responsible for meeting the infrastructure needs of future vehicles, given responsibility for roads is shared between local and state governments,” the summary said. It also noted stakeholder’s concern about the interaction between automated vehicles and road infrastructure, including lane sizes, line markings and lights, congestion, public transport and the need for new infrastructure.

Report forecasts scenarios

Infrastructure Victoria in April released a report that outlined a series of future scenarios resulting from the rollout of driverless vehicles on infrastructure. Infrastructure Victoria will release a further report in August and its final advice to government in October outlining the potential infrastructure that would be required for each of the future scenarios. Dr Stewart said this report will have “significant findings” for local and state government.
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[post_title] => Call for councils to consider automated cars [post_excerpt] => Local governments need to prepare for the infrastructure challenges associated with the advent of driverless vehicles, such as new costs and a hit to revenue, an infrastructure advisor says. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => call-for-councils-to-consider-automated-cars [to_ping] => [pinged] => [post_modified] => 2018-06-08 09:13:08 [post_modified_gmt] => 2018-06-07 23:13:08 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30635 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 2 [filter] => raw ) [3] => WP_Post Object ( [ID] => 30554 [post_author] => 658 [post_date] => 2018-06-08 08:32:00 [post_date_gmt] => 2018-06-07 22:32:00 [post_content] => [caption id="attachment_30556" align="aligncenter" width="635"] PPPs have the best chance of success when risk is 'properly and robustly quantified.'[/caption] As Australian governments and private enterprise partners on a multi-billion dollar infrastructure pipeline, it’s incumbent we reduce the likelihood of cost overruns, writes Paul Sullivan. Australia is going through a major construction boom, undertaking projects across every state and territory to accommodate our growing population and futureproof our cities. Melbourne and Sydney metros, the Westgate Tunnel, the Brisbane Cross River Rail, the Roe 8 project in Western Australia, school precinct developments across the eastern seaboard - the list is extensive. [caption id="attachment_30568" align="alignright" width="153"] Paul Sullivan[/caption] Such large scale, transformative projects are often delivered through public-private partnerships (PPPs), which are considered a preferred procurement method for high value, high risk (HVHR) projects because of the distribution of risk across parties. But are we quantifying risk as we should? And what are the consequences for the funding and delivery of major projects? There are cases where PPPs have gone wrong and government can be left picking the pieces at the taxpayer’s expense, particularly where running costs are involved. A major principle of the PPP risk-sharing is that contingency funds can be reduced, and if an unknown cost does eventuate, the project proponents pay only the value of that cost.  This is in contrast to conventional procurement methods - such as competitive tender, construction management and shared saving contracts - where a head contractor carries most of the risk and requires a larger contingency fund. On a level playing field, the end turnout cost of a project delivered via a partnership agreement should be less than if delivered through conventional procurement methods. PPPs, like all projects, have the best chance of success when risk is properly and robustly quantified and when ownership is taken on by the party best equipped to manage the risk. However, the question of risk is often the source of cost blow-outs, project delays and public perceptions of loss of taxpayer money going to private contractors. How can this be mitigated?

Quantify all risks

Departments of treasury and finance factor in known knowns - risks that can be quantified in terms of their likelihood and potential consequence. But they only quantify, to some extent, the known unknowns, and they do not quantify at all the unknown unknowns. A known unknown risk could be adverse ground conditions, where the potential hazard can be identified, but there is no basis upon which to estimate the likelihood of the event occurring or the impact on the costs of the project if it did. Further investigation can change a known unknown to a known known, and then enable us to quantify the risk. An unknown unknown risk could be unexpected weather patterns or finding archaeological relics when excavating a site; these are risks that cannot be reasonably identified or costed.  The private sector should not be saddled by these risks, and it’s similarly unpalatable for government to be so. This is where the perception that PPPs “always blow their budgets” comes from.   For unknown unknowns, an evaluation of likelihood and consequence should be attempted, utilising benchmarking from similar works on previous projects, and the knowledge of highly experienced people. In the event of the contingent funds not being used, the reserve is retained by the financier or project proponents and does not convert to profit.  If all project proponents sought to quantify risk more fully, then this could be shared and costed more appropriately across parties in HVHR projects. A lenders technical advisory role consultant can provide an “additional set of eyes” to give confidence in the project budget.  

Allocate risk to most appropriate

Best practice risk management allocates risks to the party best able to manage it, and therefore at the least cost to the project.  But in practice, the risk often gets pushed down to the contractor and sub-contractors, who in turn include a higher contingency sum in their contracts. One reason why small contractors go out of business so often is that they’re not equipped to understand or deal with the risk when things turn pear shaped. Project proponents must ensure they are engaging suitably qualified contractors, with the wherewithal to handle the works being let, and ensure that the various risks are “owned” by the party most equipped to deal with that risk.

