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Improving Councils’ Financial Management and Sustainability

August 1, 2022

Many NSW Councils have breathed a sigh of relief as one busy financial year ends and the new one eases in. However, while the busyness may have eased for the moment, the long-term financial picture for many Councils is less than rosy.

This is thanks to Covid-19, a series of natural disasters, and an infrastructure backlog pushing budgets into deficit. The 2021-2022 half-yearly review forecasted the NSW government’s budget deficit would be $3.6 billion. The actual deficit? $11.3 billion. And many Councils are facing the same issues.

Centium has been working with several Council clients in recent months to help them address financial sustainability issues. This work has covered finance and budget training for new Councillors and executive and management staff, support to shape and improve workforce and long-term financial plans, and the preparation of a rating strategy and community engagement required for a Special Rate Variation.

Integrated Resourcing Strategies

With IP&R Resourcing Strategies adopted in June 2022, the ongoing challenge for Councils is an integrated monitoring and review process whereby relevant resource managers can understand and manage the complex issues that are impacting Council finances, assets, and workforce. The six-monthly reporting cycle can facilitate resourcing conversations to better manage current pressures such as disaster recovery, high turnover and other changes in the workforce, ongoing impacts of covid-19, and an unpredictable funding environment. 

New requirements for service reviews can also offer the routine and discipline to find, implement, and communicate better and more efficient ways of delivering Council services. 

Centium has recently been working with our Council clients to embed an integrated approach to their resourcing strategies, requiring managers to work across silos and develop skills and organisational disciplines that ensure ongoing conversations, understanding, and shared solutions to workforce, assets, and financial challenges.

The Option of a Special Rate Variation

In between elections, NSW Councils have a window of opportunity to apply for a Special Rate Variation, and the process that IPART requires in order to gain approval is rigorous and extensive, as shown below:

Councils need to demonstrate to IPART that their own house is in order by identifying productivity improvements and efficiencies, and they need to enlist community support by engendering trust and offering a program of expenditure that matches community priorities. Clear, comprehensive, and strategic asset management systems and processes can offer the community some evidence that Council is ready to collect and spend additional rating income.

Not all Councils have the requisite skills and experience in developing SRVs that address these requirements and therefore need some support to maximise their chances of receiving IPART approval.

Developing the skills to prepare & respond to financial pressure

A difficult fiscal environment requires everyone to understand and respond, and the skills to do this can be developed and enhanced for anyone who manages a budget. We are currently offering a development program for senior and middle managers to develop their financial management capabilities.

The program addresses the following:

  • Understanding the local government context
  • Measuring and assessing Council’s financial position
  • Optimising revenue strategy
  • Exploring options for reducing expenditure
  • Improving Council’s approach to asset management and renewal
  • Planning ahead for financial sustainability

Our Offering

Centium’s depth and breadth of experience in providing performance and improvement support to NSW Councils can deliver real improvements for your organisation. We can help you:

  • Review and update your Resourcing Strategies
  • Examine and support improvements to performance and reporting cycles
  • Consult your community and apply to IPART for a Special Rate Variation
  • Design and implement your approach to service reviews
  • Develop the finance skills and capabilities of senior staff and Councillors

For further information please contact Sarah Artist, Centium’s Manager of Strategy and Engagement on 0409 830 283 or email sarah.artist@centium.com.au

Our Clients