Mar. 2020 | MD Message

A message from the Managing Director

Traditionally Local Government operated in a relatively stable environment with councils having significant control over a predictable destiny. In 2020 change is ever-present; increasing governance standards and regulatory requirements, increasing customer centricity and accountability have all reshaped the Local Government sector in the last few years.

The strategic framework and long-term financial sustainability outlook are key objectives of the new Local Government Act 2020.

Local Government has lost capacity and autonomy with respect to revenue raising, principally through the introduction of rate capping and other measures. We believe expenditure management will be the key to the ongoing sustainability of Local Government with many councils facing the need to reduce operating costs.

Understanding the range and levels of service is a key fundamental outcome for 21st century councils. Unless council understands its deliverables, how can it build an efficient, innovative organisation structure to deliver those services?  The challenge will be to target change in a prioritised systematic manner.

Service Planning

Councils spend approximately 75% of their expenditure on services. CT Management Group’s Service Planning methodology is sound and produces an evidence base for council to consider options and opportunities.

Through the service planning approach, we undertake a financial sustainability assessment of council, namely can council sustain its current range of services at the current level over the next ten years. Only then can council begin the discussion around changes in service mix and levels of service.

Through the service planning consultancy, we analyse the breadth, scale, alignment with strategy, type, statutory or otherwise, delivery method, supporting infrastructure, performance measurement, funding and cost of delivery.

We review Asset Management and capital planning. Ultimately, council should only invest in assets that support service delivery at the agreed level of service. This analysis greater reduces renewal investment as it is targeted at the greatest service delivery need.

We visit the revenue side of the long-term financial plan and review council’s rate cap calculations and the capacity and direction around the extent and level of User Charges. While we recognise council’s revenue side is severely constrained with the introduction of rate capping legislation, nevertheless, is Council maximising its revenue?

Community engagement demand increases.

Changing and growing community expectations was and continues to be the major driver behind CT Management Group’s Service Planning methodology – we understand communities and their desire to be better informed and genuinely engaged.

The Local Government Act 2020 places increasing demands on councils to engage the community. Accordingly, councils will need greater detailed information about services, future demand, priority, service levels and the like.

The Local Government Act 2020 extends governance standards and accountability to a new level and extends the long- term planning horizon to a 10-year timeframe for Asset Management financial planning.

How can council undertake meaningful consultation if it doesn’t understand its service priorities, costs and future demand?

How does the community make comparative choices and trade-offs between services if base information is missing?

Once service priorities and the true financial sustainability of council are established, we proceed to the next stage – what is the best and most productive way to structure the organisation to maximise its performance?

We generally address this question in two parts:

  • Undertake a strategic workforce planning assessment with the Council Executive
  • Undertake a detailed Directorate deep dive around structure, strategy, management layers, staffing mix and performance.

CT Management Group has a detailed understanding and extensive network at both State and Federal Local Government levels through the years of service of its senior staff and the connections of its Chairman, the Hon. Jeff Kennett AC.

Look forward to discussing these issues with you in the near future!

Michael Courtney
Managing Director

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