Speaking at the recent Institute of Public Works Engineering Australia (IPWEA) International Conference in Melbourne, Lloyd Arnott, Advisory Development Leader – Asia Pacific at Aurecon Australia Pty Ltd said that over the next decade for a council to keep pace with ever increasing community demands, it will need to:
- Understand ‘value for money’ and be able to demonstrate this in simple terms to elected
members and its community. This requires a detailed understanding of risk, project scoping,
service planning and contemporary procurement options. It will also reinforce the need to
preplan and precost projects and to quantify environmental and economic benefits
associated with an investment. - Foster regional networks that can be used as a vehicle for service delivery on an
expanded scale. - Gain confidence in working with the private sector and other community stakeholders on a
long term basis to deliver essential infrastructure and services providing value for money.
With extensive experience in Local Government management in both Victoria and New South Wales, in 2000 Lloyd Arnott moved to private sector firm Connell Wagner, which rebranded as the Aurecon Group early this year. Aurecon has some 6,000 staff worldwide, with over 4,000 in the Asia Pacific region.
The following is an abridged version of the paper Lloyd Arnott presented at the IPWEA conference.
With community expectations of Local Government continuing to grow, it is increasingly difficult to deliver services within constrained budgets. This places a real challenge on the industry to balance needs against wants and to prioritise funding programs.
In recent years, the private sector has been more involved in delivering Local Government services, such as waste management, city infrastructure maintenance and even the supply of professional services. This was a significant shift in behaviour, as previously there appeared to be a ‘mistrust’ of the private sector fuelled by the perception that they are motivated by short term gain rather than long term relationships.
Many case studies now prove that this relationship between the private sector and Local Government is working well, providing encouragement to seek further opportunities to engage with private operators.
Perhaps the greatest learning over the past decade has been the acceptance that the accruing maintenance liability is the single most important issue Local Government faces now and for many decades to come.
There will never be sufficient funding available to keep assets in a serviceable state, but the recent Federal initiative through Infrastructure Australia to at least start this ‘claw back’ process is encouraging.
The challenge is to turn words into action, and to make a real difference over the next decade. We cannot underestimate the role that Local Government engineers and initiatives such as NAMS will play in this process.
Over the next ten years Local Government will be asked to enhance its performance in a range of areas including:
- ‘value for money’ service delivery
- community engagement
- aligning skills to meet changing needs
- building partnerships through
collaboration - strengthening a regional approach
- organisational leadership.
With a greater focus on efficiency and effectiveness and finding smarter ways of delivering services, Local Government will be examining all options available to procure infrastructure and services, looking particularly at the impact of risk, the true cost of supporting a local workforce and the options available to ensure a competitive outcome.
Value for money will be a key driver in the future, but this does not necessarily mean lowest cost. Rather it provides a balanced framework that allows critical factors such as cost, quality and timeliness to be considered in the decision making process.
As competition for the available funding becomes tighter, this will require almost all discretionary expenditure to be justified through a business case to ensure that councils are accountable and transparent in their dealings with the community. The challenge for Local Government is to make decisions based on due process acceptable to stakeholders, and with severe funding constraints this will become increasingly more difficult as time progresses.
With the focus on delivering ‘value for money’ services, regions will be forced to come together in the interests of servicing communities better. Benefits will be the sharing of information and costs, with the potential to reduce costs through the bundling of contracts and the standardisation of policy as circumstances allow.
Waste management, infrastructure and roads maintenance, corporate services, fleet management and inspectional services are all examples of services that have been delivered across council boundaries, often at significant cost savings.
Leadership at both an elected member and officer level will need to be taken to another level as pressure increases to meet corporate objectives.
Performance management will be an important factor in strengthening this focus, as will the ability to lead and influence communities and their workforces. Business acumen and supporting business tools to ensure sound decision making will be critical skills for any municipal leader.
To foster an environment that delivers value for money outcomes, it will be important for the political decision making process to be supported by simple but clear cost/benefit analysis.
Many councils have successfully introduced this practice in recent years and this must now flow through to the wider government sector as a statutory requirement.
Over the next decade there will need to be a strong focus on the private and public sectors working together. There have been many instances where collaboration at a local level has led to win win outcomes through expanded skill bases, improved resourcing levels and working in an environment that has fully integrated decision making processes.
The ability of councils to work comfortably in partnerships with the community, with neighbours and with the private sector will determine how successful they will be in servicing needs in the future.
