Challenge for local government – Making shared services work
An equal partnership, supported by participating councils and CT Management Group, the alliance has created a culture of respect, transparency and collaboration across the council organisations.
The Victorian Auditor-General’s report “Shared Services in Local Government” confirms,
“Most Victorian councils undertake some form of shared services, although their use is evolving and relatively immature.
While there is limited growth expected in external initiatives, there is likely to be continued growth in shared procurement and in new shared services for back office functions, such as information and communications technology, payroll and human resources.
This provides a significant opportunity for the sector to realise cost savings and other benefits.”
The report also recognises that “a lack of baseline data and other information makes it difficult to quantify the full extent of both financial and non-financial benefits from shared services being realised by Victorian councils, and there is significant scope for improvement in monitoring, evaluation and reporting.”
Taking up the challenge
In the North East of Victoria, two councils, the Greater Shepparton City Council and the Strathbogie Shire Council, have taken up this challenge head on.
The councils are aware that financial pressures, coupled with community expectations, are just a some of the increasing challenges that need to be addressed by local government.
For councillors and officers, getting the balance right is a difficult challenge. Nevertheless, the shared services environment has been recognised as a mature way to maximise opportunities and to make financial savings wherever possible.
This particularly applies to the purchase of capital equipment, where there can be economies of scale when ordering for a combined group of municipalities, or where some equipment purchased can be used by all councils, removing the need for each to purchase, own and maintain its own assets. In addition, invariably labour costs are generally the largest part of a municipality’s cost base and the more efficient these services can be applied, the better it is for ratepayers.
Shared service collaboration, when used effectively, may ensure the municipalities remain sustainable and independent over a long period of time. This is the aim of the Greater Shepparton and the Strathbogie Shire Councils.
So the challenge, as ever, remains. In order to survive, in order to remain in control of one’s own responsibilities, those with responsibilities at councils need to keep ahead of the curve.
Shared services present solutions that have the potential to deliver the benefits of efficiencies and economies of scale, without adding a further layer of government.
Greater Shepparton and Strathbogie Shire Councils’ first steps and assertive implementation of their shared services agenda is illustrated in this document.
Purpose and role of the GVRCA
The GVRCA exists to drive reform and lead change to ultimately support sustainable futures in the North Eastern Region of Victoria. Comprised of the Greater Shepparton City Council and the Strathbogie Shire Council, the role of the Alliance is to foster a culture of team work, innovation and best practice and to increase council efficiencies and deliver superior services for the GVCRA communities.
Governance – GVRCA Board and Strategic Alliance Agreement
Collaboration is delivered through leadership and both the Greater Shepparton and Strathbogie Shire Councils have demonstrated this through their commitment to the Board process and the savings and scope of improvement they are driving through this initiative.
The focus during the first 12 months of the alliance was on governance matters and to this end a Statement of Intent and Strategic Alliance Agreement (SAA) were developed.
The Statement of Intent defined the roles, relationships and responsibilities between the member councils and the future mutual objectives between the councils around cost and efficiency, service levels and scope and the management of expectations.
The SAA creates the framework for future projects, defines the relationship between the parties, sanctions the development of a business plan and deals with commercial matters. Matters include issues associated with confidentiality, intellectual property rights, warranties and indemnification.
The SAA also establishes processes for project activities, resources and communication requirements.
The GVRCA is now delivering on its business plan and looks forward to providing savings and/or increased scope of activities to its participant councils.
The development of a rigorous framework for the capture of information to demonstrate savings and efficiencies across the broad range of projects is currently underway.
Efficiencies and Cost Savings
The Goulburn Valley Regional Collaborative Alliance has delivered significant savings for its member councils, the Greater Shepparton City Council and the Strathbogie Shire Council.
In 2014/15 these savings amounted to $1.96 million. A further $2.16 million in savings was projected for 2015/2016 recurrent. Capital one-off savings totalled $0.188 million.
