Where do we want to be?
As a result of the work completed in Stage 1 - Review Strategic Direction, council will have a clear picture of the desired future for the community.
Now it is time to refine the broad statements of strategic direction into more specific, measurable outcomes statements, with clear strategies and performance measures.
Many councils find it useful to begin with a project plan that can assist them to set aside the necessary resources and set realistic milestones and targets for development of the corporate plan.
Key steps
Recommended resources
Toolbox | |
Case studies | |
Templates | |
Training resources | |
The training resources Training Kit 3 - Corporate plan - Annual review and Training Kit 4 - Corporate plan - Concepts and directions are recommended to assist councils to introduce, gain support for, and prepare an amended corporate plan.
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Step 2.1 Establish a project plan (optional)
The development of a corporate plan can be considered to be a major project of council. Preparing a corporate plan can be resource intensive in terms of people, processes and budget considerations and can present significant challenges, particularly for a newly elected council and coinciding with local government elections.
Checklist 20 - Prepare a project plan
It makes sense for council to have a project plan to:
- Communicate council and management’s commitment to the strategic management process
- Identify the people who will contribute to each step of the process
- Outline the major steps or tasks
- Set a timetable and sequence of events, milestones and completion targets
- Identify barriers and ways to overcome them, and
- Highlight statutory requirements.
Councils that take this approach report improvements in effective use of resources, decision-making, teamwork and a greater degree of commitment to the corporate plan.
A project plan format is provided in Template 9 - Worksheet - Project plan (
PDF 24 kB).
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Step 2.2 Define the performance assessment framework
Step 2.2.1 Adopt a performance assessment model
A performance assessment system assists a local government to gain a better understanding of how well it is performing and how it can continuously strive to improve its service delivery. No two local governments are identical in terms of their contextual environment, so it is necessary for each council to introduce performance measures and assessment frameworks that work best for them.
Refer to Toolbox 17 - Performance assessment model ( PDF 76 kB) to consider a practical performance assessment model presenting seven dimensions that can be adapted for use by Queensland councils.
Checklist 21 - Review performance frameworks
Using Toolbox 17 as a guide, councils are encouraged to review their existing performance assessment frameworks in terms of:
- How to improve the systems and methods for collecting measurement data
- Meaningful measurement and reporting of corporate plan outcomes for the year
- Seeking feedback on the performance of elected members and council staff and the extent of council’s response to community needs
- Comparing services in terms of value for money
- Analysing and explaning variations from the original plans, and
- Achievement of high standards of governance.
The responses to these questions may lead to a need for council to commit to extensive changes in the way that measurement is used in their monthly, quarterly and annual reviews. For example, as a basis for continuous improvement, to improve decision-making and priority setting, and to report to the community about council achievements.
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Step 2.2.2 Review current performance measures
Checklist 22 - Review performance measures
At this stage, council may find it useful to consider the following:
Questions for policy makers
- Are the performance measures consistent with strategic direction?
- Are the priorities reflected by the performance measures appropriate?
- What is an acceptable level of performance?
- Is a change in policy or resources warranted?
Measures of performance used by Queensland councils usually begin with an outcomes focus based on what council intends to achieve on behalf of the community. These intended achievements are generally expressed through a number of broad outcomes statements (and associated measures) in their corporate plan. The main usage of outcomes statements is to set baselines and targets and establish a basis to determine progress towards achieving them.
By their nature, outcomes are not completely under the control of individual councils, elected members or council officers and are subject to a range of contextual influences. For example, outcomes may be influenced by the behaviours and actions of others, natural disasters, economic considitions, State and Federal government decisions, policies or legislation and a range of other factors outside of council's control.
Although the terminology varies from one council to another, there is some consistency in the way that measures in the corporate plan are linked to measures in the operational plan. For example, Toowoomba and Gold Coast City Councils have similar measurement frameworks as follows:
The first time a measurement is conducted will give council a baseline. After the baseline has been produced, it is used to develop targets for achievement of outcomes for future time periods.
For example, if a measure involved a survey of the community to determine the level of agreement with a hypothetical proposition such as The Shire has a good community environment in which to raise children, the initial survey may indicate a baseline rating of 33%. The review team would then consider what the targets should be for the long term target (20 years), mid-term (4-8 years) and by the end of the next operational plan. This could be expressed as follows:
Baseline 33%
First year target 40%
4 year target 60%
Long term target 80%
Regardless of the terminology used by individual councils, the statements of outcomes need to be written in a format and language that enables them to be translated into tangible measures as illustrated in the following example3:
Outcome:
"A clean and green city with restored waterways, cleaner air and a wide range of open spaces that support increased biodiversity as well as recreation activities".
