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Fit for the Future benchmarks stagnant

The indicators, which measure Clarence Valley Council’s financial position and its financial performance, make comparisons from the inception of the initiative, to 2018 (when CVC was declared ‘fit’), to the current publically available data.

Geoff Helisma

Clarence Valley Council (CVC) has made good progress towards meeting its Fit for the Future benchmarks, however, figures tabled for the 2020/21 September and December quarters are identical.

In July 2018, then minister for local government, Gabrielle Upton, wrote to Clarence Valley Council (CVC) advising that it had “broadly satisfied” its sustainability criteria outlined in IPART’s Fit for the Future assessment, according to the Office of Local Government.

Meanwhile, the 2014/15 Fit for the Future assessment found that CVC satisfied the scale and capacity criterion, however, CVC did “not satisfy the financial criteria overall” and failed the “criterion for sustainability, including the benchmark for the operating performance ratio”.

“It also does not satisfy the criterion for infrastructure and service management but does meet the efficiency criterion,” the report stated.

“We consider a council’s operating performance ratio is a key measure of financial sustainability that all Fit for the Future councils should meet, therefore the council is not fit.”

Come July 2018, despite CVC falling short of meeting four of the benchmarks, Ms Upton wrote to CVC advising that “council satisfied the financial criteria overall as, on balance, it met the financial sustainability criteria”.

She noted that CVC had “implemented a number of strategies to address its sustainability”, including the implementation of the special rates variation.

Ms Upton acknowledged that CVC had “met the criteria for ‘efficiency’ in its original assessment” in 2014/15.

“Council continues to focus on a range of strategies [as submitted in CVC’s Financial Criteria Reassessment] to improve its financial outlook – the strategies proposed to be realistic and sustainable,” she wrote.

While CVC’s February business papers reveal that it is not meeting five of the six Fit for the Future ratios”; overall it has improved its ratios since 2018; but according to the CVC meeting business paper the Own Source Revenue Ratio has dropped from 69.08 per cent to 59.89 per cent – the benchmark target is greater than 60 per cent.

The council’s general manager, Ashley Lindsay, said the Own Source Revenue Ratio “is impacted by an amount of grant funding we receive”.

“Over recent years we’ve received significant grant funding,” Mr Lindsay said.

“That shows why we haven’t met that one … because we’ve got so much money coming from the government.

“And the infrastructure benchmarks, [it is] a long-term objective of council to meet that – we were never going to meet it within four or five years of our financial plan, it was always a 10-year objective for us.”

Mr Lindsay said that the strategies CVC has “implemented over time puts us in a better financial position to meet those benchmarks in the longer term … and the organisation needs to continue to focus on achieving that”.

“The operating performance ratio is the difficult one for us to meet – but the long-term plan is for us to achieve that,” he said.

On why the government declared CVC fit for the future in 2018 prior to meeting the benchmarks and is now, seemingly, less interested in the outcomes, Mr Lindsay said: “From my understanding, [the government] has not dropped … their Fit for the Future objectives, they have not been pushed aside completely, but they’re not as high on their agenda now.

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