State action needed for real reporting reform

Last week the NSW Audit Office released its first performance audit into NSW Local Government covering council reporting on service delivery. The report said most councils need to do a better job.

The findings come as no shock to sector professionals, who believe there needs to be a reduction in the overall reporting burdens on councils imposed by state government agencies. There is also a need for embedding performance measures into the Integrated Planning and Reporting Framework, and for the NSW Office of Local Government to progress work on the development of a Performance Measurement Framework.

Our organisation has been involved in the stalled discussions in NSW to develop an effective new statewide measurement framework for local government. It is critical that work on these measures be finalised as soon as possible, but there exists inherent sensitivity around certain council indicators that means councils cannot rely on public Performance Measurement Frameworks as indicators of internal operational performance.

While most states have public reporting frameworks to indicate a level of council performance, the efficacy of these frameworks varies considerably. But all of them lack enough contextually comparative detail on councils’ internal management of operations act as a definitive marker of council performance for staff and ratepayers.

Celebrating best practice

It is not just in NSW that concerns have been expressed on council reporting. In October 2017 the Productivity Commission released its five year productivity review ‘Shifting the Dial’. This report succinctly expressed a number of key concerns shared by local government leaders across Australia, including the need for stronger performance measures in local government to not only incentivise improvement, but to celebrate best practice.

These calls to action by two independent state and federal government bodies do not necessarily mean that the NSW Government needs to make community performance reporting significantly more arduous. Nor do they mean existing metrics should be discarded in favour of more technical approaches to performance improvement.

Responsible local government should be supported by both strong sector Performance Measurement Frameworks, and by comparative operational measures that provide deeper insights into the results.

Not all councils do exactly the same things. Even if they did, they rarely do it in the same way or in the same sociodemographic or physical context.

A frequently cited example of a strong Performance Measurement Framework is the Victorian Government’s Local Government Performance Reporting Framework. While this is a good example of community performance benchmarking, regrettably it has not automatically translated to councils talking the same language internally when it comes to measurement of operational performance at a deeper level.

In our experience, it is only in the rigour of ensuring all councils are measuring exactly the same thing in the same way that you can get a true apples and apples picture.

A three-dimensional approach

In 2012 our association began a pilot program developed with councils and in collaboration with consultancy PwC to develop a common, internally descriptive operational performance language (metrics) for councils in NSW. The need for this became self evident with the program quickly expanding across a majority of NSW councils and into Western Australia, South Australia, New Zealand and Queensland.

Now, the Australasian LG Performance Excellence Program is allowing 146 councils across Australia and New Zealand to compare internal performance indicators with any other de-identified council or groups of councils participating in the program they see as useful to compare to.

This has produced for participating councils real performance insights and explanations, with a more three dimensional perspective of their complete operations and services. This allows them to compare their performance with de-identified councils of similar size, shape, service model or purpose.

We’ve seen how this can empower councils. Many of them were previously left scrambling to explain what appears in state government models as lagging operational performance, to confidently elaborate on the context of their performance against directly comparable councils, as well as the broader sector.

It also provides confidence in the comparative nature of specific performance indicators, even in highly sensitive areas around human resources and financial management, allowing councils to de-silo their approach to driving performance and importantly, encourage much stronger regional collaboration.

For many councils, this means they are now confident in their own performance tracking. The program has emphasised the need for better community performance indicators to allow councils to link more directly their operational efforts to achieve those results for their communities.

he ball is now squarely in the NSW Government’s court. It needs to support those councils who are confident in their internal performance reporting, by delivering a strong Performance Management Framework through sector consultation, to showcase their efforts – the ones they are already measuring.

Annalisa Haskell is CEO of Local Government Professionals Australia, NSW, the leading association representing all professionals in NSW local government. It is part of a national federation of associations. Annalisa is developer of the Australasian LG Performance Excellence Program, developed in collaboration with PwC.


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