regional workshop 22/09/2015 cairns. 1.an introduction to better councils better communities...

Regional Workshop

22/09/2015 Cairns

1. An introduction to Better Councils Better Communities campaign 2. A performance reporting discussion with participants3. An introduction to the performance benchmarking tool: Ready. Set.

Go• Understanding the key performance indicators• Reviewing financial sustainability in Ready. Set. Go.• Performing performance assessments in Ready. Set. Go.

4. Benchmarking in Ready. Set. Go.• Benchmarking methodology• Macro benchmarking themes for QLD local governments in

Ready. Set. Go.5. The next steps for Ready. Set. Go.6. Workshop: the future direction of Ready. Set. Go. Participants to

shape what they need in a performance benchmarking tool

Workshop agenda

Better Councils,

Better Communities.

Two Driving Issues:

Money / Financial Sustainability

Community Perceptions & Attitudes

Growing funding gap, currently $800m pa.

Why is there a need for the campaign?

> Queensland Government: Whole of Government Service Delivery Research

http://www.psc.qld.gov.au/assets/Satisfaction_Final_Report_310721013.pdf

QLD Believe: 1Morning TQueenslanders’ Believe …

63%believe that

… local government is an essential layer of government.

BUT ONLY

… councils deliver value for money3/10believe that

Queenslanders’ Believe …

… they are satisfied with their council.

… councils look for ways to improve productivity and efficiency.

3/10believe that

BUT ONLY

70%believe that

Council People BelieveMorning TeaLocal Government People Believe …

… we look to ways to improve productivity and efficiency.

… it is important to be able to compare financial performance with other councils.

7/10believe that

47%believe that

35%believe that

… we deliver value for money.

Five Features of the Campaign:

Benchmarking: 2

Provide comparative data of council performance in a practical, useful and engaging way.

No public release of individual council data until after 2016, and further consultation with Members.

Utilise existing data already in the public realm, no additional administrative burden on councils.

Benchmarking: 3

Because over 70% of councillors and council staff surveyed said they would value this information.

Opportunity for Queensland councils to demonstrate leadership, and maintain control of their own data.

Because less than half of those surveyed believe councils actively look for ways to improve productivity and efficiency and only 35% believe theydeliver value-for-money.

Benchmarking: 3

Benchmarking: 6

It’s impossible to compare my council. We are unique!

Our council shows up as one of the poorest performing in the category. Your data is flawed, wrong, invalid.

Others will use this data against us / me for political gain or to cause embarrassment. This information will be leaked to the media / community.

Other Supporting Services.

Workshop question

How does your council measure and report on performance?

Do you look to other council’s performance?

Have you used the benchmarking tool?

Introduction to performance benchmarking

Key performance indicatorsHow performance benchmarking is measured

Sources of data

Benchmarking groupsHow councils are grouped for comparisons

What is the information telling us

Understanding performance benchmarking in Ready. Set. Go.

Key performance indicators

General Sustainability Revenue Efficiency Service level

Ready. Set. Go. Features 24 key performance indicators from 5 categories:

PopulationPopulation densityAverage ageGross regional productGRP per capitaAvg. persons per householdAvg. weekly householdincome

Operating Surplus RatioNet Financial Liabilities Ratio

Asset Sustainability RatioWorking Capital Ratio

Debt per capita

Rating effortReliance on rates & charges

Reliance on contract worksReliance on operational grants

Operating Expenditure per capitaEmployee costs as % of operating expenditure

Time lost to accidents per employeePopulation serviced per employee

Asset Consumption RatioCRC of asset base per capita

Urban road length serviced per capitaUrban road length serviced per capitaTotal road length serviced per capita

Parks area serviced per capitaLibrary issues per capita


Targets and Importance

TargetsTargets can be either: •Best practice as described by the relevant government department•A peer group average for perspective•A target set by the user

ImportanceThe relative importance of a key performance indicator is

denoted by the star symbol in Ready. Set. Go.


Confidence in data: data sources and quality

Imperative to ensure data is as accurate as possible

Objective: maximise confidence

Published sources:Financial Statements/Annual Reports (consolidated level)QAODLG Comparative InformationABSAEC GRPOther (e.g. SLQ)


Confidence in data: data sources and quality

Data is only as good as its source but has been optimised where possible to default to the most reliable source (e.g. annual reports)

Data for 2014/15 is yet to be published

Asset sustainability ratio prior to 2013/14 is patchy as wasn’t required to be reported

As data is released, Ready. Set. Go. will be updated


Key performance indicator application in Ready. Set. Go.

