More local govt scrutiny

Ratepayers 'can keep a closer eye on council finances' under new Govt regulations

19th Mar 14, 11:56am by David Hargreaves

<a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

The Government says ratepayers will be able to "keep a closer eye" on their councils’ financial positions through new set of financial prudence regulations being introduced for local government.

Associate Local Government Minister Peseta Sam Lotu-liga said the regulations would "help showcase best practice and excellence in local authority financial management".

"They will also improve transparency and promote more informed debate about the prudence of local authority financial management."

Local Government New Zealand (LGNZ) welcomed the new regulations.

The regulations were developed in consultation with LGNZ and will measure the financial performance of councils using seven benchmarks on local authority finances. Councils will publish their results against the benchmarks in 2013/14 financial year annual reports. The benchmarks must be adopted by October 31.

LGNZ President Lawrence Yule said councils were responsible to the communities that elected them.

"Clearly outlining their financial performance every year not only strengthens accountability to their communities but also improves transparency.

"Many local authorities are well-structured financially and deliver good value to their communities. We will be looking at ways to ensure communities have a stronger understanding of the financial position of their council and the local government sector in general."

Lotu-liga said the regulations would enable the first systematic analysis of local authority financial management in New Zealand.

"They will provide new insights into local authority financial management, which will help improve decision-making at the local level."

The seven benchmarks address the affordability, sustainability and predictability of local authority finances.

"Local authorities will report against these benchmarks through graphs in their planning and reporting documents. This will mean both the current position of a council and the past and projected trends in its financial management will be more transparent to ratepayers."

LGNZ says it will work with central Government on developing ways of interpreting and publishing the results of the benchmarks and will work with councils on implementing the regulations.

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5 Comments

by waymad | 19th Mar 14, 3:36pm 1395196590

The fact that the LGNZ crew 'welcome' these benchmarks is perhaps a warning: they (the regs, not the TLA staffers and assorted hangers-on, and a quick check on legislation.govt.nz reveals nothing for 2014 which resembles these, yet) might suffer one or more of the following fates:

be so general and aggregated as to be useless (e.g. for a Source and Application of Development Contributions - I've argued here for a decent reporting regime and national comparability....)
be applied patchily, with stressed authorities (Christchurch City, anyone?) exempted for some tom-fool reason while they get their dux in a row
have no sensible or forceful consequences for mis-statement, late statement, or similar finangling, apart from the ever-useful sheaf of wet bus tickets (courtesy of the Wellingtom Trolleys, no less)
have an extended introduction with some TLA's managing to mis-classify almost everything and, quelle surprise, thus skewing or foobarring national comparability in the process
be caught up in the age-old refrain- 'to comply with this latest impost from Central Gubmint, we, the staffers, are gonna need another 15 warm bodies', sung to the tune of Pink Floyd's 'Munny, Munny, Other Peoples' Munny'

by Kumbel | 19th Mar 14, 5:18pm 1395202730

So true. Whatever LGNZ 'welcomes', you can guarantee has no teeth at all (or is completely insane).

And you are not kidding on the final point - remember what happened when we had to compile 'Community Outcomes'?

by Kumbel | 19th Mar 14, 7:31pm 1395210706

Not sure why this lawyer-turned-banker who is a great mate of John Banks thinks these measures will make any difference at all.

I just think back to these fantastic speeches around the Council table when councillor after councillor would get up and thunder away for their allotted time about how terrible some proposal was and would always wind up with " ..and that is why, with great reluctance, I am voting in favour of this spending proposal."

Every time without fail.

by Kumbel | 20th Mar 14, 11:57am 1395269828

It's a sod of a job. Trust me, you don't want it.

I believe public sector managers are generally overpaid because they simply don't have the responsibiltiies their private sector equivalents do.

Having said that, the council CEO has a really shitty job that really comprises two parts:

keeping a lid on all the bitching and in-fighting amongst the staff; and
trying to keep a lid on all the bitching and in-fighting amongst the elected members

I tend to think of them being paid a reasonable salary and scoring a huge amount of danger money on top.

by Kumbel | 20th Mar 14, 12:58pm 1395273488

$250K would be about standard for a territory that size. The CEO is managing an annual budget of $50-70m, has assets under administration of maybe $2b, and manages 150-200 staff. As I say, because they don't have to carry the policy can like the elected members, that salary is probably about 15-20% too high, but add the long hours and the mind-numbing tedium of dealing with the elected members and it probably isn't too far off the mark.

Never, ever heard of a council CEO that played golf every day. That is one job I would apply for.