Trees line a straight road leading off into the distance

Future Proofing Councils: organisational change in Australian local government

By Susan Law

There is always that dichotomous cliché: change is the only constant in the world.  As local authorities, Councils are not only part of the world, but, in the key role in providing civic leadership to our communities, Councils find themselves having to flex and adapt themselves to meet the expectations of their communities and to help them make sense of the changing world.

The drivers to change are many. Some are extrinsic to the Council; others are initiated by the organisation itself.

External Drivers

Demographics

Graph showing a declining predicted budget, eclipsed by increasing adult social care and children services expenditureThe Graph of Doom – a graph prepared by the Council the London Borough of Barnet. The chilling lesson from this graph is that by 2021/22, the Council will need to spend all of its funding and revenue on just providing services for its vulnerable adults and children. Without changes to the manner in which services would be delivered and policy settings, there would be no funding for other services such as waste, community development etc.

While Councils in Australia are not charged with the provision of social services for adults and children, the demographic trends for Australia are similar if not sharper.  This impacts upon state governments and reinforces the drive in NSW, South Australia, and Tasmania for local government sector reform. The ability of state governments to significantly contribute to the funding of local government for services is becoming increasingly constrained. In fact, local government is experiencing the reverse: services being devolved from state to local government without the corresponding level of funding to deliver them.

Similarly, Councils’ rate bases and their ability to raise revenue from ratepayers is coming under increasing pressure. In NSW, rate capping by the State Government is in place and is being debated in South Australia and Tasmania.

Customer and community expectations

At the other end of the demographic spectrum are the expectations of our communities and customers. Most services and the way they are delivered were designed for the post WWII and baby boomer generation – now we have Generation X, Y, and Z, whose expectations are quite different from those of their parents and grandparents. Traditional sectors such as the taxi and hotel industries are having to cope with surviving with disruptive technologies and organisations such as Uber and Airbnb. Nevertheless, these disrupters are setting the expectations for access, service, and response. The disruption in many service sectors is causing major re-thinking of service delivery models, even traditionally conservative ones such as banks. Local government cannot step aside from the change. 

State Government and internal programs of reform

In addition to the UK, in NSW and South Australia, pressure has been placed upon local authorities to not just consider change on an individual basis, but also to participate in a broader program of sector reform.

A collection of old fashioned globes in neutral colours

Whizzing to Oz: Global Collaboration on Local Government Reform

LKS Quaero UK Director Aidan Rave recently visited Australia and met with our Australian team. Here are his reflections on the differences and similarities between the UK and Australian local government contexts – and on the value of a global team when it comes to public service reform.

A seven day round trip from the UK to Australia can have a strange effect on the mind. The combination of jet lag, shifting from summer to winter and around 48 hours stuck in a metal tube has an effect on the most seasoned traveller. Making the trip in late June of this year, in the midst of the political upheaval and chaotic post-Brexit vote atmosphere, added a further dimension to the sense of surrealism.

Of course, attending the annual LKS Quaero hui (a Maori term meaning gathering or assembly) was exciting – an opportunity to meet in person colleagues who had previously existed on the end of a phone or as a slightly fuzzy image on Skype. Okay, the opportunity to sample some of McLaren Vale’s finest was probably a factor, too, but a professional should always be prepared to suffer for the cause!

In many ways, the conversation and debate at the hui confirmed a long-held belief that while the structure and culture of local government in the UK and Australia might differ, there are many challenges and opportunities in common and there is much each can learn from the other’s approach. The political spice on the Australian side was enhanced by the fact that day one of the hui coincided with the general election and all the intrigue, upsets, and twists that inevitably ensue (and there were several). Similarly, giving an update from the UK was inevitably going to be dominated by the fall-out from Brexit, the subsequent resignation of the Prime Minister, and impending implosion of the opposition Labour Party. In truth, it all felt just a little bit embarrassing!

While the “big politics” were certainly never far from the group’s collective thoughts, the focus of discussions remained on issues core to the business on both sides of the equator; namely public service reform, restructuring, amalgamation, culture, and leadership.

The impact of the GFC had a more immediate effect on the UK economy and subsequent public spending plans than was the case in Australia. Consequently, shifts towards structural and political reform of councils in the UK, driven in large part by a seismic reduction of around 35% in real terms spending power over the last five years, has meant that the rate of change in the UK has been determined.

Interestingly, as NSW councils embark on their journey of reform, there is some useful UK insight (not to mention a number of mistakes made and hard lessons learned), within the global LKS Quaero knowledge pool that should prove valuable.  In a similar vein, there is a considerable amount of Australian work on systems thinking and leadership, which will be critically important to UK councils as they attempt the next stage of implementation.

Image of Alan Rushbrook

Council Transition Support Expert Interview: Alan Rushbrook, local government finance expert

LKS Quaero is offering a complete package of Council Transition Support for amalgamating NSW Councils. This is part of a series of interviews in which our transition expert team members pass on some key nuggets of advice.

Alan Rushbrook is a local government financial specialist whose experience goes well beyond financial management as he has sandwiched his financial career with managing community service activities. He brings a strong reputation for leading teams and providing robust policy advice. His varied experience in local government, both in senior management roles and as a consultant, in large city Councils and small rural Councils, has provided him with many skills, particularly in the financial management, corporate support, and community services functional areas. Alan is a Fellow of the Australian Society of CPAs, qualified in Myers Briggs administration and Juran quality management. Here is his advice for CFOs and other leaders of amalgamating Councils.

What opportunities are there for finance teams during an amalgamation?

Amalgamations are the time when finance staff need to shine. It is when our skill sets can provide enormous value to the new organisation.

Why do I say this? It is a time of change. Often inertia and conventional wisdom dominate Council decision making, making change hard: not just difficult to do, but hard to get started. So when there is a changing environment, your first impediment to change is overcome!

It will be a time of immense work, but be sure to take time to think strategically for your Council, your team, and yourself. It can be too easy to get caught up in the focus of moving systems, people, registers, etc, etc. and not raising your vision beyond your desktop. Take time to think beyond the next meeting.

Be clear about what you want to see change, whether it be the strategic financial direction of Council, the structure of your department, or a particular process. The favourite for me in the past has been to challenge some of those areas of waste or inefficiency that have just been accepted or have been protected. Even if many of the players haven’t changed, sometimes they may not be so passionate or committed about their programs or activities as they once were. When things don’t have the usual balance, it might be a good time to get some things changed.

Also, there will be some untied dollars around. Have a think about what you or your team could use that you haven’t been able to get funding for in the past. Set systems up for the future as best you can.

A figure leaps off a mountainous landscape into a bright sky

The CEO of 2025: the Anti CEO?

By Susan Law

As local government internationally is undergoing change (from review to transformation and now reinvention), it’s a good over-a-glass-of-red discussion to speculate on the leadership that will be necessary to take local government organisations through the next 10 years.

Recently, a number of us local government tragics and leaders did just that and managed to capture our thoughts as discussion starters.