Thorough analysis

Too many project proponents don’t have a full enough understanding of probabilistic risk analysis and its application. While a complex process, it is worth sourcing appropriate experts to bring a fuller understanding of the risks and opportunities, throughout the life of the project. Since PPPs are a partnership between government and private enterprise, it’s up to project proponents to engage qualified specialists to facilitate risk and opportunity workshops. Professional risk workshops are the best way to counter inherent optimism bias which, if left unchecked, can lead to an overestimation of benefits. In large infrastructure projects, this can manifest as overly optimistic cost estimating, under-estimated risk consideration and a higher contingency sum. The $554 million Sydney Cross Harbour Tunnel provides an interesting example where revenue projections exceeded actual collections. This was most likely the result of optimism bias, where traffic engineers anticipated higher traffic levels, combined with government’s re-opening of certain road closures to appease public demand and causing "leakage" of traffic numbers. The failure was more about toll revenue being lower than anticipated, rather than a blow out in construction cost, but the result was the same. If all HVHR project proponents undertook probabilistic risk analysis, participated in Rrisk workshops to a greater degree, and carried the process through to project completion, the risk of large overruns would be diminished. The majority of PPPs have had good outcomes, such as the Victorian Comprehensive Cancer Centre, Melbourne City Link, AAMI Stadium and Ravenhall Prison. In these instances, it’s likely that the private proponents were some of the most experienced in the country and carried out risk analysis in the best and fullest manner, using suitably experienced and qualified contractors. As Australian governments and private enterprise partner to deliver a multi-billion dollar infrastructure project pipeline, it’s incumbent on all parties to ensure a procurement method that will keep risk pricing, or contingency funding, to a minimum and reduce the likelihood of cost overruns. PPPs are best suited to HVHR projects which are of such a magnitude that the only way to deliver them is with partnership funding. For this model to work effectively, we need to focus on appropriately defining, quantifying, allocating and costing risk.
Paul Sullivan is state director at WT Partnership, a project and cost management advisory.
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[post_title] => Are we getting risk wrong in public-private partnerships? [post_excerpt] => As Australian governments and private enterprise partners on a multi-billion dollar infrastructure pipeline, it’s incumbent we reduce the likelihood of cost overruns, writes Paul Sullivan. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => are-we-getting-risk-wrong-in-public-private-partnerships [to_ping] => [pinged] => [post_modified] => 2018-06-08 09:12:56 [post_modified_gmt] => 2018-06-07 23:12:56 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30554 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 3 [filter] => raw ) [4] => WP_Post Object ( [ID] => 30581 [post_author] => 675 [post_date] => 2018-06-05 10:15:08 [post_date_gmt] => 2018-06-05 00:15:08 [post_content] => [caption id="attachment_30584" align="aligncenter" width="589"] 'Forward thinking' councils are engaging in data-backed risk profiling, analysis says.[/caption] Infrastructure, financial sustainability and health and safety are the greatest risks for local government, according to a new analysis that finds many councils are failing to adequately prepare. More than half of all councils are failing to execute practices to “rein in” some of their greatest risks, including human and environmental issues, according to Aon’s annual risk report on local government. According to the global professional services firm’s 2018 Local Government Risk Report, a fifth of councils have no process at all for risk profiling, with most relying on their appointed insurance broker. Risk profiles would ensure councils have a comprehensive understanding of risks within their unique risk profile, the firm says. The report said that “forward thinking” councils are engaging in data-backed risk profiling, gap analysis and developing and implementing strategies to enhance employee engagement and protect the wellbeing of workers. [caption id="attachment_30585" align="alignright" width="139"] Paul Crapper[/caption] “They measure and manage their risk appetite and test the market for the most effective coverage. Avoiding overbuying frees financial resources to employ into council programs and projects for the benefit of the community,” the report said. Aon’s analysis ranked local government in the bottom of all sectors analysed, finding only 23 per cent of councils tender for insurance and risk management. Councils that proactively manage risks and employ best-practice claims management are viewed more favourably by insurers and achieve more “financial benefit”, the report said. Paul Crapper, Aon’s head of local government, said that a fifth of councils aren’t auditing their workplace health and safety (WHS) requirements. “The big issue for a lot of councils is they have the same level of compliance requirements as other councils but may not have financial resources or people resources to adequately audit WHS on a regular basis,” Mr Crapper told Government News.

Key risks revealed

The report revealed that infrastructure remains the greatest issue for local government, followed by financial sustainability. Health and safety, cyber security and reputational issues were the next big concerns for local governments, the analysis found. [caption id="attachment_30589" align="alignnone" width="458"] Source: Aon's 2018 Local Government Risk Report [/caption] Cyber security jumped four places as a risk for councils this year, only entering the top 10 in last year’s report, while reputational concerns are being exacerbated by social media, the report said. Mr Crapper said that the introduction of mandatory reporting by the Federal Government has increased awareness among councils of the risks posed by cyber threats. “Councils are starting to understand and recognise cyber as a risk exposure they need to mitigate,” he said. Funding squeezes and rate capping, particularly in NSW and Victoria, as well as increasing ratepayer expectations have placed pressure on councils and ensured that infrastructure and financial sustainability are key risks, the report says. “Not surprisingly the unrelenting challenge to do more with less ensured that the financial challenges of infrastructure, financial sustainability and stability lead the list of risks for local government,” the report said.

Growth prompts infrastructure risk

Mr Crapper said that the rate of municipal growth is another key factor causing infrastructure to take the lead as the greatest risk for councils. “Councils going through such high levels of municipal growth struggling to keep up with delivery of all the infrastructure required for that level of growth,” he said. A “widening asset renewal gap” is also placing financial pressure on councils, as councils seek to implement new infrastructure whilst maintaining old infrastructure, the report said. The report also flagged issues relating to human resources, asset protection, funding, planning decisions and weather events as among the top 10 risks for councils. The Aon findings come as the Victorian Auditor General completes a performance audit looking at insurance risks, including whether councils are “prudently managing their insurable risks.”
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[post_title] => Councils failing to act on biggest risks: report [post_excerpt] => Infrastructure, financial sustainability and health and safety are the greatest risks for local government, according to a new analysis that finds many councils are failing to adequately prepare. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => councils-failing-to-act-on-biggest-risks-report [to_ping] => [pinged] => [post_modified] => 2018-06-08 09:13:22 [post_modified_gmt] => 2018-06-07 23:13:22 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30581 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [5] => WP_Post Object ( [ID] => 30507 [post_author] => 658 [post_date] => 2018-06-01 10:09:24 [post_date_gmt] => 2018-06-01 00:09:24 [post_content] => [caption id="attachment_30509" align="aligncenter" width="593"] Councils in NSW are starting to collaborate on management and accountability issues.[/caption] While the NSW Government legislates for local government to work together in formalised groups, a diverse band of councils has already initiated their own alliances, writes Annalisa Haskell. What a difference a punishing audit or two can make in galvanising a sector.  The need to improve local government performance, and find the means to do so, reached a new intensity in recent months, perhaps most acutely in NSW where the NSW Audit Office report has been tabled in parliament after much discussion. [caption id="attachment_28375" align="alignright" width="141"] Annalisa Haskell[/caption] In addition, as the NSW Government has embedded joint organisations into legislation there is an expectation that councils can and will work much closer together in formalised groups, on behalf of their regions. While the sector digests these latest developments, a diverse band of Australian and New Zealand councils has taken pre-emptive action to initiate their own alignments as strategic groups. The collaborations - in addition to their existing individual approaches to performance improvement - have the potential to bring significant operational change for the benefit of the whole sector.

