The NSW Auditor-General’s recent report on service delivery reporting by the state’s Local Governmnet Authorities showed that most of them should be investing in more accurate and comprehensive analysis of how well they are delivering their services.

The report said it is no longer good enough to look only at high level council financial and performance metrics. Why? Because each council also needs to demonstrate a deep understanding of their services in terms of mix, profile, efficiency and effectiveness, because that has a fundamental impact on understanding their overall performance.

I have spent the last nine years as CEO of LG Professionals, NSW. I have worked very hard to sit in the shoes of a council CEOs and General Managers, and think ahead to what essential information councils might need to improve their own performance. Through a deep and enriching collaboration with the sector and PwC we have delivered an exceptional quality resource back to councils to help them with exactly this task.

Councils are some of the most complex, operational and people-centred organisations in Australia. This is because of their broad range of services, and the fact that they are governed by so much disparate regulation.

They clearly operate with significant risks. They need to arm themselves with the best data possible to help them understand the drivers of their organisation’s cost variability and what this means in terms ofresource management, costs and services. How can the best decisions be taken regarding changes to service delivery if there is no strong empirical and contextual view of each council’s cost drivers?

Our open performance analysis tool unpacks service delivery, costs, outputs and workforce profiles with a purpose-built, accessible world class measurement model. Whatever size, shape or resources a council might have – this model works for all.

Sector Driven – Government Free Zone

Our Australasian LG Performance Excellence Program is not a government initiative. Nor should it be. It is a sector-driven initiative providing a deeper understanding of what is unique and similar about councils, compared to other councils. It is safe and enlightening and it has integrity,, ensuring that the maximum insight is generated for each council to enhance their operational decision making, and enhance their strategic planning – especially around services and the workforce.

Since 2015, when we added a significant new service delivery development, councils involved can see how much council services cost and compare these with similar councils. With much more accurate contextual framing, each council can view their own results in context, catering for their own unique situation.

Councils’ financial sustainability has been a significant perpetual discussion nationally (and especially in NSW more recently). Following the more recent stop-start approach to the NSW reform agenda, we are hopeful a more informed, intelligent and committed discussion will be had from now on, one that is driven by councils themselves. All councils need to take the initiative and drive the conversation to a more informed one. There are no excuses.

For five years councils in NSW have had this ability – through our industry program – to fully understand their own relative performance, like nothing ever before. Council leaders can demonstrate they are in control of this, for the betterment of their staff and their communities.

Of course, overall financial results are important and general sustainability is essential, but the risk with the traditional performance measurement blanket ‘ruler’ approach is that it simply describes ‘what’ the results are. It swamps any sort of understanding as to ‘why’. It can also drive completely wrong conversations with no informed discussion.

Time to get sophisticated

Most governments typically like to put councils into reporting categories. But I would argue that there is not one good result or one bad result for any one type of council. Not that you can arbitrarily categorise them  – that is very simplistic. It is much more mature to look at measuring what an expected result might be for a council given their unique elements that impact cost and then monitor improvement and change.

Our program enables councils to more specifically identify similar councils and compare them to each other. This has significant upside, as it creates insight as to what the causal relationships are between their apparent results and their council’s profile. It identifies a much fuller story as to ‘why’ some results appear as they do so that the ‘what’ can be explained.

It is difficult to compare councils who appear similar on the outside – for example, in revenue, size of population and even type (regional, rural or metropolitan) – because they cannot be compared on the cost of service performance without understanding all the things that impact their service cost. Their population profiles and population growth rates may be different, the physical layout and geography of the area along with the associated physical assets they have to manage, might be different, their rate bases with socio-economic levels and industry mixes might be different and finally, their service delivery methods may differ.

Not all councils do the same things or deliver the same services. But even if they are similar they may not do these things in the same way. Service levels can vary and councils can choose either to insource or outsource services

 It is unfair and unreasonable to do a blanket comparison of councils that may have real differences even if they look the same on the outside.. I don’t believe it is productive to box a council in, when our more granular data allows councils to be far more sophisticated in their comparative analysis with the objective of showing improvement.

There are many things that impact a council’s cost structure and overall performance. This needs to be carefully assessed and understood by council, because all stakeholders increasingly expect greater data centred sophistication in all council decision making.

Annalisa Haskell is CEO of Local Government Professionals Australia, NSW, the leading association representing all professionals in NSW local government. It is part of a national federation of associations. Annalisa is developer of the Australasian LG Performance Excellence Program, developed in collaboration with PwC.