LSI Consultants, productivity specialists who have analysed the performance of 128 NSW Councils based on their own adopted & published Financial Statements, last week issued a damning assessment of Bega Valley Shire Council (BVSC), stating that its performance has declined significantly over the past four years to 2019.
According to LSI, council’s performance is a mark of its failure to contain its expenditure relative to its income & is deteriorating.
The association notes that this deterioration predates the bushfire disaster & Covid19 pandemic & stands in marked contrast to the experience of our neighbours in the Eurobodalla.
LSI has developed a local government
Productivity Index to try to fix the sector’s shortcomings.
In drawing its conclusions, LSI have measured the change in year-on-year productivity of councils, using data published by councils themselves in their annual audited financial statements.
The Productivity Index measures services delivered by each council, relative to the income they receive from rates, user charges, parking fees & other regulatory income.
The Index takes into account labour and other operational costs, including contractors. It allows for the number of dwellings in a council, population, population density and number of full-time staff.
In NSW alone, the Productivity Index estimates there is $341 million a year in savings ($3 billion over 20 years in net present value terms) if councils operate more effectively and efficiently against a top-performing benchmark.
Nationally, a back-of-the-envelope extrapolation puts this at about $1.7 billion a year.
While many NSW councils, including our own, operate inefficiently, mismanaging financial budgets & leaving poor old ratepayers on the hook for ever-increasing taxes, they’re also not subject to sufficient public & media scrutiny & at the end of the day, are unaccountable
That level of incompetence doesn’t come cheap.
The remuneration of the four most senior executives at BVSC, including the general manager, costs ratepayers almost $1M annually, while council’s overall remuneration costs currently account for a third of its annual expenses.
While the BVSRRA has no problem with BVSC paying well-qualified & top-performing executives good money to deliver vital public services such as planning & development, rubbish collection, maintenance, gardening of parks, cleaning, waste management, street signs, soil testing, fixing roads & support services, the reality is that some council executives are little more than bureaucrats who have worked their way up the local government ladder & have minimal experience managing a multi-million dollar business.
Expertise is often lacking in council executives & they are generally not performance-led or measured.
The productivity opportunity lies in financial savings (particularly on labour costs), better asset management, saving on borrowing costs, enhancing investment returns on surplus cash, operational improvements and increasing workforce skills.
The association believes that unless strong action is taken to hold council management & the elected council accountable for their performance, rates will keep rising at more than double the inflation rate, just as they have over the past decade, with residential council rates currently averaging about $1050 in NSW, significantly less than the Bega Valley.
John Richardson
Secretary/Treasurer
Bega Valley Shire Residents & Ratepayers Association
Tel: 0264945669
Email: secretary@begavalleyshireratepayers.asn.au
Website: http://www.begavalleyshireratepayers.asn.au