New era of collaboration

More than 70 councils have embraced a new data window within the Australasian LG Performance Excellence Program as a means to collaborate on local government management and financial accountability. While the performance measurement program has been delivering comparative data and strategic insights over the past five years, the newly introduced grouping feature creates an opportunity for councils to form clusters and work on strategies that strengthen financial, operational and management capability. This methodology could provide a creative model for a new era of cross-city, cross regional collaboration. It will also be helpful for councils to see how they perform together as they address additional cost pressures such as rate capping.

Strategic creativity

Western Australia is leading cross-city metropolitan planning with eight major metropolitan councils now in their working window, made up of City of Cockburn, City of Canning, City of Joondalup, City of Swan, City of Melville, City of Gosnells, City of Rockingham and City of Wanneroo. There are another 13 strategic clusters operating across NSW and New Zealand, with nine of those formed in just the last month. Among them are some standout examples. Almost all of the recently amalgamated or merged NSW councils have formed a unique cluster, made up of: Armidale Regional Council, Cumberland Council, Hilltops Council, Mid-Coast Council, Murrumbidgee Council, Queanbeyan-Palerang Regional Council, Snowy Valleys Council, Georges River Council and Snowy Monaro Regional Council. It’s unlikely that recently amalgamated councils anywhere else in the world have had access to comparative data in one profile for the purpose of learning and performance improvement. Similarly, a new NSW regional cities collaboration consists of Albury City Council, Armidale Regional Council, Coffs Harbour City Council, Griffith City Council, Lismore City Council, Mid-Coast Council, Port Macquarie-Hastings Council, Tamworth Regional Council, Tweed Shire Council and Queanbeyan-Palerang Regional Council.

Plan together using data

There’s no doubt that local government service models need to evolve and it will be essential for all councils to look outside of themselves and plan together using robust data. As a result, a much broader view of the value of local government will be visible as it intersects with key levels of government and other stakeholders.
Annalisa Haskell is CEO of Local Government Professionals, NSW.
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[post_title] => Strength in numbers: councils collaborate on key issues [post_excerpt] => While the NSW Government legislates for local government to work together in formalised groups, a diverse band of councils has already initiated their own alliances, writes Annalisa Haskell. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => strength-in-numbers-councils-collaborate-on-key-issues [to_ping] => [pinged] => [post_modified] => 2018-06-01 10:10:35 [post_modified_gmt] => 2018-06-01 00:10:35 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30507 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [6] => WP_Post Object ( [ID] => 30488 [post_author] => 675 [post_date] => 2018-05-29 08:15:02 [post_date_gmt] => 2018-05-28 22:15:02 [post_content] => [caption id="attachment_30489" align="aligncenter" width="617"] Governments underestimate how much regulation disrupts investment, says Dean Dalla Valle.[/caption] Industry calls on government to encourage private freight investment by streamlining regulation and to make greater use of rail. The head of one of Australia’s largest rail freight businesses has said the Australian Government needs to arrest a year-on-year drop in infrastructure investment by slashing unnecessary red tape. CEO of Pacific National Dean Dalla Valle told a CEDA event on Friday that governments often “underestimate how disruptive poorly designed regulations can be,” adding that investment would “only flow where there is political certainty.” Citing Infrastructure Partnerships Australia analysis that found 62 per cent of investors identified “political risks” in freight, Mr Dalla Valle said the Commonwealth can support private investment through “simplified, harmonised regulation”. “The heart of the issue involves government and industry partnering to enable the safest and most productive supply chains through a harmonised approach to rail regulation,” he said. Clare Gardiner-Barnes, NSW’s deputy-secretary for freight, told the Sydney audience that the State Government is looking to amend its regulations and legislation to reduce bureaucracy and increase flexibility. She said the NSW Freight and Ports Plan, which is set for release later this year, will provide greater certainty to industry and support investment.             A coordinated intergovernmental approach and improved partnerships with industry are critical to support the growing freight task, she said.

Call for ‘rail renaissance’

Both Mr Dalla Valle and Ms Gardiner-Barnes pointed to Australia’s road-dominated approach to freight as a key supply chain issue. Mr Dalla Valle deemed the volume of trucks dominating Australian freight as “unsustainable”, pointing to traffic congestion, emissions and the high number of heavy vehicle fatalities. “Our major motorways and highways are at risk of becoming a conveyor belt of trucks,” he said. Rail is safer and reduces congestion and emissions, he argued, pointing to a Deloitte report which found a typical freight train can take 65 trucks off the road and produces 16 times less pollution. Although the shift towards rail was starting to gain traction within the government’s infrastructure pipeline, Mr Dalla Valle said more progress is needed. Ms Gardiner-Barnes said the NSW Government is “committed” to working with industry to increase the rail freight share by 28 per cent by 2021.