KPIs

KPI explorer

Trend

Compare

Overview of council key performance indicators by category

Dashboard view of council key performance indicators

Historical comparisons of multiple key performance indicators

Benchmark individual key performance indicators against peers


Financial sustainability review exercise in Ready. Set. Go.


Financial sustainability review in Ready. Set. Go.

Excerise material

Aec to demo other combos or talk Requests from participants


More performance assessments in Ready. Set. Go.

Asset management assessment:

Indicator #1:Replacement cost of assets per capita

Indicator #2:Asset consumption Ratio

Indicator #3:Asset sustainability ratio


More performance assessments in Ready. Set. Go.

Revenue assessment:

Indicator #1:Reliance on Rates and Charges

Indicator #2:Reliance on Operational Grants

Indicator #3:Reliance on Contract and Recoverable Works

Workshop question

Do you look to the performance of similar councils?

Performance Benchmarking

Benchmarking methodology in Ready. Set. Go.

Benchmarking objectives

Provide an interactive assessment of performance (and cost drivers) relative to your peers

Identify and learn from leaders

Question your practices vs best practice


Benchmarking methodology in Ready. Set. Go.

Your council’s benchmarking peer groups

Australian Classification of Local Government

Regional Organisations of Councils and Associations

LGAQ/AEC Financial Sustainability Segments

Population Size


How to access benchmarking functionality in Ready. Set. Go.


What is performance benchmarking telling us?

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Indigenous Rural /Remote

Rural /Regional

Resources Coastal SEQ QLDAVERAGE

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

Operating Surplus Ratio (prior report)

Indigenous and SEQ segments found to be experiencing persistent deficits (on average across each segment)



Indigenous and SEQ segments found to be experiencing persistent deficits (on average across each segment)

Operating Surplus Ratio 2010 - 2011



Operating Surplus Ratio 2013 - 2014


What is performance benchmarking telling us:Operating Surplus Ratio

Difficult to identify actual trends over the past four years

65% of Councils in deficit in 2013/14 (55% in 12/13, 50% in 11/12, 44% in 10/11)

SEQ appears stronger than 4 years ago

Resources, Rural/Remote and Rural/Regional worse off

BUT look beyond the numbers – only 50% FAG payments made during 2013/14 due

to prior year prepayments

Things should normalise from 2014/15



Coastal and SEQ segments found to be experiencing heightened funding pressures (on average across each segment)

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

Indigenous Rural /Remote

Rural /Regional

Resources Coastal SEQ QLDAVERAGE

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

Net Financial LiabilitiesRatio(prior report)



Net Financial Liabilities Ratio2010 - 2011



Net Financial Liabilities Ratio2013 - 2014


What is performance benchmarking telling us:Net Financial Ratio

More consistent trend of relatively high ratios for Coastal and SEQ

A few Rural/Regional Councils popping up to potentially more dangerous levels


What is performance benchmarking telling us:Debt per capita

Provides a good indicator of the level of debt relative to your population base

Comparisons with like councils can be telling


Debt per capita ~ Coastal Councils 2013 - 2014




Coastal (example low)



Coastal (example low)Coastal (example high)


What is performance benchmarking telling us:Rating Effort Ratio

Provides a good indicator of council’s ‘tax take’ from the local economy

Low outcome suggests that councils may not be maximising their own source

revenue

High outcome suggests that councils may be extracting too much income from the

local economy



Rating Effort Ratio ~ Rural Regional Councils


What is performance benchmarking telling us:Contribution of employee costs to council operating costs (excluding depreciation and interest)

Provides an indicator of the contribution of employee costs to total council operating

costs



Contribution of employee costs to council operating costs


What is performance benchmarking telling us:Asset Base per capita

Provides a good indicator of council’s investment in local assets (and renewal

obligations) relative to its population base



Asset Base per capita ~ Rural/Remote Councils 2010 - 2011



Asset Base per capita ~ Rural/Remote Councils 2013 – 2014

Workshop question

[Question about peoples own experiences with these findings]

Next steps for Ready. Set. Go.

Recent

Tranche 2 indicators released

Upcoming

Tranche 3 indicators14/15 data points

Forward estimate/ 10 year plan figures can be added

Workshop question

The future direction of the tool

What indicators would you like to see?

What other functionality could be included in Ready. Set. Go.

Ready. Set. Go. is specifically built for QLD LGYour feedback will help shape this tools future

What would you like to benchmark?

Regional Workshop

22/09/2015 Cairns

regional workshop 22/09/2015 cairns. 1.an introduction to better councils better communities...

Documents

councils performance

financial performance

performance assessments

queensland councils

council measure

council staff

existing data

future direction of