Key words/terms | Indicator | Measure |
|---|
clean and green city | Waste generation management cleanliness | - Volume of waste produced/yr
- Volume of recovered waste
- Cleanliness index
|
restored waterways | Quality of water bodies | - Water quality monitoring results
- Number of sewerage overflow incidents
|
Quality of sewerage system | - Community rating of stormwater and flood control
|
cleaner air | Air quality | - Air quality monitoring results
- Community rating of smog/air quality days
|
wide range of open spaces that support increased biodiversity as well as recreation opportunities | Land use allocation/zoning for biodiversity and recreation | - Analysis of IPA planning scheme
- Aerial photography and interpretation
- SOE report
|
| Usage of recreational areas | - Community rating of recreation spaces
- Recreation facility usage survey
|
Refer to Case Study 24 - Performance measures - Redland Shire Council ( PDF 137 kB) to consider
how to ensure performance measures used in the operational plan are linked to achievement of the corporate plan programs and objectives (outcomes).
Refer to Case Study 26 - Performance measures - Gold Coast City Council ( PDF 85 kB) for an example of performance assessment and linkages of measures in council’s operational plan with focus areas in the corporate plan.
Refer to Case Study 21- Budget linkages - Toowoomba City Council ( PDF 144 kB) for examples of performance assessment and linkages of measures in council’s operational plan with strategies in the corporate plan.
Refer to Toolbox 16 - Performance measures in local government ( PDF 180 kB) for examples of performance measures commonly used in Queensland councils.
Refer to Toolbox 18 - Defining performance measures ( PDF 67 kB) to consider the range of types of performance measures that can be used by Queensland councils.
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Step 2.3 Assess council performance
A local government must make assessments of its progress towards implementing its corporate and operational plans - LGA s512(1).
Assessment of performance is not merely a response to legislative requirements, it is sound business practice. Councils, like any other business, need to ensure services are delivered in a cost effective way to meet the needs of the community.
An annual review of council's performance can cover the following areas:
Services
Add new services, expand or reduce existing services and discard obsolete services | Operating Projects
Review maintenance standards, commission feasibility studies, consider new, amended or obsolete projects |
Capital projects
Consider types of facilities required by the community and whether the infrastructure is keeping up with trends | Strategic tasks
Investigate new ideas and proposals, develop new policies and plans, align strategies with outcomes |
The annual review provides the opportunity for council to evaluate the results of the previous plan, set new targets for the following year and take steps to remedy any problems. This is also the time to consider ways to improve service delivery and take advantage of new opportunities that may arise.
Checklist 23 - Assess council performance
Before embarking on a review of council’s performance it is useful to consider the following:
What performance measures tell us
- Are we achieving our public purpose as defined in our vision and mission?
- What policy issues do we face?
- What are our priorities?
- How efficient and effective are we?
- What performance improvements are needed?
What performance measures do not tell us
- Why is performance at the level it is?
- What factors impact performance?
- How can performance be improved?
- What level of performance can we afford?
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Step 2.3.1 Review council services
Services are generally measured in terms of efficiency and effectiveness4 and can be defined as:
Efficiency | | describes how well organisations use their resources in producing services. That is, the relationship between the actual and optimum combination of inputs to produce a given set of outputs. |
Effectiveness | | is the degree to which a system achieves its programs and policy objectives. It normally encompasses a number of different, desired aspects of a service linked to program outcomes. |
The report provided by the Industry Commission 1997 includes examples of performance measures used in Queensland councils as listed in the following table:
Service category | Efficiency | Effectiveness |
|---|
Water | - Water operating costs per connection
- Costs of maintaining water pipes per 100 kilometres of main
- Treatment costs per megalitre
| - Pipeline breakages per 100 kilometres of main
- Number of complaints received per 1000 connections
- Water quality compliance
|
Sewerage | - Operating costs per connection
- Costs of maintaining sewerage pipes per 100 kilometres of main
- Treatment costs per megalitre
| - Service complaints per 1000 connections
|
Road maintenance | - Costs per laned kilometre - sealed roads
- Costs per laned kilometre - unsealed roads
| - Percentage of sealed roads resealed
|
Waste management | - Garbage collection costs per property serviced
| - Total garbage collected per property serviced
- Total tonnage of recyclables collected per residential property
- Number of complaints per 1000 properties serviced
|
Library | - Expenditure per capita
- Average cost per registered average borrower
| - Issues per member
- Average number of issues per volume
|
The two most common approaches that Queensland councils use to categorise service delivery are:
By functions: | | where services are categorised according to the areas within council that have specific responsibility for ensuring that they are delivered to meet targets. |
By programs | | where services are aligned with ongoing programs in response to the desired outcomes that council is seeking to achieve on behalf of the community. |
These functions or programs make up a significant portion of the council budget and council sign-off ensures their continuance over the life of the corporate plan. This conveys to the community, the commitment council will make to delivery of ongoing services based on available resources.