COAG agrees framework

Earlier this month the Council of Australian Governments agreed a framework for developing a 20-year national Freight and Supply Chain Strategy, which transport ministers say builds on the findings of the report of the Inquiry into National Freight and Supply Chain Priorities. That report, which was released on 18 May, advocated a coordinated national approach by all levels of government in order to meet freight demand, which is forecast to triple by 2050. Local government peak bodies have been calling for more coordination with councils on freight strategy and infrastructure. David O’Loughlin, president of the Australian Local Government Association said his peak will be collaborating with the Commonwealth and states on the National Freight and Supply Chain Strategy to ensure the role of local government is supported.        
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[post_title] => Freight investment turns on government regulation: CEO  [post_excerpt] => Industry calls on government to encourage private freight investment by streamlining regulation and to make greater use of rail. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => freight-investment-turns-on-government-regulation-ceo [to_ping] => [pinged] => [post_modified] => 2018-06-01 10:10:59 [post_modified_gmt] => 2018-06-01 00:10:59 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30488 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 1 [filter] => raw ) [7] => WP_Post Object ( [ID] => 30413 [post_author] => 674 [post_date] => 2018-05-25 08:05:02 [post_date_gmt] => 2018-05-24 22:05:02 [post_content] => [caption id="attachment_30415" align="aligncenter" width="609"] NSW's policy tackles barriers to government supply chains for Aboriginal businesses, experts say.[/caption] Experts have praised the Berejiklian Government’s new indigenous procurement policy but caution effective implementation and broader efforts to nurture businesses are crucial. Three per cent of the NSW Government’s goods and services contracts will be offered to Aboriginal owned businesses under the state’s new Aboriginal Procurement Policy, which the government says will support 1,000 Aboriginal jobs a year over three years. Given it spends $20 billion each year on goods and services contracts, Premier Gladys Berejiklian said the State Government was in a unique position to offer practical support for the creation of Aboriginal employment. “These jobs could include electrical services, catering, recruitment and landscaping,” she said while launching the policy last week. Under the changes, government agencies will be able to procure goods and services up to $250,000 directly from Aboriginal businesses, an increase on the current limit of $150,000. The policy will also see procurement activities over $10 million required to “consider” employment opportunities for Aboriginal people and engagement of Aboriginal businesses. For the first time, the government says it will track the number of jobs supported through the policy in addition to the number of contracts awarded.         

Substantial policy: expert

[caption id="attachment_30449" align="alignright" width="149"] Michelle Evans[/caption] Michelle Evans, an academic and partnership broker who leads research on indigenous business at the Asia Pacific Social Impact Leadership Centre, welcomed the policy, saying it appeared to tackle the barriers to government supply chains facing Aboriginal businesses. “It follows the Federal Government’s great work in the indigenous procurement policy space, which has seen so many businesses come into the supplier chain of the government at the federal level,” she told Government News. Dr Evans said that efforts to boost Aboriginal businesses would lead to job creation:
“We know that Aboriginal businesses are 30 per cent more likely to employ Aboriginal and Torres Strait Islander people.”
However, she said there were many different types of Aboriginal businesses and not all would benefit from a procurement policy, which means governments need to think of other ways of providing support. “A lot of Aboriginal businesses, particularly the business-to-customer enterprises, are delivering cultural products and services, and they are doing it really tough. We can’t forget about these other types of businesses,” she said.

Implementation and monitoring is key

Jo Barraket, director of the Centre for Social Impact at Swinburne University, praised the policy’s inclusion of key targets. [caption id="attachment_30439" align="alignright" width="150"] Jo Barraket[/caption] “The research we’ve done in the past on social procurement suggests the only context in which there’s any semblance of success is where there’s concrete goals,” she told Government News. Recent work had highlighted a concerning lack of follow-up monitoring or evaluation of the outcomes of social procurement practices internationally, Professor Barraket said. “It’s terrific to have governments in Australia, NSW now being one of them, saying they’re going to commit to doing that work.” Professor Barraket said that while good policy is welcome, effective implementation is critical.
“What we know about procurement is that having the policy isn’t enough. Policy commitments like these require implementation and that often involves changes to systems and culture within government agencies. That’s what is needed; its policy plus implementation.”
Commenting on indigenous procurement policies more broadly, Professor Barraket cautioned governments to be aware of potential unintended consequences. “It’s reminiscent of some predatory practices that emerged when mining licences regulations changed about a decade ago to commit mining companies to stronger local economic development. We’re starting to hear anecdotal information about large firms building effectively shell companies in Aboriginal communities and embedding those in their supply chains in order to meet targets,” she said. Australia was fortunate to have Supply Nation as an intermediary given it undertakes a lot of the certification and due diligence work, Professor Barraket added.  "That said, there’s still scope for some predatory practices to emerge.”
Related GN coverage: Social enterprises an untapped partner for councils
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[post_title] => NSW Government boosts Aboriginal procurement [post_excerpt] => Experts have praised the Berejiklian Government’s new indigenous procurement policy but caution effective implementation and broader efforts to nurture businesses are crucial. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => nsw-government-boosts-aboriginal-procurement [to_ping] => [pinged] => [post_modified] => 2018-05-25 10:02:44 [post_modified_gmt] => 2018-05-25 00:02:44 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30413 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [8] => WP_Post Object ( [ID] => 30209 [post_author] => 674 [post_date] => 2018-05-08 10:59:55 [post_date_gmt] => 2018-05-08 00:59:55 [post_content] => [caption id="attachment_30210" align="aligncenter" width="604"] The Federal Government hands down its budget this evening.[/caption] A new $300 million a year community infrastructure fund and a boost to grants are among the measures local government are hoping to see in tonight’s federal budget. Last year’s budget brought the welcome restoration of indexation to financial assistance grants but local government peaks say councils are still dealing with the shortfall caused by the three-year freeze on base payments. Councils have called on the Federal Government to restore the grants to a level equal to 1 per cent of Commonwealth tax revenue – a level of payment not seen since 1996. “Financial assistance grants have declined and now amount to approximately 0.57 per cent of Commonwealth tax revenue,” says Linda Scott, president of Local Government NSW. “That’s a drop of about 43 per cent in relative terms, which can’t help but have a very significant impact on local government’s ability to provide and maintain community infrastructure.” Councils have also called on Canberra to deliver a boost to funding for local infrastructure given the documented maintenance backlog facing councils. In its pre-budget submission the Australian Local Government Association called for a new community infrastructure fund of $300 million per year for four years. Local government has also sought a doubling of the Roads to Recovery funding in the budget, and the establishment of a Local Freight Productivity Investment Plan, funded at $200 million per year for five years, and for the Bridges Renewal Program to be made permanent. “Each of our proposals will boost local economies as well as the national economy by – when considered together – adding more than $9.5 billion to GDP and more than 24,000 new jobs, with most jobs created in the regions,” says ALGA president David O’Loughlin.

