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Over the past five years, the reliance of audited councils on
government grants has grown substantially. While rates and charges
have increased in real terms, this has not been enough to keep pace
with councils' increases in costs. Several audited councils are
projected to have deteriorating positions against key financial
indicators, which places them at a higher risk of short-term and
immediate sustainability concerns.
Common sustainability issues and challenges across the audited
councils include having effective financial planning and asset
management, effectively and efficiently delivering services,
recruiting and retaining qualified and skilled staff and dealing
with the impact of population change. A range of strategies and
actions have been implemented to address these issues and
challenges, however, councils generally cannot demonstrate their
effectiveness and whether they are having a material impact on
improving their sustainability. Further work is required to improve
long-term financial planning, asset management and service
delivery, and to address specific challenges.
Local Government Victoria (LGV) provides a range of general
guidance and support to councils, and it has implemented actions to
assist small councils at high-risk of sustainability issues.
However, it could more proactively target small councils with
appropriate support and advice before their situation becomes
critical. LGV is developing a performance reporting framework to
provide a common suite of sustainability indicators for councils.
This may provide an opportunity for LGV to more closely monitor
councils' sustainability and respond appropriately to support them
on a timely basis.
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