Refer to Case Study 23 - Recurring programs - Redland Shire Council ( PDF 307 kB) for an example of a framework of programs used by council to deliver services to the community.
Refer to Case Study 25 - Functional areas - Mirani Shire Council ( PDF 44 kB) for an example of a typical approach by a council to deliver services to the community based largely on functions closely related to their organisational structure.
Checklist 24 - Review council services
Consideration can be given to the following questions:
- How effective and efficient were council’s programs and functions?
- What does the community expect from council in terms of ongoing service delivery?
- Does council need to update the priorities or focus of existing programs or functions?
- What is council’s commitment to recurrent or new programs?
- What would be the impact of not proceeding with all or part of any program?
- What format (programs or functions) should council adopt for its corporate plan?
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Step 2.3.2 Review strategic tasks
Strategies from the corporate plan are implemented through the activities in council's operational plans and available budget. Although the operational plan is required to cover a financial year, many councils prepare their annual operational plans, forecast over a four-year timeframe.
The LGFS 2005 requires that a corporate plan prepared and adopted by a local government must state:
- what council aims to achieve as stated in the corporate plan (outcomes), and
- how the outcomes will be achieved (strategies).
At this stage of the planning cycle, council may seek to improve their responses to community needs by ensuring that the existing outcomes and strategies truly reflect the intentions and capacity of council over the coming period (12 months or a minimum of 4 years depending on the period under review).
Outcomes are the tangible (measurable) expression of the broad strategic direction that council undertakes to deliver on the community's behalf in an agreed timeframe. In the corporate plan, outcomes answer the question What do we want to achieve?
Outcomes statements assist council to have a clear idea about where it wants to be in the future, based on community needs. In terms of the strategic planning process, outcomes statements assist council to be clear about how to get from Where are you now? to Where do you want to be?
Checklist 25 - Review outcomes statements
Consideration can be given to the following questions:
- How well does each outcomes statement reflect council’s intended ongoing service delivery?
- Does council need to update the priorities or focus of the outcomes statements?
- What is council’s commitment to each outcome?
- What format should council adopt to record outcomes in its corporate plan?
- What changes need to be made to the corporate plan in light of this review?
- What new ideas, proposals, policies and plans could council implement?
While outcomes are designed to be achieved over a period of a minimum of four years (the corporate plan), strategies to achieve the outcomes can span one or more 12 month periods. For example, if council has a project covering several years, it can be included as a strategy in the corporate plan and broken down into a series of projects in annual operational plans covering the life of the project.
Refer to Case study 14 - Strategies - Queensland councils ( PDF 177 kB) for examples of strategies and how they are presented in corporate plans to support the achievement of outcomes for Maryborough City Council and Cairns City Council.
Checklist 26 - Review existing strategies
Consideration can be given to the following broad questions:
- What strategies are required to achieve the desired corporate plan outcomes?
- What new or amended strategies would improve achievement of outcomes?
- Does council need to abandon any existing strategies?
- Are the strategies expressed clearly and succinctly?
In keeping with the intention of the LGA that the corporate and operational plans should drive the budget, this review of strategies and activities would ideally form the basis for operational budget determinations. In practice, many councils prepare financial estimates in parallel with preparation of their operational plans using historical records as a guide to future requirements.
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Step 2.3.3 Review operational projects
Checklist 27 - Review operational projects
For each project, it is useful to ask the following questions:
- What progress has been made? If progress is not satisfactory, what changes must be made?
- What is the appropriate timeframe for completion? Is it ongoing?
- How does the timeframe for this particular project relate to the timeframes for others? Are there priorities or particular sequences for implementation?
- What is the fiscal impact of this project? Can it be carried out within existing funding levels?
