Since rate capping was first introduced in 2016/17, South Gippsland Shire Council has adapted its budget and Long-Term Financial Plan (LTFP) to accommodate efficiencies necessary to meet rate capping requirements whilst maintaining services delivered and ensuring Council’s financial sustainability.
All of Victoria’s 79 councils have been operating under rate caps since 1 July 2016. Prior to the introduction of rate capping, councils were unconstrained in the setting of rate increases. In 2015/16, the year before rate capping, Council’s rate increase was 4.90% but the average rate over the previous 10 years was around 7%.

Rate capping totals from 2016/17 to 2019/20 are 9.25% and Council over this period has “charged” only 9%. A “saving” of 0.25% over the 4-year period.

Industry aims for efficiency savings of 1% per year so Council should have achieved at a minimum, a 4% reduction and not the 0.25% it claims to have achieved. The dismissed Councillors were about to implement a further 2.5% reduction in 2019 Budget and had a policy in place to reduce the rate burden over 10 years but were removed from office one week before the vote. The Administrators then removed that proposal and all references to reducing the rate burden over a 10-year period. It is no longer Council policy to reduce the rate burden so finding efficiencies towards such a target is not a concern of the decision makers now.

The efficiency claims made is this report are as follows:

• Enabled Maintenance and Operations teams to receive and handle customer requests in the field through an automated integration of systems, streamlined processes and improved collaboration. This: – Reduced an average of 300 unactioned requests to 30 within three weeks – Reduced paper usage by 80%, or 4,000 pages a month – Reduction in customer call backs
• Physical scanning/indexing of 2000 boxes of paper records into Council’s documentation management system, enabling the closure of Council’s storage facility, reducing costs, and improving time to retrieve information when required. 
• Implemented fire notice improvements by using the ‘geo’ location services to enable mobile updates and processing, greatly improving efficiency and inspection times for staff. 

• Investigated options for the provision of Home and Community Care Services, with Council identifying a suitable external provider and exiting the service at the end of March 2019 
• Captured and mapped over 271 processes within Council, leading to optimisation opportunities and updated service outcomes. For example, driving improvements to rates processes to reduce processing times (circa 2,000 hours) and transaction costs ($98K per annum), enabling the team to advance projects in relation to provision of eNotices (increased take-up from 3% to 17%) and streamlining of payment options. 

• Introduction of a published Public Facing Map Portal to assist with the location of services, activities and aid the public consultation process 
• Local Laws project to improve community interactions through increased customer service and education, rather than enforcement.

It is important to realise that all these “efficiency” savings were saving time or resources and could be turned into reduced costs to the community by way of a rate reduction or put back into increased service delivery. Council chose to put all these efficiency measures back into further service delivery. 

Why this report was delayed by 9 months is not explained by these few minimal measures which should be have been known by staff when the 2018/19 report was produced and of course, this report failed to mention the withdrawal from the Shared Services Program which would have achieved 7% reductions to expenditure over the next few years. Whilst the initial Council Plan reference has been achieved in part by  “identifying efficiency measures that Council has achieved since the introduction of the Victorian Rate Capping System”,  the lack of direction towards making real and meaningful efficiency savings such as would have been achieved by the Shared Services Program is a disappointment and leaves the impression of just ticking boxes rather than implementing the spirit of the Council Plan Initiative.