Rail commitment welcomed  

Elsewhere, yesterday's confirmation by the Prime Minister and Deputy Prime Minister that the budget will commit $400 million to duplicate the freight rail line from Port Botany to Enfield has been welcomed by logistics groups. The funding commitment was a vital recognition of the central role intermodal terminals will play in modernising urban supply chains, the Australian Logistics Council said yesterday. ALC managing director Michael Kilgariff said the Commonwealth Government should build on last year’s budget investment made in inland rail by supporting dedicated connections to key ports and making freight rail projects eligible for funding support under the National Rail Program. ALC has also urged the government to establish a Freight Strategy and Planning Division within the Department of Infrastructure and a body to gather to gather and analyse data on supply chain performance.
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[post_title] => Councils look to budget for funding boost [post_excerpt] => A new $300 million a year community infrastructure fund and a boost to grants are among the measures local government are hoping to see in tonight’s federal budget. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => councils-look-to-budget-for-funding-boost [to_ping] => [pinged] => [post_modified] => 2018-05-08 11:00:15 [post_modified_gmt] => 2018-05-08 01:00:15 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30209 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [9] => WP_Post Object ( [ID] => 30079 [post_author] => 675 [post_date] => 2018-04-27 10:27:39 [post_date_gmt] => 2018-04-27 00:27:39 [post_content] => [caption id="attachment_30113" align="aligncenter" width="560"] NSW's rate-capped councils performed worse than SA counterparts, analysis shows.[/caption] As an inquiry in Victoria hears evidence against rate capping, new research finds that the introduction of rate capping in South Australia could restrict council service delivery, cause infrastructure decay and result in higher charges for taxpayers. The analysis by the UNE Business School compared South Australia with the rate-capped NSW and concludes that “rate-pegging should not be imposed on South Australia's local government and instead other more promising policies considered.”   Professor Brian Dollery, an expert on the economics of local government, said that on three key measures – revenue effort, financial sustainability and efficiency - the rate-capped NSW councils performed on average inferior to the South Australian counterparts. While proponents argue rate-capping limits council spending, Professor Dollery said his research found municipal expenditure in NSW did not reduce per capita and councils had racked up higher infrastructure debts. “The main claim is rate pegging will force councils to become more efficient, so operational efficiency will increase and thereby rate payers get more value for money. That isn’t the case,” he told Government News. The study follows his earlier work in 2015 comparing NSW with Victoria, which similarly found evidence that rate capping negatively impacted municipal revenue effort, equity, debt and infrastructure maintenance. The latest findings comes just months after the newly elected Liberal government pledged to introduce rate-capping in South Australia and allow an independent regulator to set the rate rise councils are allowed to apply based on the cost of services local government provides. In both Victoria, which introduced rate capping in 2015, and NSW, where it has been in place since 1977, the practice remains highly contentious. A NSW Legislative Inquiry report in 2015 recommended an end to rate capping in the state. Councils in NSW have for decades blamed the practice as a key cause of their financial woes. As Government News reported on Tuesday, the state’s Local Government Association this week pointed to rate capping as a contributor to councils’ infrastructure backlog.

Infrastructure deficit

Based on his analysis, Professor Dollery argues that rate-capping is a particularly “draconian” form of regulation. He said his research revealed that the greatest risk associated with rate-capping is the decay of infrastructure, with NSW building up an “infrastructure deficit” through four decades of rate-capping. “What councils do is typically maintain the visible services so they politically speaking can cope with the problem but the invisible side of council operations, that is to say, infrastructure renewal and maintenance are put off,” he said.   Professor Dollery cited a PricewaterhouseCoopers study from 2006 that found billions of dollars of infrastructure backlogs had built up in NSW. The Municipal Association of Victorian (MAV) last month told a Victorian parliamentary inquiry into rate-capping that the practice had left small rural councils struggling to maintain services and assets. Financial projections by Local Government Victoria showed capital spending in rural shires would drop by 30 per cent from 2016-2020, MAV said.

Hidden costs for taxpayers

Stephan Knoll, South Australia’s Minister for Local Government, says that profligate spending over the past decade has seen council rates increase at almost three times the rate of inflation and argues that rate capping will ease the burden on taxpayers. But Professor Dollery refutes such a claim, saying that there are hidden costs associated with rate-capping through increased council fees and charges:
“You can’t claim that there’s money saving going on. Rate-payers are also tax payers to the state government and federal government so however you tackle the infrastructure problem people are paying for it somewhere. There’s no escape.  It’s not a magic bullet.”
On Monday, the Local Government Association of South Australia president Lorraine Rosenberg rejected Minister Knoll’s claims that the state’s councils had been “gouging ratepayers,” saying that they have the second lowest rate increases in Australia. The state’s LGA remains strongly opposed to rate-capping. “We are focused on intelligent local government reforms such as boundary reform, benchmarking and shared services, which will deliver efficiencies and better outcomes for communities,” the peak body says. Government News sought comment from Minister Knoll but a response was not provided by deadline.

Political consequences: “blame shifting”

