Asset Management and Local Government Reform
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- Alyson Stanley
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1 Asset Management and Local Government Reform Challenges and Opportunities Greg Hoffman PSM Director Policy and Representation LGAQ 1
2 Today I will touch on: Overview Local Government Reform where are we at? The capacity of this version of reform (aka amalgamations) to address systemic issues, particularly asset management. Where do we go from here on asset management in LG? 2
3 The events of April 17 State Government announced the end of the SSS process and establishment of Local Government Reform Commission. There was NO consultation with LG. What do they mean by LG reform? Tight timeframes to implement changes. 3
4 Since the announcement LGAQ is focused on supporting members through this tumultuous period. New website: Local Democracy Local Choices Help Desk State Transition Committee Support and advice But this version of reform will not solve some systemic problems 4
5 Amalgamations and Asset Mgmt Combining councils will not address the significant issues around asset management in LG. Reform threatens to stall our efforts to improve AM practices in LG the LGAQ will not let that happen. Work will still need to be done to improve processes and change the culture. This has been reinforced by LG Asset, QTC and the QAO. 5
6 What we know about the state of AM in LG? Incomplete and /or lack of good quality data AM seen as Engineering not whole of organisation Limited AM Policy - no clear principles for decisions Lack of available resources operational activities priority Variation in the number and type of AM systems spreadsheets to software systems Lack of integration between financial and asset information 6
7 What we know about the state of AM in LG? No functional definition of asset purpose and limited understanding of Levels of Service Significant variations in level of support / commitment from CEOs and Councillors Lack of uniformity between Government funding bodies in terms of reporting requirements Lack of rigour in evaluating grant long term implications Beware fairy godmother offering $$$ 7
8 What we know about the state of AM in LG? This has been confirmed by recent QTC and QAO reports: For example QAO Report Number 1, 2007 states: Based on the audit findings, I am not convinced that all councils can effectively achieve a whole-of-asset life and strategic management approach to significant property, plant and equipment items. 8
9 Moving forward on Asset Management Amalgamations will not make the changes required to address these systemic problems. FB2B, LG Asset and the Roads Alliance programs are as important as ever to make the change. What are these programs? FB2B is a high level partnership with key stakeholders which aims to: Change the culture within Queensland Councils in relation to asset management Change the focus of responsibility for the asset management task from solely technical to a strategic, financial and operational, whole-of-organisation model Improve asset management practices across Local Government in Queensland 9
10 LG Asset: LG Asset Two-year mentoring program modelled on the successful STEP framework. Lift the profile and provide focus on Asset Management involving Councillors & CEOs Assist development of AM capacity by: improving awareness of asset management improving asset management capability Set minimum process standards for asset management scorecard 10
11 LG Asset Program Outputs 1. At end of program Council will have documented, adopted and implemented the following: An AM policy / purpose statement (templates) An AM Practices Improvement Strategy (templates) AM Plans for their most important assets (templates/tools) A Financial Plan to support asset management 2. Better managed assets within resources available. 3. Service delivery meets Community s expectations 11
12 LG Asset Program Status 75 Councils Joined as of April 2007 Four visits over two years of program 67 first visits completed 36 second visits completed 8 Regional Meetings conducted 12
13 LG Asset Outcomes to date Where CEO actively supporting program it is happening Councillors becoming involved = adding value to process Good acceptance of definitions & funding paradigm LG Asset templates making it simpler and assist Regular LG Asset visits help to maintain momentum Additional training required for Asset Management Plan development Consistent approach to determination of Levels of Service Need for greater emphasis on Regional Problem Solving 13
14 The Roads Alliance AM has been a key component of the Roads Alliance partnership since inception in 2002 with a particular focus on: Data collection on the LRRS System application within councils State-wide aggregation through the Hub. Renewed emphasis and expanded support for AM about to commence 14
15 Where to from here? FB2B and LG Asset We will continue to support cultural change around AM through the FB2B and LG Asset programs. We will need to be flexible in delivering these programs to ensure they meet both the immediate and long-term needs of our members We will resolve the debate over asset valuation and depreciation, noting the QAO report 15
16 Where to from here? Local Government Reform and AM Change does present opportunities such as: Review of the LG Act New players and a fresh start building a new LG culture in regard to AM 16
17 Questions? 17
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