- Does this project involve a new or expanded service that will require enhanced funding?
- Will the project require capital outlay funding?
- Will the project result in cost savings or reductions in expenditures? If so, how will this be reflected in the budget and cash flows?
- How does this project contribute to maintenance standards?
- Is a feasibility study required before in relation to this project?
- What would be the impact of not proceeding with this project? Is it obsolete?
Along with this analysis, consideration needs to be given to new initiatives, growth areas of activity and the anticipated impact of any changes in levels of service.
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Step 2.3.4 Review capital projects
The primary focus of this review is to consider the types of facilities required by the community and whether the infrastructure is keeping up with trends. Capital projects are typically assessed and scheduled in conjunction with asset owners or responsible managers.
The strategic planning role of councillors places them ultimately responsible for the assets built and replaced. However, there is often little indication of community priorities, whole of life costings or alternative service sourcing being considered in the annual rush to produce the budget and operating statement.
The Local Government Act 1993 (LGA) increased the focus on asset management through the introduction of mandatory accrual accounting and asset valuation.
The financial management framework established under the LGA requires that current ratepayers pay for services that they are receiving and that future ratepayers should not have to pay for what has previously been consumed. In other words, current operating revenue for the year should cover total operating expenses, including depreciation expense. The Auditor-General's report in recent years raised concerns about the high number of Queensland councils without sufficient revenue funding to meet annual depreciation costs.5
Shift in focus
A leading researcher in the area of asset management, Dr Penny Burns6, highlights the challenges faced by asset managers and how they need to move from past practice (how things used to be done) to an improved focus.
This is represented in the following table:
The world of asset management has changed |
|---|
Yesterday | Today |
|---|
- Emphasis on individual assets and short-term
| - Emphasis on asset systems and long-term
- A more holistic approach to asset management
|
- The focus was project based (for example, building a bridge)
| - The focus Is program based (decisions centre on the whole lifecycle of asset collections, for example, transport corridor)
|
- Asset management considered design and construction options
| - Asset management is focussed on design and construct and also focusses on operations and maintenance, renewal and replacement, and eventual disposal as its parameters
|
- Asset management was done in-house
| - More options available including buying services rather than assets, contracting out and integrated facility delivery
|
- Finance was by government borrowing or tax revenue
| - Now there are also Private Public Partnerships or Private Finance Initiative of differing variety and complexity
|
- Approach to asset management was piecemeal and ad hoc
| - Moving toward a holistic and systematic process
- Input and feedback an essential component of the process
|
Councils are encouraged to consider their responses to the challenges raised by Dr Burns as follows:
| | Alternative arrangements for a particular facility |
| | Integrating functional and condition driven requirements, asset classes and sectors and linking appropriate management and decision support systems |
| | Identifying appropriate indicators and setting comparative baselines |
| | Improved data collection and management, constructing and evaluating lifecycle scenarios and system flexibility |
| | Effective communication and reconfiguration of organisational silos |
| | Clarifying objectives and linking activities to outcomes |
| | Activity based costing and commitment budgeting |
| | Valuation and depreciation |
Refer to Toolbox 19 - Asset management intiative - LGAQ ( PDF 78 kB) for information about a program designed to assist local governments, in conjunction with other agencies, to improve their asset management practices, particularly moving from a project based approach to a program focus.
Gosford City Council has developed innovative computer software that saves council managers significant time when setting budgets for capital works projects. The program provides a more transparent funding allocation system and an efficient framework for council managers to assess and rank capital works project submissions for budget-setting purposes.
Source: Article LGNews, June 23, 2005
Refer to website http://www.lgcentre.com.au/lgnews/newsletter.php?issue=2005-06-23&key=457.
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Footnotes
2 The definitions of measures, baseline and target are included in the Gold Coast City Council document Operational and Budget Guidelines 2005-2006.
3 Extract from Fairfield City Council Outcome Indicators Project
4 Source: Industry Commission 1997, Performance Measures for Councils: improving local government performance indicators, AGPS, Melbourne, October. The full text of this report is available on the Industry Commission's website at http://www.pc.gov.au/ic/research/independent/localgov/
5 Source: From the Backroom to the Boardroom, Discussion Paper, September 2004, LGAQ, Brisbane
6 Source: AMQ International, Challenges for Asset Management - Powerpoint presentation, Dr Penny Burns cited in From the backroom to the boardroom, Discussion Paper, September 2004, LGAQ.
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