Professor Dollery also raised concern that rate-capping in NSW and Victoria has resulted in a “blame shifting culture” in which councils deflect responsibility to the state government for failed service delivery due to the introduction of rate-capping. NSW and Victoria are edging towards a “rate-capping in name only system,” in which the State Government dilutes the rate capping regime for fear of not having the political courage to abolish it, he said. Professor Dollery argues that rates should continue to be charged by councils, both to reduce the negative impacts of rate-capping and to address what he calls a “vertical fiscal imbalance.” “The Commonwealth collects the most money but has few expenditure responsibilities. Imposing on rate-capping worsens ’vertical fiscal imbalance‘ by limiting the revenue of local government.” Professor Dollery instead proposes “state accords” as a means of addressing cost-shifting from the state to local government. This would involve the local government signing a treaty with the state government, in which both agreed to undertake and pay for certain responsibilities. The South Australian Government is slated to introduce legislation imposing rate-capping on local governments into parliament by mid-year.   Victoria’s parliamentary inquiry into rate capping will issue its final report in September.
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[post_title] => Research warns South Australia on rate cap [post_excerpt] => As an inquiry in Victoria hears evidence against rate capping, new research finds that the introduction of rate capping in South Australia could restrict council service delivery, cause infrastructure decay and result in higher charges for taxpayers. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => research-warns-south-australia-on-rate-cap [to_ping] => [pinged] => [post_modified] => 2018-04-27 16:31:13 [post_modified_gmt] => 2018-04-27 06:31:13 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30079 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 1 [filter] => raw ) [10] => WP_Post Object ( [ID] => 30041 [post_author] => 674 [post_date] => 2018-04-24 09:30:19 [post_date_gmt] => 2018-04-23 23:30:19 [post_content] => [caption id="attachment_29770" align="aligncenter" width="562"] NSW's Auditor-General delivered her first financial audit of local government.[/caption] More than half of NSW’s councils are struggling to renew and maintain their infrastructure, according to the state’s auditor who says financial reporting in local government needs to improve. Auditor-General Margaret Crawford’s first financial audit of local government has found variable financial performance and reporting, poor use of audit committees and lapses in IT security. NSW councils own and manage $136 billion worth of assets, including infrastructure, property, plant and equity. But the audit of 139 councils, released on Friday, found that 84 local governments were not meeting benchmarks for managing their infrastructure maintenance backlog, while 70 were not renewing their assets in line with depreciation. It also identified that 71 councils were not maintaining their assets in accordance with their asset management plans, and 13 councils did not have the required asset management strategy and policy in place.   Ms Crawford also found $145 million worth of land and infrastructure at 24 councils that were not recorded in asset registers or financial statements.

Financial reporting, performance 

Overall, the auditor found that the quality and timeliness of financial reporting in the local government sector needs to improve. She identified 43 councils that needed to improve the way they prepare their financial statements. Ms Crawford issued unqualified audit opinions on the 2016−17 financial statements of 136 councils, and qualified audit opinions for three councils. A further 22 councils required material adjustments to correct errors in previous audited statements, she said. Her report identified 53 councils that did not have an audit committee and 52 that did not have an internal audit function.
“We found that councils can strengthen governance measures by having audit committees and internal audit functions...”
The audit found 18 councils had operating expenses that exceeded their revenue, and a further 20 councils would have also fallen short had it not been for a financial assistance grant they’d received. Some 59 local governments failed to meet the state’s target of generating 60 per cent of revenue from their own sources, she found.

Gaps in IT strategy, risk

While local government increasingly relies on IT to deliver services and manage sensitive information, the audit found that one in four councils in NSW is without an IT strategy or operational plan, and half do not have an adequate IT security policy. “Seventeen councils do not have a documented plan to recover from a disaster,” Ms Crawford noted. “Councils need to develop a plan and periodically review it,” she said. “They also need to periodically test that they can restore backed-up data to ensure business continuity in the face of a system disaster.”

Audit highlights infrastructure struggle: peak

Local Government NSW said the audit confirmed the financial constraints facing councils, which meant they did not have the revenue to meet community needs, particularly to resolve infrastructure backlogs. The peak’s president Linda Scott said the key financial constraint on councils is the NSW Government’s practice of rate capping. “We welcome the Auditor-General’s recommendations that councils be given better guidance from the NSW Office of Local Government and note the report identifies opportunities for improvement by some councils in areas such as the valuation of assets, IT governance and internal controls,” she said. Comment below to have your say on this story. If you have a news story or tip-off, get in touch at editorial@governmentnews.com.au.   Sign up to the Government News newsletter. [post_title] => Local government can do better on reporting: AG [post_excerpt] => More than half of NSW’s councils are struggling to renew and maintain their infrastructure, according to the state’s auditor who says financial reporting in local government needs to improve. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => local-government-can-do-better-on-reporting-ag [to_ping] => [pinged] => [post_modified] => 2018-04-24 09:55:25 [post_modified_gmt] => 2018-04-23 23:55:25 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=30041 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 1 [filter] => raw ) [11] => WP_Post Object ( [ID] => 29422 [post_author] => 674 [post_date] => 2018-03-13 09:35:22 [post_date_gmt] => 2018-03-12 22:35:22 [post_content] => [caption id="attachment_25246" align="aligncenter" width="461"] Last year's ANAO report on procurement contained several 'red flags', analysts say.[/caption] Inquiry hears the Department of Finance should carry out a more detailed investigation into whether there is “systematic flouting” of the procurement rules. The high use of government contracts below $80,000, which are not required to be put to market, could be a breach of procurement rules and warrants investigation, a parliamentary inquiry has been told. In addition to the “disproportionate” number of contracts just below the $80,000 threshold, the significant awarding of these contracts to the same entities is another “red flag,” analysts have told the Joint Committee of Public Accounts and Audit inquiry into government procurement contract reporting. The Grattan Institute said the Australian National Audit Office report late last year, which sparked the committee's inquiry after estimating the government spent $47 billion on contracts last year, identified “examples of contracting behaviour consistent with agencies avoiding the additional rules” including requirements to approach the market for procurements over $80,000. Since 2012-13 there have been more than 1,500 ‘contract pairs’ – contracts by the same entity for goods or services from the same supplier in the same quarter individually worth less than $80,000 – where neither contract was put to open tender, the institute noted in its submission to the inquiry. “Splitting contracts to avoid these requirements is prohibited under the procurement rules,” wrote the institute’s Danielle Wood and Lucy Percival. They argued the Department of Finance should use the ANAO report as a basis for more detailed investigation of whether there is systematic flouting of the procurement rules. “The department should conduct such a review annually, using the types of screens for potential non-compliance set out by the ANAO,” they said. Similarly, the McKell Institute’s executive director James Pawluk said the ANAO had identified “a disproportionate number of contracts valued just below $80,000” and the significant occurrence of multiple such contracts with a single entity. “This raises concerns about possible deliberate attempts to avoid the additional rules imposed on procurements above that threshold, but it could also be that during the fulfilment of some contracts additional requirements were identified that are outside the scope of the initial contract,” he said.