In addition, the region has been funded $0.51 million for a regional bridge program.
The total economic impact since the alliance launched its first project in 2014 is $4.8 million.
One of the key outcomes for the GVRCA
“Identify efficiencies and cost savings within council’s respective organisations through the adoption of one central, best practice system”
Total savings, targeted savings and efficiencies to date $4.82 million.
The GVRCA Board meets on a monthly basis, nominating and approving projects for consideration by the project control group; a joint working group across the councils dedicated to scoping and delivering projects.
Designed to avoid the receipt of unnecessary and costly legal advice, along with the establishment of a new legal briefing and engagement systems for all council officers. This program is designed to place more tightly controlled procedures around how and when the councils obtain advice, along with documented cost savings. A panel of legal providers to be accessed by both councils is being established to ensure that the best available expertise is available to the councils, the law firms are keen to undertake regional council work and that there is a demonstrated commitment to reduce costs. In addition, a legal engagement protocol and a legal library will be established to make access to previous advice received easier to obtain and apply to current matters.
The joint operation to create a bridge management plan will support the greater ease of vehicle access across the councils, and ensure that a consistent level of service is applied to the maintenance and upgrade of these structures. Following the successful implementation of the bridge management plan, it is hoped that a joint federal government grant funding proposal will be available for transport route activity. As part of this project, the councils have now jointly applied to the federal government for grant funding of $520,000 for this regional bridges project.
The councils have implemented joint procurement policies, and common procedures and processes that deliver best practice in procurement.
The members of the GVRCA have agreed to combine their procurement functions to deliver efficiency, where possible, through shared services. This project will conduct a review of the Shepparton and Strathbogie Councils’ procurement systems and delegations, and execute a plan to synchronise the two systems.
The councils have assessed the options for sharing the programs and services that are offered within the human resources and organisational development areas of council. Training and development, policies and procedures and professional care for ill and injured employees are just three of the targeted areas that now enjoy collaborative participation and the sharing of resources. A MAV Workforce Strategy Program Pilot was also undertaken so that both organisations may strengthen the focus and delivery of support and development for councils officers, and that long lasting and satisfying careers continue to be enjoyed within local government in regional areas.
The long term sustainability of all local government councils is in part dependent on the services that are being offered satisfying community requirements and within a budget that is supported by current and future income. Accordingly, the councils have tendered a ‘Service Planning’ program of activity which will enable the councils to sharpen its focus in priority community areas, assess service priorities and identify opportunities for savings and efficiencies. A joint tender for provision of service planning has been established and publicly advertised.
Graders Without Borders
The project aims to establish joint road grading operations in parts of the two council’s road networks. It will give the GVRCA an immediate public presence and provide opportunity for staff of each council to gain an understanding of each others policy and standards, work practices, material, plant and labour arrangements. There is also opportunity for development of cooperative arrangements at works depot level, to identify best practice in grading operation and to revise arrangements to achieve budget savings if possible. It is envisaged that work supervisors will create opportunity for the joint grading of zones within each council area, placing graders across boundaries on a time exchange basis. It may also be possible to pair graders from each council area to maximise exposure and efficiency.
Strathbogie Shire Council CEO, Steve Crawcour
“Both the Shepparton and Strathbogie Councils have demonstrated leadership through their commitment to regional collaboration.”
GVRCA wins Innovation award
A collaboration project between Strathbogie Shire and the City of Greater Shepparton has taken out an award at the prestigious LGPro Awards for Excellence.
The councils won the Innovative Management Initiative category for their Goulburn Valley Regional Collaborative Alliance (GVRCA) project, which was facilitated by CT Management Group.
The GVRCA project has delivered significant savings to date of $4.82 million to the councils and a framework is in place to achieve greater savings.
The councils have collaborated on numerous projects since the GVRCA’s inception in 2012, including Service Planning, joint grader driving and shared policy development.