Productivity Commission praises Victoria's local government reporting model

The Productivity Commission has recommended that State and Territory governments should follow Victoria's lead in requiring “more meaningful” performance reporting from local governments.

As part of its first Productivity Review, the Commission examined the role of local governments and ways of making them more effective. It found that “The Victorian Government’s reporting framework could be used as a model or starting point for other States and Territories.”

The Victorian government’s Local Government performance reporting framework requires councils to report indicators across four categories: service performance, financial performance, sustainable capacity and governance and management.

The indicators are provided on the ‘Know Your Council’ website, which allows the public to see detailed profiles of individual councils.

Council profiles include information on the geographic and population attributes of the council area, finances, and performance results for the four categories.

Websites provide opportunity for the council to explain or comment on their results. The public can also compare performance of similar councils. Victorian councils are divided into five categories: metropolitan, interface, regional city, large shire and small shire.

The Commission concluded that the more effective use of performance measurement would:

  • improve the accountability of Local Governments to residents and taxpayers

  • identify best-practice methods in Local Governments for future policy development

  • provide an incentive for Local Governments to improve their performance by highlighting differences in performance between similar Local Governments.

The Review considered the increasing scope of local government activities, the effectiveness of amalgamations and the capping of rates as a constraint on revenue raising capacity of local governments.

The review is available here.

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