Accountability on timing, cost overruns

The Grattan Institute said another red flag in the ANAO report was the increase in contracts commencing in June, which might reflect public servants aiming to spend their budget for the year so as to maintain their allocation in future years. “This type of ‘use-it-or-lose-it’ mentality risks diverting focus from the requirements to ensure value for money, as set out in the procurement rules,” it said. It also flagged the “limited public accountability on timing and cost overruns for government contracts” in the current system. “Cost and time overruns are common in these contracts. The ANAO report showed that 17 per cent of non-Defence contracts were amended for one or both of value and end-date within 12 months. Where value was amended, it was increased by more than 50 per cent on average. And the average time extension was more than six months.” The institute cited its own analysis on overruns on transport infrastructure projects for the past 15 years that showed they cost 24 per cent more on average than initially estimated.

Identifying consultancy spending

Referring to suggestions that similar types of services, and services from the same providers, are classed as consultancies under some contracts but not others, the Grattan Institute said its analysis had highlighted similar issues. ‘Management advisory services’ is the largest category by value of consulting services provided to the Commonwealth yet most contracts for this category are not classified as consulting, the think tank said. “This reinforces the concerns articulated by the ANAO about the identification of consulting expenditure by agencies,” the institute said. It pointed out the value of consulting contracts for 2016-17 was revised downwards by $180 million since the ANAO report was released last December, highlighting the "inconsistency in the identification of consulting." 
“The June 2017 AusTender data specified Commonwealth Government agencies entered into $681 million value of consulting contracts in 2016-17... But the most recent AusTender data shows the value of consulting contracts was only $499 million for 2016-17.”
The Grattan Institute said that some contracts were clearly re-classified in the database as general contracts rather than consulting spending. Many appeared to be Department of Defence contracts for engineering services and building construction and maintenance services. “The Department of Finance should audit compliance with the definition, and use the findings to work with agencies to improve their classifications,” the analysts said.

Improved reporting, data

Both institutes made recommendations to the committee around the need to improve procurement reporting. AusTender data in its current form “cannot provide a reliable picture of trends in government procurement spending or use of consultants,” the Grattan Institute submission said. “Improving reporting processes and compliance with existing definitions would help make the data more useful in this regard.” The McKell Institute said the inquiry should look at ways to improve the quality, timeliness and usefulness of reported data “by leveraging new IT platforms and services.” “In the ‘big data’ era, there should be opportunities to significantly improve the visibility of government contracts while reducing the administrative burden rather than adding to it,” it said.
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If you have a news story or tip-off, get in touch at editorial@governmentnews.com.au.  
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After nearly a year of negotiations, the Commonwealth Government has reached an agreement with the New South Wales and Victorian Governments to take full ownership of Snowy Hydro, as the first step to its proposed Snowy 2.0 project. Under the deal, flagged in the 2017 Federal Budget, NSW will get $4.154 billion and Victoria $2.077 billion, reflecting their respective Snowy shareholdings. There is a ‘broad commitment’ that the money will be spent on ‘productive infrastructure projects’. The agreement paves the way for the Snowy 2.0 pumped hydro project to proceed to a final investment decision by the independent Snowy Hydro board. “The purchase will see this iconic infrastructure remain in Australian Government hands and NSW and Victoria will receive a fair market value for an important energy asset,” said Prime Minister Malcolm Turnbull. “The deal will be contingent on the Victorian Parliament confirming the sale and the Commonwealth Parliament passing an appropriation bill.” Key terms reached as part of the purchase are:
  • The Australian Government will increase its shareholding from 13 percent to 100 per cent by purchasing NSW’s 58 percent and Victoria’s 29 per cent shareholdings.
  • NSW and Victoria will invest proceeds of the sale into productive infrastructure.
  • NSW will provide all reasonable assistance to Snowy Hydro in relation to its current and future operations (including planning and approvals process for Snowy 2.0).
  • The Australian Government will provide an assurance that Snowy Hydro will continue to be in public ownership, and employment levels and existing head office locations will not change.
  • There will be no change to current arrangements on water issues.
  • The transaction will not affect allocations of GST for NSW or Victoria.
Snowy Hydro owns and operates 5,500 MW of generation capacity, including the Snowy Mountains Scheme. Snowy 2.0 is a proposed expansion of the Snowy Mountains Scheme and will provide an additional generation capacity of 2000 MW to power about 500,000 homes at peak demand. Snowy Hydro released a Feasibility Study for Snowy 2.0 in December 2017, which declared the project to be ‘both technically and financially feasible’. The Government has promoted the project as proof of its renewable energy credentials, but critics have branded it as window dressing, because it is not accompanied by any commitment to increasing renewable energy targets.   [post_title] => $6 billion Snowy purchase agreed [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => 6-billion-snowy-purchase-agreed [to_ping] => [pinged] => [post_modified] => 2018-03-02 09:29:17 [post_modified_gmt] => 2018-03-01 22:29:17 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=29275 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [13] => WP_Post Object ( [ID] => 29237 [post_author] => 673 [post_date] => 2018-02-26 15:14:19 [post_date_gmt] => 2018-02-26 04:14:19 [post_content] =>

