Regional Workshop 22/09/2015 Cairns

1.An introduction to Better Councils Better Communities campaign 2.A performance reporting discussion with participants 3.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 ResearchQueensland Government: Whole of Government Service Delivery Research

QLD Believe: 1 Morning T Queenslanders’ Believe … 63% believe that … local government is an essential layer of government. BUT ONLY … councils deliver value for money 3/10 believe that

Queenslanders’ Believe … … they are satisfied with their council. … councils look for ways to improve productivity and efficiency. 3/10 believe that BUT ONLY 70% believe that

Council People Believe Morning Tea Local 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. 7/10 believe 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 they deliver 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 indicators How performance benchmarking is measured Sources of data Benchmarking groups How councils are grouped for comparisons What is the information telling us Understanding performance benchmarking in Ready. Set. Go.

Key performance indicators GeneralSustainabilityRevenueEfficiencyService level Ready. Set. Go. Features 24 key performance indicators from 5 categories: Population Population density Average age Gross regional product GRP per capita Avg. persons per household Avg. weekly household income Operating Surplus Ratio Net Financial Liabilities Ratio Asset Sustainability Ratio Working Capital Ratio Debt per capita Rating effort Reliance on rates & charges Reliance on contract works Reliance on operational grants Operating Expenditure per capita Employee costs as % of operating expenditure Time lost to accidents per employee Population serviced per employee Asset Consumption Ratio CRC of asset base per capita Urban road length serviced per capita Total road length serviced per capita Parks area serviced per capita Library issues per capita

Key performance indicators Targets and Importance Targets Targets can be either: Best practice as described by the relevant government department A peer group average for perspective A target set by the user Importance The relative importance of a key performance indicator is denoted by the star symbol in Ready. Set. Go.

Key performance indicators 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) QAO DLG Comparative Information ABS AEC GRP Other (e.g. SLQ)

Key performance indicators 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 indicators 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

Key performance indicators Financial sustainability review exercise in Ready. Set. Go.

Key performance indicators Financial sustainability review in Ready. Set. Go. Excerise material Aec to demo other combos or talk Requests from participants

Key performance indicators Financial sustainability review in Ready. Set. Go. Excerise material Aec to demo other combos or talk Requests from participants

Key performance indicators Financial sustainability review in Ready. Set. Go. Excerise material Aec to demo other combos or talk Requests from participants

Key performance indicators Financial sustainability review in Ready. Set. Go. Excerise material Aec to demo other combos or talk Requests from participants

Key performance indicators 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

Key performance indicators 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

Performance Benchmarking 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

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

Performance Benchmarking What is performance benchmarking telling us? Operating Surplus Ratio (prior report) Indigenous and SEQ segments found to be experiencing persistent deficits (on average across each segment)

Performance Benchmarking What is performance benchmarking telling us? Indigenous and SEQ segments found to be experiencing persistent deficits (on average across each segment) Operating Surplus Ratio

Performance Benchmarking What is performance benchmarking telling us? Operating Surplus Ratio

Performance Benchmarking 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

Performance Benchmarking What is performance benchmarking telling us? Coastal and SEQ segments found to be experiencing heightened funding pressures (on average across each segment) Net Financial Liabilities Ratio (prior report)

Performance Benchmarking What is performance benchmarking telling us? Net Financial Liabilities Ratio

Performance Benchmarking What is performance benchmarking telling us? Net Financial Liabilities Ratio

Performance Benchmarking 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

Performance Benchmarking 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

Performance Benchmarking Debt per capita ~ Coastal Councils What is performance benchmarking telling us: Debt per capita

Performance Benchmarking What is performance benchmarking telling us: Debt per capita Coastal (example low)

Performance Benchmarking What is performance benchmarking telling us: Debt per capita Coastal (example low) Coastal (example high)

Performance Benchmarking 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

Performance Benchmarking What is performance benchmarking telling us: Rating Effort Ratio ~ Rural Regional Councils

Performance Benchmarking 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

Performance Benchmarking What is performance benchmarking telling us: Rating Effort Ratio Contribution of employee costs to council operating costs

Performance Benchmarking 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

Performance Benchmarking What is performance benchmarking telling us: Asset Base per capita Asset Base per capita ~ Rural/Remote Councils

Performance Benchmarking What is performance benchmarking telling us: Asset Base per capita 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 indicators 14/15 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 LG Your feedback will help shape this tools future What would you like to benchmark?

Regional Workshop 22/09/2015 Cairns