A new report from Infrastructure Australia is calling for the Federal Government to take leadership in securing the global competitiveness of Australia’s two largest cities, Sydney and Melbourne. The report recommends that the Government establish a framework of incentives to improve the productivity, liveability and affordability of our largest cities. “Australia's cities are the powerhouses of our economy and they need to be a national priority of government,” said Infrastructure Australia CEO Philip Davies. “Asia's global middle class, as well as our own rapidly growing population, will unlock new economic frontiers for Australia, but we need to position our cities to take advantage of this historic opportunity. Australia needs to start setting national objectives that allow our cities to realise their full potential and remain globally competitive. “The Australian Government is right to think that investment shouldn't just come in the form of give and forget grants. We need to introduce more structure and accountability by tying funding for our cities to clear national performance outcomes.” The report says that stronger national leadership will give Australia he opportunity to fund its infrastructure in a way that incentivises the delivery of nation-shaping reforms. “That is why we are recommending that the Australian Government establish a consistent framework of incentives to drive the delivery of national benefits within our cities at the project, place and reform level.” Mr Davies said. The recommended framework includes a hierarchy of three incentive types:
  • National Partnership and Project Agreements, which make project funding contingent on meeting specified outcomes across the project lifecycle and demonstrated economic benefit.
  • City Deals, which apply a series of locally and nationally informed objectives to a city or part of a city, and make infrastructure payments for the area contingent on meeting those objectives.
  • Infrastructure Reform Incentives, which would provide additional infrastructure funding above existing allocation in return for the delivery of policy and regulatory reform focused on improving the productivity, liveability and affordability of Australian cities.
Mr Davies said that o be successful, the design and implementation of these incentives would need to be informed by a well-evidenced national investment and reform agenda for Australian cities. The paper models long-term growth scenarios for Melbourne and Sydney and assesses their performance across a range of indicators. These include performance of the transport network, access to jobs, environmental performance of the road network, access to and demand for social infrastructure, and access to and demand for green space. The paper, ‘Future Cities: Planning for our growing population’, is available here. [post_title] => Leadership needed on Sydney and Melbourne’s growth, says Infrastructure Australia [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => leadership-needed-sydney-melbournes-growth-says-infrastructure-australia [to_ping] => [pinged] => [post_modified] => 2018-02-26 15:14:19 [post_modified_gmt] => 2018-02-26 04:14:19 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=29237 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) ) [post_count] => 14 [current_post] => -1 [in_the_loop] => [post] => WP_Post Object ( [ID] => 30837 [post_author] => 674 [post_date] => 2018-06-22 09:11:47 [post_date_gmt] => 2018-06-21 23:11:47 [post_content] => [caption id="attachment_30857" align="aligncenter" width="710"] Councils don't always properly analyse services or business cases before entering joint delivery: auditor.[/caption] Collaboration in local government can save money and improve access to services but a new survey shows most councils are not effectively engaging in shared services. Insufficient planning, inappropriate governance and a lack of capability are among the main factors preventing more councils in NSW from efficiently and effectively engaging in shared services, according to a new report from the state’s audit office. The report, released yesterday, also found the state’s Office of Local Government did not provide specific support or guidance to councils on how to effectively share services, despite it being a widely used delivery model across the sector. The Auditor-General has recommended the OLG produce guidance on shared services for the local government sector by April 2019. The auditor’s report, based on a survey completed by 67 councils, found 87 per cent were engaged in shared services, and 27 per cent negotiating or considering future shared services.  The most prevalent areas of joint delivery were waste and recycling, environmental, road services, procurement, asset management and human resources. 

Barriers to excellence 

However, the report identified several key factors that are preventing councils from effectively and efficiently engaging in joint services. It found that local governments do not always analyse their existing services or build a business case before entering into shared service. “At a minimum, councils should assess the costs of service delivery, the resources needed to deliver them, community needs and expectations, the possibility of cost savings and increased efficiency, and alternative service delivery models (e.g. outsourcing, shared services),” the report found. Ineffective governance models were identified as another key barrier. “For each model, councils need to determine shared services membership, decision-making processes, reporting lines, and delegations,” the report said. Given shared services arrangements can involve complex planning and negotiations, the report found that capability was another factor preventing many councils from effectively executing collaborations.   “Councils do not always have the capability to identify which services to share, negotiate with partner councils, or plan and evaluate shared service arrangements. We found that many councils do not seek out support or guidance for their shared service arrangements.”

Sources of advice 

Support for identifying, negotiating, planning and evaluating shared service arrangements is available from other councils, regional organisations, peak bodies, professional associations, universities and the private sector, the audit office said. While part of the role of OLG is to work with the sector on policy and programs intended to strengthen local government, including councils' service delivery, the report said the OLG did not provide specific support or guidance to councils about effectively sharing services. “Guidance or principles to help councils decide on effective and transparent governance models would benefit the sector,” it said. It recommended the OLG develop guidance outlining the risks and opportunities of governance models that councils can use to share services. “This should include advice on legal requirements, transparency in decisions, and accountability for effective use of public resources.” For councils, the audit office recommended they base decisions about shared services on a “sound needs analysis”, review of service delivery models and a strong business case. Councils should also ensure the governance models they choose are fit for purpose, ensuring clear roles, responsibilities and accountability. Local governments should also build the capability of councillors and council staff in the areas of assessing and managing shared services, leading to better understanding of opportunities and management of risk, the report found.

OLG: welcomes report

The OLG told Government News it welcomed the auditor’s report and its observations on strengthening local government performance in shared service delivery. “The report’s recommendation that the Office of Local Government develop guidance in the risks and opportunities of shared services will provide valuable support for councils,” a spokesperson said. “The NSW Government has recently introduced a major initiative to support council collaboration and provide a robust governance framework for councils to undertake shared services through the establishment of 11 new joint organisations. “The Office of Local Government looks forward to working with the NSW Auditor-General and the Audit Office to implement the findings of the report, as we continue to support local councils to deliver high quality, value for money services for their communities,” the spokesperson said.
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If you have a news story or tip-off, get in touch at editorial@governmentnews.com.au.  
Sign up to the Government News newsletter.
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Finance

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Research warns South Australia on rate cap

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Snowy

$6 billion Snowy purchase agreed

After nearly a year of negotiations, the Commonwealth Government has reached an agreement with the New South Wales and Victorian Governments to take full ownership of Snowy Hydro, as the first step to its proposed Snowy 2.0 project. Under the deal, flagged in the 2017 Federal Budget, NSW will get $4.154 billion and Victoria $2.077 […]

Sydmelb

Leadership needed on Sydney and Melbourne’s growth, says Infrastructure Australia

A new report from Infrastructure Australia is calling for the Federal Government to take leadership in securing the global competitiveness of Australia’s two largest cities, Sydney and Melbourne. The report recommends that the Government establish a framework of incentives to improve the productivity, liveability and affordability of our largest cities. “Australia’s cities are the powerhouses […]